Хронология из DJN Market Talk

By Wes Goodman

 

Nov. 18 (Bloomberg) -- Treasuries were little changed following two days of gains before a government report that economists said will show U.S. producer prices fell the most on record.

Five-year yields were at the lowest level in eight months as the growing risk of a global recession and falling commodity prices curbed inflation forecasts. Treasury Secretary Henry Paulson, speaking in Washington yesterday, said some credit markets are still ``clogged'' and work needs to be done to boost the economy.

``I recommend buying,'' said Kazuaki Oh'e, a debt salesman in Tokyo at CIBC World Markets Japan Inc., part of the investment division at Canada's fifth-biggest bank. ``We have a recession in Japan, Germany and of course the U.S. The fear of inflation is fading.''

Benchmark two-year notes yielded 1.19 percent as of 10:10 a.m. in Tokyo, according to BGCantor Market Data. The 1.5 percent security maturing in October 2010 traded at a price of 100 19/32. Five-year notes yielded 2.27 percent. The rate was as low as 2.26 percent, a level not seen since March 18.

 

To contact the reporter on this story:

Wes Goodman in Singapore at wgoodman@bloomberg.net.

 

 

By Mark Shenk

 

Nov. 18 (Bloomberg) -- Crude oil was steady near $55 a barrel after Japan entered its first recession since 2001 and China's largest oil producer said demand dropped ``sharply.''

Oil closed at a 21-month low yesterday after the economy in Japan, the world's third-biggest oil-consuming country, contracted 0.4 percent in the third quarter. China National Petroleum Corp. said demand has fallen since September because of credit-market turmoil.

``The overwhelming trend is that global demand is down sharply, led by the drop in the U.S.,'' said Antoine Halff, head of energy research at Newedge USA LLC in New York. ``It's now becoming clear that the Chinese economy is being hit harder than expected by what is happening in the U.S. I don't think we've fully factored in the slowdown in China.''

Pump prices have followed futures lower. Regular gasoline, averaged nationwide, declined 1.8 cents to $2.087 a gallon, AAA, the nation's largest motorist organization, said on its Web site yesterday. It's the lowest retail price since March 2005. Gasoline pump prices have dropped 49 percent from the record $4.114 a gallon reached on July 17.

Pirate Attack

Prices rose earlier because of colder U.S. weather and the hijacking of a Saudi Arabian tanker. Temperatures on the East Coast will be below normal from Nov. 22 to Nov. 26, according to the National Weather Service. A supertanker was hijacked by Somali pirates off the coast of Kenya, the U.S. Navy said.

The Saudi-operated Sirius Star was more than 450 nautical miles southeast of Mombasa when a group of pirates scaled the 10-meter (32-foot) side of the ship, U.S. Navy Lieutenant Nate Christensen said in a phone interview from Bahrain, where the Fifth Fleet is based. The tanker is designed to carry more than 2 million barrels of crude oil.

``The reaction to the Saudi tanker story is indicative of the change in sentiment,'' said Kyle Cooper, an analyst at IAF Advisors in Houston. ``If this story hit six months or a year ago, we would be up $5 or $6.''

Chinese Imports

Chinese diesel imports dropped to 80,000 metric tons in October, the lowest in 14 months, and gasoline purchases declined to 31,533 tons from 122,850 tons in September, figures from the Customs General Administration of China show yesterday. China's overseas fuel purchases have fallen from July's record when the country raised stockpiles before the summer Olympics Games.

Manufacturing in New York contracted in November at the fastest pace on record as orders and sales plunged. The Federal Reserve Bank of New York's general economic index fell to minus 25.4, the lowest since records began in 2001, from minus 24.6 percent in October, the bank said yesterday.

Leaders from the Group of 20 urged a ``broader policy response'' to the financial crisis at a weekend meeting in Washington, citing the potential for additional interest-rate cuts and fiscal stimulus.

``Nothing concrete came out of the G-20 meeting, which increases pressure on all asset classes,'' said John Kilduff, senior vice president of risk management at MF Global Inc. in New York. ``China is raising alarm bells about an economic slowdown. This is the last shoe to drop as far as demand is concerned.''

OPEC Forecast

The Organization of Petroleum Exporting Countries reduced its forecast for average oil consumption next year by 530,000 barrels a day, or 0.6 percent, to 86.68 million barrels a day, according to its monthly oil market report. The International Energy Agency and U.S. Energy Department slashed demand projections last week.

Brent crude oil for January settlement declined $1.93, or 3.6 percent, to settle at $52.31 a barrel on London's ICE Futures Europe exchange.

 

To contact the reporter on this story:

Mark Shenk in New York at mshenk1@bloomberg.net.

 

 

By Stanley White and Ron Harui

 

Nov. 18 (Bloomberg) -- The yen gained against the euro for a third day as the prospect of a global recession prompted investors to sell higher-yielding assets and pay back low-cost loans in Japan's currency.

Japan's currency also strengthened against the Brazilian real as Asian stocks followed Wall Street lower. The Australian and New Zealand dollars declined on concern recessions in the U.S., Europe and Japan will crimp demand for the commodities exported by the South Pacific nations.

``We're not likely to see any good economic news for some time,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``Stocks and commodities show we're in a recession. In this environment the yen is likely to gain.''

The yen was at 121.74 per euro as of 9:37 a.m. in Tokyo from 121.99 late yesterday in New York. It was quoted at 96.44 versus the dollar from 96.43. The euro slid to $1.2616 from $1.2650. The pound was quoted at $1.4946 from $1.4989.

The yen may rise to 121 per euro and 95.50 against the dollar today, Ishikawa said.

Japan's currency rose to 42.3042 per Brazilian real from 42.4243. In carry trades, investors get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's benchmark rate of 0.3 percent is the lowest among major economies.

Yen Benefit

``The yen continues to benefit from risk aversion,'' wrote currency strategists led by Zurich-based Mansoor Mohi-uddin at UBS AG, the world's second-largest foreign-exchange trader, in a research report yesterday. ``Our core view remains that the low- yielding safe haven currencies will stay supported as the central banks of higher-yielding currencies are forced to cut interest rates further.''

UBS forecasts the yen may strengthen to 90 against the dollar and 108 versus the euro in one month.

The Federal Reserve Bank of New York said yesterday its general economic index fell this month to minus 25.4, the lowest level since records began in 2001. Readings below zero signal New York State manufacturing shrank. The MSCI Asia Pacific index of regional shares fell 1 percent after U.S. stocks tumbled yesterday, extending a two-week decline.

Japan's economy entered a recession in the third quarter as corporate spending and export demand slumped, data showed yesterday. The 15 countries that share the euro are also in a recession, a report showed last week.

Weaker Pound

The pound depreciated to $1.4557 on Nov. 13, the lowest level since June 2002, and 86.63 pence per euro, the weakest since the 15-nation currency's 1999 debut, as the U.K. economy fell into a recession.

Sterling will drop early next year to $1.28 per dollar, the lowest since 1985, as U.K. banks shrink foreign borrowings and the country's policy makers favor a weaker currency, wrote Paul Meggyesi, a foreign-exchange strategist at JPMorgan & Chase Co., in a research note Nov. 14. Sterling will weaken to a record 92 pence per euro, he wrote.

The yen has advanced 14 percent versus the dollar, 33 percent against the euro and 53 percent against the Australian dollar in the past three months on slumping global economies.

Gains in the yen may erode Japanese exporters' earnings by eroding the local-currency value of their overseas sales. The yen's 16 percent appreciation against the dollar this year contributed to companies including Toyota Motor Corp. slashing profit forecasts and cutting investment.

Toyota, which makes more than three-quarters of its sales abroad, forecast profit will fall this fiscal year by almost 70 percent. The automaker will fire 3,000 workers by March, and the Nikkei newspaper reported this month that it will delay adding capacity at a domestic plant that makes Lexus sedans.

 

To contact the reporters on this story:

Stanley White in Tokyo at swhite28@bloomberg.net

Ron Harui in Singapore at rharui@bloomberg.net

 

 

2008.11.18 02:01:13   This Is Dow Jones In New York

2008.11.18 03:36:42   Nymex Crude Won't Stray Far From Support –Charts

2008.11.18 03:36:20   UPDATE: Paulson Says Recovery Process Will Take Longer

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2008.11.18 03:29:36   Japan's Envoy To US Supports Dollar As Main Reserve Currency

2008.11.18 03:27:30   Most Analysts Expect New Zealand Ctrl Bk To Cut 100 BP Dec-Poll

2008.11.18 03:24:22   MARKET TALK: S&P/ASX 200 Down 1.1%; Margin Calls, DRP Selling

2008.11.18 03:22:06   Hillary Clinton To Accept US Sec of State Offer -UK Newspaper     

2008.11.18 03:17:46   USD/CNY Central Parity 6.8280 Vs Monday Parity 6.8303

2008.11.18 03:16:40   Singapore Min: FY08 Budget Deficit Possibly Above S$2.4B

2008.11.18 03:14:12   2-Yr JGB Yield Hits 8-Mo. Low

2008.11.18 03:13:06   One Sees RBNZ Cutting 150Bp In Dec, Balance Tip 75Bp Cut –Poll

2008.11.18 03:10:19   Japan Yosano: Economy May Contract In FY08, FY09 –Kyodo

2008.11.18 03:00:36   Wall St Focus Turns To Econ, Auto Sector – BBH

2008.11.18 03:00:19   Holiday Advisory: Brazil Markets To Close Thur For Holiday

2008.11.18 02:56:17   US Issues Travel Warning For Eritrea, Somalia

 

 

 

 

 

 

2008.11.18 02:49:11   USD/JPY Tad Higher, Players Lack Trading Cues

2008.11.18 02:46:43   US House Dem Leaders, Bernanke, Paulson Discuss Foreclosures

2008.11.18 02:42:42   Russia To Cut Oil Export Duties By About One Third – FT

2008.11.18 02:26:28   Nikkei Dn 1.5%; 8218 First Support Lvl-Analyst

2008.11.18 02:29:32   Goldman CEO: We Can't Separate Ourselves From Outside World

2008.11.18 02:34:18   Australian Dollar Down 20 Pts At US$0.6464 After RBA Minutes

2008.11.18 02:22:44   Japan Investors Keeping Foreign Holdings – UBS

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2008.11.18 02:11:28   Nikkei 225 Stock Average Down More Than 2%

2008.11.18 02:01:32   Nikkei 225 Stock Average Opens Down 1.3% At 8415.60   

2008.11.18 02:01:28   Lead 10-Yr JGB Futures Open Up At 138.67 Vs 138.56 Mon

2008.11.18 02:01:16   UK Rents Drop As Owners Turn To Letting On Lack Of Sales-RICS

 

 

By Simon Packard

 

Nov. 18 (Bloomberg) -- Rents for U.K. homes fell for the first time in five-and-a-half years as the worst housing slump since the 1990s caused a record increase in properties put on the rental market, the Royal Institution of Chartered Surveyors said.

Real estate brokers reporting that rents on their properties fell outnumbered those who said they rose by 12 points in the three months ended Oct. 31. Those reporting an increase in the number of rental listings was 56 percentage points higher than those reporting a drop, according to the survey released today by the London-based professional organization.

U.K. home prices fell an annual 14.6 percent in October, the biggest decline since the 1991 recession, according to mortgage- lender Nationwide Building Society. The 12-month slide and the seizure of the mortgage market deterred buyers, forcing them into rental accommodation. More homeowners became landlords because they didn't want to sell at distressed prices, RICS said.

``There seems to be an oversupply of rental properties and a lack of confidence from prospective tenants,'' said Beverley Morgan, managing director of the brokerage that bears his name in Cwmbran, Wales. The Welsh market registered one of the two biggest pick-ups in new landlord instructions across the U.K., according to the RICS survey.

``In some cases, landlords are prepared to take less than the asking price,'' to rent their property, Morgan said. His comments accompanied the RICS survey release, which reported that the falls in rents across the country were ``quite modest'' and less than the fall in property values.

Buy-to-Let

Lower rental income may also hurt investors who took advantage of low borrowing costs and rising home prices to buy rental properties. These private landlords, who mostly financed their investments with ``buy-to-let'' mortgages, own more than 1 million rental homes across the U.K.

Standard & Poor's Ratings Services said yesterday that it expects an increase in arrears, defaults and repossessions for landlords who relied on these mortgages to buy their rental properties in 2006 or later.

``Newer buy-to-let mortgages are now underperforming, given looser underwriting standards and lower absolute growth in rental coverage since origination,'' said Kate Livesey, a surveillance credit analyst at Standard & Poor's.

The ratings company said 3.7 percent of a group of 200,000 buy-to-let mortgages were in arrears at the end of June. In a separate sample 2.9 percent of owner-occupied homes were in arrears.

 

To contact the reporter on this story:

Simon Packard in London at packard@bloomberg.net

 

 

2008.11.18 02:02:48   Paulson Sees Stress In Financial Markets For Number Of Mos

2008.11.18 02:01:22   Ex-Tsy Secy Summers: Wants Speedy, Sustained Stimulus

2008.11.18 01:57:33   Ex-Tsy Secy Rubin: Large Stimulus Package Will Happen      

2008.11.18 01:45:38   Lead Nikkei Futures Open Down 100 Points At 8350 On SGX

2008.11.18 01:38:39   US Tsy Yields May Back Up In Asia – Trader

2008.11.18 01:19:11   Nikkei May Fall; 8148 Support-Strategist

2008.11.18 01:00:04   USD/JPY May Fall Due To Concerns Over US Econ

2008.11.18 01:03:02   Spot Gold Quiet, Futures Open Interest Low

2008.11.18 00:50:53   Treasurys Rise On Econ Concerns; 10-Yr Outperforms

2008.11.18 00:34:04   US Treasury To Limit Dividends For Pvt Banks Seeking Capital

 

 

By Timothy R. Homan and Shobhana Chandra

 

Nov. 17 (Bloomberg) -- Industrial production rebounded in October after refinery shutdowns from Gulf Coast hurricanes caused the biggest drop since 1946 the month before.

The 1.3 percent gain wasn't enough to make up for the 3.7 percent September plunge, and output shrank by 0.7 percent in each of the past two months after excluding the effect of the hurricanes and a Boeing Co. strike, the Federal Reserve said. The New York Fed said its factory index fell to a record low.

``The trend is clearly very, very weak,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``Export demand is falling apart, and domestic demand has already fallen apart. We'll stay in a recession at least until the early part of 2010.''

The choking off of credit to businesses is forcing companies to cut back on investments, while the downturn in consumer spending has eroded demand for everything from cars to computers and furniture. The rising danger of a global recession and a collapse in commodity prices has endangered the overseas sales of U.S. exporters such as Caterpillar Inc. and Deere & Co.

A record export boom kept U.S. manufacturers busy until economies abroad began contracting. Japanese government figures today showed the country sinking into its first recession since 2001. The 15-nation euro region's gross domestic product has also shrunk the past two quarters.

 

Stocks, Treasuries

The Standard & Poor's 500 Stock Index fell 2.6 percent to close at 850.75. Yields on benchmark 10-year Treasury notes fell to 3.66 percent at 4:17 p.m. in New York from 3.73 percent at last week's close.

The U.S. has entered a recession that will persist into next year, and economies around the world will follow suit, according to a survey of business economists released today. After growing 1.4 percent this year, the U.S. will contract 0.2 percent in 2009, according to the median estimate in a poll taken by the National Association for Business Economics.

A majority of respondents said the U.K., euro area, Japan, Canada and Mexico are either now, or will soon be, in a recession.

U.S. industrial production was forecast to rise 0.2 percent after a previously reported 2.8 percent drop in September, according to the median estimate of 64 economists surveyed by Bloomberg News.

 

``Manufacturing is contracting and is contracting very sharply,'' said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. ``There's almost nothing you can say that's good. There was an export cushion previously, and that is disappearing.''

Capacity utilization, which measures actual production as a share of the maximum potential, increased to 76.4 percent from 75.5 percent the prior month.

The New York Fed's general economic index fell to minus 25.4, the lowest since records began in 2001, from minus 24.6 percent in October. Readings below zero for the so-called Empire State index signal manufacturing is shrinking.

Factory output, which accounts for about four-fifths of industrial production, increased 0.6 percent, led by a rebound in petroleum and chemical products that reflected the resumption of operations from the storms.

Utility production increased 0.4 percent after rising 2.4 percent. Mining output, which includes oil drilling, jumped 6.1 percent after falling 8.5 percent in September.

Industrial capacity utilization was estimated to increase to 76.5 percent from 76.4 percent, according to the Bloomberg survey median.

 

Plunge in Autos

Motor vehicle and parts production dropped 3.5 percent following a 1.3 percent increase the prior month, the report said. Factories assembled just 8.09 million motor vehicles at an annual pace last month, the fewest since 1991.

Production of consumer durable goods, including automobiles, furniture and electronics, fell 2.1 percent.

Auto industry figures earlier this month showed cars and light trucks sold at a 10.6 million annual pace in October, the lowest since April 1991. President-elect Barack Obama is pushing Congress to approve as much as $50 billion this year for cash-starved U.S. automakers.

Industrial production in October also was weakened by a now-resolved 8-week strike by approximately 27,000 machinists at Boeing, the world's second-largest commercial planemaker.

Other reports indicate a bleak outlook for manufacturing. The Institute for Supply Management's factory index for October dropped at the fastest pace in 26 years, the Tempe, Arizona- based group said Nov. 3.

Slowing demand in the U.S. and abroad is causing some companies to trim their payrolls. U.S. Steel Corp., the largest U.S.-based steelmaker by 2007 sales, will cut 500 American jobs amid a ``dramatic downturn'' in the economy, John Armstrong, a spokesman, said in a telephone interview Nov. 13.

 

To contact the reporter on this story:

Timothy R. Homan in Washington at thoman1@bloomberg.net