U.S. equity markets are trading slightly better at the mid-session, but seem to be lacking a catalyst to drive it sharply higher. An easing of investor risk sentiment helped to support equity prices overnight, but the lack of follow-through to the upside, helped limit early gains. Traders are hoping for more concrete evidence that a resolution has been reached regarding the deficit situation in the Euro Region.
Appetite for risk is likely to rise once the situation in Greece stabilizes and the Euro begins to rally. Optimism that a viable solution could be reached to assure investors that Greece would adhere to its budget, should help to drive investor confidence up. It looks as if today will be choppy until investors decide whether to embrace risk or repel it.
March Treasury Bonds are trading lower at the mid-session. The overnight and midday weakness is being triggered by a combination of falling demand for lower risk assets and the new supply of debt which is ready to come to the market courtesy of the U.S. Treasury. Overnight support held this morning at a 50% level at 118’24. A failure to hold this level is likely to trigger an acceleration to the downside.
The weaker Dollar is helping to buoy April Gold following a strong overnight rally. Some traders also believe that the gold market overreacted to the downside last week. A combination of oversold conditions and a successful test of a retracement level at $1049.60 could help to give Gold a boost into the close. Furthermore, growing deficits in most major economies is renewing talk of a major developing inflationary situation. Some gold investors believe that central banks will be forced to print money to cover their deficits. This will weaken paper money, making hard assets more valuable.
The weaker Dollar and increased demand for higher risk is helping to drive up March Crude Oil at the mid-session. The supply and demand situation remains bleak so this market will be more sensitive to currency movement. Look for a surge to the upside if the Dollar trades lower into the close.
The U.S. Dollar is trading lower at the mid-session as tensions eased regarding the fiscal problems in Greece. Some traders feel that a resolution will be reached which may involve aid or stronger assurances that Greece will strictly follow its newly proposed budget.
The March Euro experienced a choppy two-sided trade early in the session. Continue to look for volatility, highlighted by a choppy trade until the European Central Bank, European Union or International Monetary Fund offers a viable solution to the Euro Region’s fiscal problems.
Volatility and choppiness is affecting the British Pound at the mid-session. Besides the weak economy, investors are now having to deal with the possibility that the U.K. will suffer the same fate as Portugal, Spain and Greece and have its debt rating reduced because of its huge budget deficit. Furthermore, news that the June election could result in neither party receiving a majority is also hurting the British Pound.
The March Japanese Yen is little changed at the mid-session, but this trading pattern could shift quickly if risk aversion returns to the markets. Budget problems in Europe, the U.K. and the United States may encourage traders to seek the safety of the lower yielding Asian currencies. The Japanese Yen is taking its clues from the stock market today.
The direction of the March Swiss Franc is being determined by the movement in the Euro. A weaker Euro will increase the chances of a Swiss Bank intervention, thereby strengthening the Dollar versus the Swiss Franc. A short-covering rally in the Euro will help underpin the Swiss Franc.
Stronger gold and crude oil should be helping to underpin the March Canadian Dollar, but it looks as if the choppy equity markets are exerting a larger influence on this currency. Look for the Canadian Dollar to remain buoyed as long as it is getting support from the commodity complex. A bullish turnaround in the stock market will help strengthen the Canadian Dollar late in the session. Some traders feel that dovish comments from Bank of Canada deputy governor Duguay are helping to limit gains. He reiterated that interest rates will hold steady until at least the end of the second quarter. Furthermore, he emphasized a weaker Canadian Dollar scenario is necessary to keep the economic recovery on course.
Tuesday, February 9, 2010
India GDP Growth May Rise To 7.2% In 2009-10: Govt
(RTTNews) - India's economy is likely to grow 7.2% in the 2009-10 fiscal year, advance estimates of the Central Statistical Organization showed on Monday. The economy had expanded 6.7% in 2008-09.
For the fiscal year ending on March 31, the financing, insurance, real estate & business services sector is forecast to show the biggest growth of 9.9%, slightly less than the 10.1% logged in the previous year.
Manufacturing, one of the key sectors driving GDP growth, is expected to grow a robust 8.9%, much greater than the 3.2% recorded for the previous fiscal.
Mining and quarrying, utilities as well as trade, hotels, transport and communication are expected to show more than 8% growth each in 2009-10. However, construction sector is forecast to show only 6.5% expansion compared to 5.9% in the previous year. Further, farm output is expected to shrink 0.2% in 2009-10 after growing 1.6% in the previous year.
For the fiscal year ending on March 31, the financing, insurance, real estate & business services sector is forecast to show the biggest growth of 9.9%, slightly less than the 10.1% logged in the previous year.
Manufacturing, one of the key sectors driving GDP growth, is expected to grow a robust 8.9%, much greater than the 3.2% recorded for the previous fiscal.
Mining and quarrying, utilities as well as trade, hotels, transport and communication are expected to show more than 8% growth each in 2009-10. However, construction sector is forecast to show only 6.5% expansion compared to 5.9% in the previous year. Further, farm output is expected to shrink 0.2% in 2009-10 after growing 1.6% in the previous year.
Sri Lankan President's Challenger General Fonseka Arrested, Reports Say
General Sarath Fonseka, who lost to president Mahinda Rajapaksa in the presidential election, was arrested at his office in Colombo on Monday night, reports quoting witnesses said.
Gen Fonseka was meeting a number of politicians who had supported his candidacy, when he was taken into custody in a "very disgraceful manner," witnesses said.
Reports say the arrest was not unexpected, as government was mulling a court martial against Fonseka on charges of plotting to overthrow the administration.
Rajapaksa defeated his main challenger and former army commander General Sarath Fonseka in the elction held last month. Fonseka rejected the outcome alleging vote-rigging and lodged several objections with the electoral commission.
Within a week of his re-election, Rajapaksa dismissed 12 senior military officers for being a "threat to national security" and hatching "political conspiracy" during the presidential elections.
Gen Fonseka was meeting a number of politicians who had supported his candidacy, when he was taken into custody in a "very disgraceful manner," witnesses said.
Reports say the arrest was not unexpected, as government was mulling a court martial against Fonseka on charges of plotting to overthrow the administration.
Rajapaksa defeated his main challenger and former army commander General Sarath Fonseka in the elction held last month. Fonseka rejected the outcome alleging vote-rigging and lodged several objections with the electoral commission.
Within a week of his re-election, Rajapaksa dismissed 12 senior military officers for being a "threat to national security" and hatching "political conspiracy" during the presidential elections.
Euro Weakens As Negative Bets Hit Record Highs
NEW YORK (Dow Jones)--Lingering concerns about the fiscal health of weaker nations in the euro zone kept the common currency near an eight-month low against the dollar Monday.
Pressure on the common currency showed no signs of letting up after data indicated that bets against the euro in the futures markets reached record highs. A meeting of finance ministers of the Group of Seven leading economies in Canada over the weekend did little to shift the negative sentiment on the euro.
Data from the Commodity Futures Trading Commission indicate a record amount of bets against the euro--called shorts--among speculators using futures contracts, said Camilla Sutton, currency strategist at Scotia Capital in New York.
Speculative bets against the euro are now at a higher level than at the peak of the financial crisis in 2008, she said, at $7.6 billion as of last Tuesday, the most recent day the weekly data were compiled.
Because the euro has slipped further since then in daily trading, bets in futures markets against the euro have likely increased, Sutton said.
"The data just really reflect how negative sentiment has turned" against the euro, Sutton said. "Very quickly, we've not only gone from" bets in favor but "to record bets against the euro."
The euro will remain under significant pressure until euro-zone officials detail to markets how they will deal with weaker member states. Until then, uncertainty will reign, Sutton said, keeping the euro depressed.
Late afternoon Monday in New York, the euro was at $1.3659 from $1.3663 late Friday, according to EBS via CQG. The dollar was at Y89.30 from Y89.38, while the euro was at Y121.97 from Y122.14. The U.K. pound was at $1.5598 from $1.5613. The dollar was at CHF1.0722 from CHF1.0729.
The Dollar Index, which tracks the U.S. currency against a trade-weighted basket of currencies, was 80.350 from 80.323.
As a result, Deutsche Bank's PowerShares US Dollar Index Bearish (UDN) exchange-traded fund was up 0.04% from late Friday, while its PowerShares US Dollar Index Bullish (UUP) was down 0.04%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of ICE's Dollar Index.
To see the euro's moves against the dollar, please see chart at:
http://www.dowjoneswebservices.com/chart/view/3407
In the absence of major economic data, currencies traded within hair-thin ranges and the underlying malaise in the euro zone was still the overriding factor driving currencies Monday.
"The sentiment is still bearish for the euro and positive for the dollar," said Carol Hurley, senior market strategist at brokerage firm Lind-Waldock in Chicago. "The comments from the G-7 put some stabilization into the markets...but lacked substance as far as a formal plan to fix some of these debt issues, so the market is still searching for safety.
A statement from euro-zone members of the G-7 finance ministers--that they would "continue to monitor" Greece's implementation of a belt-tightening plan--didn't ease investor worry over sovereign debt, analysts said.
"Debt concerns in the euro zone seem set to persist and [to] undermine the euro," said Steve Barrow, head of G10 strategy at Standard Bank in London.
The G-7 finance ministers from the leading industrialized economies disappointed hopes of a new initiative for resolving the problem of large budget deficits in peripheral euro-zone countries.
Instead, nothing new was said on the matter. European officials once again suggested that a bailout isn't on the European Union's agenda.
"The seriousness of the European crisis is certainly graver than the Dubai World crisis," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn. "To an extent, this panic has become embedded in the markets' expectations. What remains to be seen is how the Greek public deals with [the country's budget-deficit plan]."
Some unions in Greece have threatened to protest budget-cutting plans. Meanwhile, a measure passed in Portugal on Friday to extend the spending powers of its regional governments unnerved markets.
Investors also cast nervous eyes to sterling, which had been under earlier pressure before rebounding along with the euro in late-morning trading because of fiscal issues in the U.K., including high deficits and the possibility of political gridlock if upcoming elections result in a hung Parliament, as recent polls suggest is increasingly possible.
A hung Parliament, in which one party doesn't have a clear majority, could mean that the slim budgets that are necessary to cut U.K. deficits will have a hard time getting passed, said Altaz Dagha, currency strategist at Lloyds TSB in London.
The Bank of England's announcement last week that it wouldn't extend its bond-buying program, known as quantitative easing, but would leave the door open to future purchases, would continue to weigh on sterling, analysts said.
Pressure on the common currency showed no signs of letting up after data indicated that bets against the euro in the futures markets reached record highs. A meeting of finance ministers of the Group of Seven leading economies in Canada over the weekend did little to shift the negative sentiment on the euro.
Data from the Commodity Futures Trading Commission indicate a record amount of bets against the euro--called shorts--among speculators using futures contracts, said Camilla Sutton, currency strategist at Scotia Capital in New York.
Speculative bets against the euro are now at a higher level than at the peak of the financial crisis in 2008, she said, at $7.6 billion as of last Tuesday, the most recent day the weekly data were compiled.
Because the euro has slipped further since then in daily trading, bets in futures markets against the euro have likely increased, Sutton said.
"The data just really reflect how negative sentiment has turned" against the euro, Sutton said. "Very quickly, we've not only gone from" bets in favor but "to record bets against the euro."
The euro will remain under significant pressure until euro-zone officials detail to markets how they will deal with weaker member states. Until then, uncertainty will reign, Sutton said, keeping the euro depressed.
Late afternoon Monday in New York, the euro was at $1.3659 from $1.3663 late Friday, according to EBS via CQG. The dollar was at Y89.30 from Y89.38, while the euro was at Y121.97 from Y122.14. The U.K. pound was at $1.5598 from $1.5613. The dollar was at CHF1.0722 from CHF1.0729.
The Dollar Index, which tracks the U.S. currency against a trade-weighted basket of currencies, was 80.350 from 80.323.
As a result, Deutsche Bank's PowerShares US Dollar Index Bearish (UDN) exchange-traded fund was up 0.04% from late Friday, while its PowerShares US Dollar Index Bullish (UUP) was down 0.04%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of ICE's Dollar Index.
To see the euro's moves against the dollar, please see chart at:
http://www.dowjoneswebservices.com/chart/view/3407
In the absence of major economic data, currencies traded within hair-thin ranges and the underlying malaise in the euro zone was still the overriding factor driving currencies Monday.
"The sentiment is still bearish for the euro and positive for the dollar," said Carol Hurley, senior market strategist at brokerage firm Lind-Waldock in Chicago. "The comments from the G-7 put some stabilization into the markets...but lacked substance as far as a formal plan to fix some of these debt issues, so the market is still searching for safety.
A statement from euro-zone members of the G-7 finance ministers--that they would "continue to monitor" Greece's implementation of a belt-tightening plan--didn't ease investor worry over sovereign debt, analysts said.
"Debt concerns in the euro zone seem set to persist and [to] undermine the euro," said Steve Barrow, head of G10 strategy at Standard Bank in London.
The G-7 finance ministers from the leading industrialized economies disappointed hopes of a new initiative for resolving the problem of large budget deficits in peripheral euro-zone countries.
Instead, nothing new was said on the matter. European officials once again suggested that a bailout isn't on the European Union's agenda.
"The seriousness of the European crisis is certainly graver than the Dubai World crisis," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn. "To an extent, this panic has become embedded in the markets' expectations. What remains to be seen is how the Greek public deals with [the country's budget-deficit plan]."
Some unions in Greece have threatened to protest budget-cutting plans. Meanwhile, a measure passed in Portugal on Friday to extend the spending powers of its regional governments unnerved markets.
Investors also cast nervous eyes to sterling, which had been under earlier pressure before rebounding along with the euro in late-morning trading because of fiscal issues in the U.K., including high deficits and the possibility of political gridlock if upcoming elections result in a hung Parliament, as recent polls suggest is increasingly possible.
A hung Parliament, in which one party doesn't have a clear majority, could mean that the slim budgets that are necessary to cut U.K. deficits will have a hard time getting passed, said Altaz Dagha, currency strategist at Lloyds TSB in London.
The Bank of England's announcement last week that it wouldn't extend its bond-buying program, known as quantitative easing, but would leave the door open to future purchases, would continue to weigh on sterling, analysts said.
Value-added gemstones to fetch huge forex
PESHAWAR: NWFP Governor Owais Ahmed Ghani has said that vast potential existed for earning foreign exchange through exploration of precious stones on scientific lines and ensuring their value addition, which require institutionalised initiatives on fast-track basis.
Speaking at diploma awarding ceremony of the graduates of Gemology Training Course at the Governor’s House, Monday, he said: “We need to establish a centre of excellence in this sector under the aegis of the University of Engineering & Technology and develop skilled manpower.”
The six-month course, which was fourth of its nature, was meant for students from Fata and was arranged by the NWFP University of Engineering & Technology through the sponsorship of USAID. All 15 graduates from Fata were awarded diplomas on the occasion.
The governor, who is also the Chancellor of the NWFP University of Engineering & Technology, said attracting
international buyers was a sensitive matter and to attain recognition there was a dire need to establish a gems certification and evaluation laboratory in the provincial metropolitan.
Owais Ghani also lauded the USAID for sponsoring the training saying that it would go a long way towards generating job opportunities for youth and encouraging export of value-added precious stones instead of rough material.
“We need to move from practices of exporting precious stones in rough forms to an internationally recognised level of quality material,” he said.
In fact, he said, huge deposits of different kinds of minerals exist in the NWFP and Fata and we also need support and sponsorship for their development and exploitation. He appreciated the enthusiastic approach of the NWFP University of Engineering & Technology for promoting skilled manpower and assured every possible help and support in its efforts for further up-grading the educational facilities.
Vice Chancellor of the university Syed Imtiaz Hussain Gilani said the university had been promoting knowledge in the gemstones sector for quite some time and three batches of the series had already passed out.
Sheheryar Khan, director, Fata Development and Livelihood Development Project, highlighted importance of the course and said that community participation was the focal point of the programme.
Later, the governor awarded certificates to the graduates. US Consul General in Peshawar, Ms Candace Putnam, attended the ceremony the officials of Fata Secretariat and USAID besides the senior members of the faculties of the NWFP University of Engineering & Technology.
Speaking at diploma awarding ceremony of the graduates of Gemology Training Course at the Governor’s House, Monday, he said: “We need to establish a centre of excellence in this sector under the aegis of the University of Engineering & Technology and develop skilled manpower.”
The six-month course, which was fourth of its nature, was meant for students from Fata and was arranged by the NWFP University of Engineering & Technology through the sponsorship of USAID. All 15 graduates from Fata were awarded diplomas on the occasion.
The governor, who is also the Chancellor of the NWFP University of Engineering & Technology, said attracting
international buyers was a sensitive matter and to attain recognition there was a dire need to establish a gems certification and evaluation laboratory in the provincial metropolitan.
Owais Ghani also lauded the USAID for sponsoring the training saying that it would go a long way towards generating job opportunities for youth and encouraging export of value-added precious stones instead of rough material.
“We need to move from practices of exporting precious stones in rough forms to an internationally recognised level of quality material,” he said.
In fact, he said, huge deposits of different kinds of minerals exist in the NWFP and Fata and we also need support and sponsorship for their development and exploitation. He appreciated the enthusiastic approach of the NWFP University of Engineering & Technology for promoting skilled manpower and assured every possible help and support in its efforts for further up-grading the educational facilities.
Vice Chancellor of the university Syed Imtiaz Hussain Gilani said the university had been promoting knowledge in the gemstones sector for quite some time and three batches of the series had already passed out.
Sheheryar Khan, director, Fata Development and Livelihood Development Project, highlighted importance of the course and said that community participation was the focal point of the programme.
Later, the governor awarded certificates to the graduates. US Consul General in Peshawar, Ms Candace Putnam, attended the ceremony the officials of Fata Secretariat and USAID besides the senior members of the faculties of the NWFP University of Engineering & Technology.
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