Reuters News

[Samirofi]

NEW YORK, Oct 30 (Reuters) - U.S. Treasuries prices held earlier gains on Wednesday after data showed domestic consumer prices grew moderately in September, in line with analysts' expectations, reinforcing the notion inflation remains tame.

The government's consumer price index rose 0.2 percent last month, bringing its year-over-year increase to 1.2 percent, the smallest since April. ID:nLLAULE9EW

Benchmark 10-year Treasury notes US10YT=RR last traded 2/32 higher at 2.500 percent, down 0.7 basis point from late on Tuesday.

The September CPI figures did not alter investors' inflation outlook as measured by the breakeven rates on Treasury Inflation Protected Securities were little changed from their earlier levels.

The 10-year TIPS breakeven rate, or the yield differential between 10-year Treasury notes and the 10-year TIPS, stood at 2.16 percent, unchanged from the level before the CPI data and more than 1 basis point lower than late on Tuesday.

(Reporting by Richard Leong Editing by W Simon)

[RAYAN PCM]

The European Union has launched a case against Brazil at the World Trade Organisation over import taxes – covering everything from cars to computers.

Brussels believes the import tariffs are unfair and break global trade rules.

Brazil imposes a 30 percent tax on imported motor vehicles as it seeks to build up a local car industry.

Carmakers are offered tax breaks if they invest there, which has prompted European companies – including BMW, Volkswagen and Jaguar Land Rover – to build plants in Brazil.

A German lawmaker in the European Parliament, Daniel Caspary, says EU car exports to Brazil fell by more than 11 percent this year partly because of the taxes.

Brazil insisted it is “complying with international trade rules”.

The 30 percent import levies which also apply to goods ranging from computers to smartphones and semiconductors, have also angered Japan, the United States and other big trading nations, which could join the dispute.

Brussels stressed the dispute should have no bearing on delicate free-trade talks with Mercosur, which brings together Brazil, Argentina, Uruguay, Paraguay and Venezuela.

Brazil would be a major beneficiary of that far-reaching trade accord, but without a deal, it will lose its favourable access to the European Union next year because it is no longer considered a poor developing nation but an upper-middle income one.

After 10 rounds of talks and several meetings in Geneva, home to the WTO, the two sides have failed to resolve the long-running row over the import taxes.

“The protection of Brazil’s domestic industry comes at the expense of Europe’s imported goods and that is unacceptable,” said an EU official close to the discussions. “We have had many bilateral meetings but Brazil has taken no concrete steps.”

[RAYAN PCM]

The European Union has launched a case against Brazil at the World Trade Organisation over import taxes – covering everything from cars to computers.

Brussels believes the import tariffs are unfair and break global trade rules.

Brazil imposes a 30 percent tax on imported motor vehicles as it seeks to build up a local car industry.

Carmakers are offered tax breaks if they invest there, which has prompted European companies – including BMW, Volkswagen and Jaguar Land Rover – to build plants in Brazil.

A German lawmaker in the European Parliament, Daniel Caspary, says EU car exports to Brazil fell by more than 11 percent this year partly because of the taxes.

Brazil insisted it is “complying with international trade rules”.

The 30 percent import levies which also apply to goods ranging from computers to smartphones and semiconductors, have also angered Japan, the United States and other big trading nations, which could join the dispute.

Brussels stressed the dispute should have no bearing on delicate free-trade talks with Mercosur, which brings together Brazil, Argentina, Uruguay, Paraguay and Venezuela.

Brazil would be a major beneficiary of that far-reaching trade accord, but without a deal, it will lose its favourable access to the European Union next year because it is no longer considered a poor developing nation but an upper-middle income one.

After 10 rounds of talks and several meetings in Geneva, home to the WTO, the two sides have failed to resolve the long-running row over the import taxes.

“The protection of Brazil’s domestic industry comes at the expense of Europe’s imported goods and that is unacceptable,” said an EU official close to the discussions. “We have had many bilateral meetings but Brazil has taken no concrete steps.”

[RAYAN PCM]

Greek jobs situation improving but still grim



The jobless rate in Greece fell in the third quarter of this year.

However at 27 percent of the workforce, it remained the highest in the eurozone.

It was 27.1 percent in the previous three-month period.

Down from a record level of 27.4 percent in the early part of 2013.

Joblessness in Greece’s austerity ravaged economy is a major headache for the coalition government there.

Unemployment has more than tripled since 2008, the start of the protracted recession which has wiped out about a quarter of Greece’s gross domestic product.

[RAYAN PCM]

Irish economic growth continues to quicken



It was building too many houses that got Ireland into an economic mess and needing a bailout, but the latest figures show a buoyant construction sector was behind strong growth in the economy between July and September.

Gross domestic product expanded by 1.5 percent quarter-on-quarter putting the country on a sounder-than-expected footing as it emerges from an international bailout.

The Central Statistics Office also revised up the second quarter’s growth to 1.0 percent from the previous estimate of 0.4 percent.

That means the economy has expanded for two successive quarters after struggling for the previous 18 months.

Compared to a year earlier GDP rose 1.7 percent.

The jobless rate is down to 12.5 percent of the workforce from last year’s peak of 15.1 percent and consumer spending bounced back from a sharp contraction earlier in the year.

“This certainly suggests that there is a good bit of momentum in the economy and that the consumer is slowly coming back,” said Conall Mac Coille, chief economist at Davy Stockbrokers.

“Construction spending is up 15 percent on the year which is an extraordinarily large rate of expansion.”

Ireland recently became the first euro zone member to successfully complete a European Union/International Monetary Fund bailout programme.

It now requires growth to take hold if it is to meet a target of cutting its high debt pile by a quarter by the end of the decade.

However, Ireland’s trade-dependent economy continued to feel the effects of the downturn in Europe, with exports down by 0.8 percent quarter-on-quarter.

[RAYAN PCM]

European shares rally as Fed sugar-coats stimulus tapering



European shares have rallied in response to the Federal Reserve sugar-coating its decision to start winding down its crisis-era stimulus measures.

So as not to spook the markets, the US central bank policymakers pledged to keep interest rates at record low levels even longer than previously signalled.

This all ends months of agonising by investors over when this would happen.

Trader Robert Halver in Frankfurt said: “So we finally know what the Fed is going to do, which means investors don’t have to worry any more. We are now dealing with facts rather than speculation. The tapering is coming in small doses. It is dovish [rather than hawkish] tapering. Buying 10 billion dollars less of bonds each month, it’s not really that bad.”

Market reaction was that this was a modest step the US economy could well withstand.

The word from Washington pushed Wall Street to a record high closing on Wednesday.

Shares in Tokyo and some other parts of Asia also posted big gains.

The dollar was up against other currencies, but not significantly.

The Fed move follows last week’s smoother-than-expected US budget agreement which should ensure there is no repeat of this year’s unsettling government shutdown.

[RAYAN PCM]

French and German finance ministers defend bank plan against criticisms



Just hours after the European Union agreed a plan for winding down and closing failing banks, the finance ministers of France and Germany had to offer reassurances that it would be sufficient.

The president of the European Parliament Martin Schulz has described it as possibly the biggest policy failure since the euro crisis erupted four years ago, but Germany’s Wolfgang Schaeuble was upbeat.

He said: “All the European banks, as we’ve been repeatedly reassured by the European Central Bank, are now much better capitalised than before. Now, we have clear bail-in rules – [with investors contributing ahead of governments] – and I think that what we are building up here is the right contribution to further stabilising financial markets.”

Schaeuble appeared at a joint news conference in Paris with his French counterpart. He was asked if the backstop that had been agreed was sufficient to assure savers and markets. Schaeuble replied: “We have reached a result which is convincing.”

French Finance Minister Pierre Moscovici said the deal would yield a credible joint backstop after a long transition period.

In the negotiations Germany blocked the hopes of France, Spain and Italy, that eurozone money would be used directly for bank clean-ups.

Still Sarah Hewin, Head of Research as Standard Chartered, said it was an achievement to get anything agreed: “Looking back, a month or so ago it seemed unlikely that they would be able to reach an agreement before the end of the year. Clearly it’s a compromise between what Germany wanted and what the European Central Bank and European Commission wanted. But overall I think we’re in a positive place here.”

But the criticisms from Schulz and others in the European Parliament include that the plan is very cumbersome and does not address the situation of weak governments being left to cope with banks, whose problems can buckle a country’s finances – as happened in Ireland and Spain.

[Samirofi]

* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 up 0.2 pct
* Ingenico jumps on talks to buy GlobalCollect
* ECB expected to keep rates at record lows
* U.S. payrolls seen up 212,000, 5th month above 200,000

By Blaise Robinson PARIS, July 3 (Reuters) - European stocks crept higher on Thursday, adding to the week's gains, as investors waited to see U.S. payrolls figures and the outcome of a European Central Bank policy meeting. Shares in French IT systems group Ingenico INGC.PA jumped 6.8 percent after it said it was in talks to buy GlobalCollect, an Amsterdam-based provider of online-payment services, for an enterprise value of 820 million euros ($1.12 billion).

ID:nL6N0PD4IX The pan-European FTSEurofirst 300 .FTEU3 index was up by 0.3 percent at 1,389.34 points by the middle of the trading day, putting it close to the 6 1/2-year high of 1,399.62 points it reached in late June. The euro zone's blue-chip Euro STOXX 50 .

STOXX50E index also rose 0.4 percent to 3,265.20 points. Many traders were looking for details of the ECB's new stimulus measures from the central bank's meeting on Thursday.

ID:nL6N0PD2J1 The 24-member Governing Council is unlikely to take fresh policy action after reducing interest rates to record lows last month

- with the deposit rate cut to below zero
- and revealing a 400 billion-euro ($545.62 billion) loan programme.

Many investors have said they expect further gains for European stock markets later this year, as the ECB's measures help offset lingering signs of weakness within the euro zone's economic bloc.

"I don't see any catalyst to have a negative view on equities," said Luc Bocahut, portfolio manager at Monaco-based Tiverton Trading. U.S. DATA Traders were also waiting for U.S. non-farm payrolls employment data due at 1230 GMT.

According to a Reuters poll of economists, payrolls probably increased by 212,000 in June, marking the fifth consecutive month of job gains above 200,000. T

hat would bolster views that the U.S. economic recovery is gaining momentum.

ID:nL2N0PB1YI On Wednesday, the ADP National Employment Report, considered a pointer to the payrolls report, showed U.S. companies hired 281,000 workers in June. The increase was the biggest monthly gain since November 2012 and well above expectations.

ID:nZON227J00 "It's wait-and-see this morning. The payrolls should be relatively strong, which would help eclipse the recent dismal quarterly growth figure," said Lionel Jardin, head of institutional sales at Paris-based Assya Capital.

[Samirofi]

Lending to euro zone private sector shrinks again Oct - ECB

FRANKFURT (Reuters) - Lending to euro zone households and firms contracted further in October, keeping up pressure on the European Central Bank to deliver further stimulus measures to buoy the lacklustre 18-country economy.
Euro zone banks, especially in crisis-stricken countries, have tightened their purse strings in response to tougher capital requirements and a health check of the sector, while companies have held off investments, unsure of the future.
ECB figures released on Thursday showed that in October, loans to the private sector contracted by 1.1 percent from the same month a year earlier, after a contraction of 1.2 percent in September.
"The latest money supply and bank lending data are of little comfort to the ECB and hardly eases pressure for further action," said Howard Archer, economist at IHS Global Insight.
The ECB has started offering banks cheap, four-year loans and has begun buying covered bonds and asset-backed securities to ease the burden on banks' balance sheets and entice them to lend. But these measures will take time to gain traction.
To stimulate the economy further, the ECB has suggested it may expand its stimulus early next year.
A survey released last week showed euro zone business growth had been weaker than any forecaster expected this month and new orders had fallen for the first time in more than a year despite further price-cutting.
A day after the release of the weak Purchasing Managers' survey, ECB President Mario Draghi opened the door last Friday to more drastic policy measures to prevent the euro zone from sliding into deflation.
Euro zone inflation is running at 0.4 percent - far below the ECB's target of just under 2 percent. On Wednesday, ECB Vice President Vitor Constancio said inflation "threatens to continue on the low side for some time to come."
Going beyond Draghi's remarks, Constancio also said the ECB could decide as early as the first quarter of next year whether to begin buying sovereign bonds - so-called quantitative easing.

[Samirofi]

Markets slump on gloomy growth outlook

(Reuters) - Financial and commodities markets slumped on Wednesday after the World Bank cut its growth forecasts for 2015 and 2016, fuelling fears that the benefits of cheaper oil may be offset by anemic economies and the threat of deflation.
Share prices, commodities and bond yields fell as investors sought safety in government debt and currencies like the Japanese yen. The dollar dropped 1 percent against the yen.
Market nerves were soothed somewhat after a top adviser to the European Union's highest court advised judges to approve a bond-buying plan by the European Central Bank aimed at boosting the struggling euro-zone economy.

The perceived removal of a potential legal roadblock helped push the euro below its 1999 launch rate against the dollar for the first time in more than nine years.
But investor caution was rampant. The pan-European FTSEurofirst 300 equity index was down 1.2 percent at 1307 GMT, with key national bourses in negative territory, and German Bund yields fell close to a record low of 0.4 percent.
U.S. equity futures were down 0.6 percent after JPMorgan Chase & Co reported a drop in quarterly profit as legal costs exceeded $1 billion. 10-year T-note yields hit their lowest since May 2013.
Oil and metals prices also extended their slide. Copper traded at its lowest in more than half a decade amid a broader commodities rout that dragged mining stocks Antofagasta, Glencore and Anglo American down 5.7 to 11.9 percent.
"These growth fears are keeping markets busy, and it is linked with the deflation question," said Christian Gattiker, chief strategist and head of research at Bank Julius Baer. "We do have the stress in financial market because it's about the solvency and liquidity of oil producers."
Weak oil prices pushed explorer Premier Oil to say on Wednesday it expected to book a $300 million impairment charge on some of its assets for 2014 due to weak oil prices.
Emerging-market equities underperformed as the Russian rouble fell 1.5 percent against the dollar. Russian stocks extended their losses on the back of the commodities sell-off and a flare-up of violence in eastern Ukraine.
Russia's finance minister warned of a more than $45 billion drop in revenues this year if the average oil price was $50 a barrel.
In Asia-Pacific, Australia's main index fell 1.0 percent, with mining shares taking an added blow.
Seeking to support growth, Japanese Prime Minister Shinzo Abe's cabinet approved a record $812 billion budget while cutting new borrowing for a third straight year.

The share market seemed under whelmed, however, and the Nikkei .N225 lost 1.7 percent.