October 15th, 2010 06:33:19 GMT

USD/JPY slips slightly


Down at 81.15 from around 81.30 when I arrived amid talk of macro funds selling.

Earlier had reports of buy orders clustered at 81.00/10.  Anyone’s guess as to whether they’ll be enough to hold the line.


October 15th, 2010 06:26:22 GMT



We’re presently at 1.4070.

Yesterday we had talk of decent sell orders lined up at 1.4125.  Guess they’ll still be there.  Talk of 1.4150 barrier interest, stops above there. On downside, stops below 1.4000.


October 15th, 2010 06:16:06 GMT

BOJ Report: 3 Japan Regions Cut View, Recovery Pace Slower


TOKYO (MNI) – The Bank of Japan on Friday said that three out of
the nine regions downgraded their regional economic assessment from
three months ago, noting that the pace of recovery has slowed.

The latest assessment is based on reports from BOJ branch managers
who met here for a one-day quarterly meeting.

“All nine regions in Japan judged that, on the whole, their
economies had either recovered at a moderate pace of picked up,” the BOJ
said in its latest regional economic report.

“Three regions (Kanto-Koshinetsu and Tokai in central Japan and
Chugoku in the west), however, reported that the pace of recovery or
pick-up had recently slowed mainly due to the waning effects of policy
measures and the slowdown in overseas economies.”

The three regions lowered their economic assessment from July.

It is the first time since April 2009 that at least one region has
lowered its economic assessment from the previous meeting.

In April 2009, seven out of the nine regions cut their regional
economic assessment from three months earlier.

In the latest report, the BOJ said, “Many regions continued to
point either to the low level of economic activity or to differences in
developments among regions or industries.”

The quarterly economic report, or Sakura Report, is equivalent to
the U.S. Federal Reserve’s Beige Book.

After its last policy-setting meeting, the BOJ board on Oct. 5
slightly downgraded its overall economic assessment for October from the
previous month, saying, “Japan’s economy still shows signs of a moderate
recovery, but the pace of recovery is slowing down.”

In September, it said, “Japan’s economy shows signs further signs
of a moderate recovery.”

In Friday’s regional report, the BOJ said, “The employment and
income situation remained severe, but all regions reported that the
degree of severity had eased.”

As for capital investment, it said that “six regions noted that it
was picking up, had begun to pick up, or that it had increased although
remaining at a low level.”

“Two regions reported that business fixed investment had stopped
declining,” it added.

Meanwhile, six regions said that private consumption was picking up
or that its decline had been coming to a halt “because the degree of
severity in the employment and income situation had eased.”

The BOJ also said that “almost all regions pointed to the drop in
sales of passenger cars following a last-minute increase in demand ahead
of the expiration of subsidies for purchases of environmentally friendly

Managers from the BOJ’s 32 domestic branches and two general
managers from the U.S. and Europe gathered to discuss economic and
financial conditions at the bank’s head office.

Earlier on Friday, BOJ Governor Masaaki Shirakawa told them in his
opening remarks at the meeting that the BOJ must pay attention to
downside risks to sustained economic growth and a recovery from years of

“Comparing with the outlook presented in the bank’s July interim
assessment, the economic growth rate is likely to be somewhat lower than
expected,” he said.

“In addition, amid heightened uncertainty about the future,
especially for the U.S. economy, attention should still be paid to
downside risks to Japan’s economy.”

Shirakawa also said, “It has become more likely that the return of
Japan’s economy to the sustainable growth path with price stability will
be delayed.”

He maintained the BOJ’s view that Japan’s economy is likely to
return to a sustainable recovery path, although that the pace of
economic improvement will slow for the time being.

** Market News International Tokyo Newsroom: 81-3-5403-4833 **


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October 15th, 2010 06:07:19 GMT

ACEA: EMU 14 Car Regs Drop In Sep For 6th Straight Month Y/Y


FRANKFURT (MNI) – New passenger car registrations in the Eurozone,
excluding Cyprus and Malta, fell for the sixth straight month in
September on an annual basis, data from the sector group ACEA showed

The 12.4% annual drop in September followed August’s 15.7% drop.
Western European (EU 15) registrations were down 10.5% on the year,
after August’s -14.1%.

Among large Eurozone countries, German registrations were down
17.8% on the year in September. Italian registrations fell 18.9% in
September and French registrations also dipped 8.2%. In Spain,
registrations were 27.3% lower on the year.

The annual drops reflect the end of car scrapping premia across
Europe, which were used last year and early this year to spark domestic
demand and reignite the industry.

Now, however, as these programs have run out of gas, purchase and
registration volumes have fallen accordingly.

But Germany will likely be the market to see a turnaround first.
This is not only because its scrapping premium ended earlier,
effectively running out of cash last September — which means that its
negative base effect is pretty much finished — but also because its
economic and labor market situation outshine its Eurozone counterparts
by far.

“Optimism with regard to personal income and the [moderate] price
climate in Germany are boosting what is already an encouraging level of
buying propensity,” the research institute GfK said in its
forward-looking indicator late last month.

“Domestic demand has started to pick up, both private consumption
spending and business investments are increasing perceptibly,” Germany’s
six leading institutes wrote in their semi-annual economic assessment
released Thursday.

Other sentiment indicators also put the German consumer climate for
durable goods in a positive light. The indicator measuring the
propensity of consumers to make major purchases over the next twelve
months increased marginally in September in Germany. By contrast, the
indicator fell or remained unchanged in France, Italy and Spain.

– Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com –

[TOPICS: M$X$$$,M$XDS$,MT$$$$]

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October 15th, 2010 05:31:50 GMT

ECB’s Stark: Would be fatal if currency wars evolved in to race to devalue


  • Inappropriate currency movements damaging to economic and financial stability
  • There are good reasons to assume Chinese yuan will gain in value going forward
  • Currency volatility cannot be avoided without better coordination of fiscal, monetary and economic policy
  • Appeals for better coordination of government budget deficit levels on global level, similar to euro zone
  • Process of normalisation in eurozone is underway
  • Have not yet returned to pre-crisis levels of normality
  • Will continue to buy government bonds for as long as necessary
  • Individual banks cannot rely on continued ECB support measures to ensure refinancing
  • Member states and regulators need to take responsibility for working out solutions for weaker banks
  • Have not reached end of restructuring and consolidation of banking sector in eurozone and other regions
  • Household deficits must be brought under control, no country exempt from taking further measures
  • Need changes to stability pact, new measures to monitor macro economic developments
  • After old stability pact has been watered down, new processes needed for imposing sanctions


October 15th, 2010 05:23:50 GMT

EUR/USD touch easier during Asian trade


EUR/USD down at 1.4040 from North American close Thursday up around 1.4080.  Some trimming of long positions ahead of Bernanke’s speech at the Boston Fed conference at 12;15 GMT.  Market will be looking for some QE pointers from the Fed Governor.

Ahead of that we have some euro zone data, but it’s unlikely any of it will move the market very much, if at all:

06:00 GMT: EU 25 new car registrations

08:00 GMT: Italian trade for August expected -1.97 bln

09:00 GMT: Euro zone CPI for September (final) expected +0.2% m/m, +1.8% y/y

09:00 GMT: Euro zone trade balance for August expected +1.3 bln

09:00 GMT: Italian EU harmonized  CPI for September (final) expected +0.5% m/m, +1.6% y/y


October 15th, 2010 05:15:15 GMT

Japan Aug Industrial Output Revised To -0.5% M/M From -0.3%


– Japan Industrial Output Posts 3rd Drop In Row; July -0.2%, June -1.1%

TOKYO (MNI) – Japanese industrial production fell 0.5% in August
from July, revised down from a preliminary 0.3% drop and marking the
third straight monthly decline after -0.2% in July and -1.1% in June,
data from the Ministry of Economy, Trade and Industry Thursday showed.

As the ministry added the food, tobacco and medical sectors that
are not covered in preliminary data, a sharp decline in production of
food including alcohol pushed down overall output more than initially

As seen in the initial reading, output was also dragged down by
lower demand for general machinery, liquid crystal devices and trucks,
which more than offset higher production of medicine, air conditioners
and aluminum cans for beverages.

METI reported last month its survey of firms’ forecasts showed that
production will dip by 0.1% m/m in September — revised down from the
0.2% rise estimated in last month’s survey — before plunging by 2.9% in
October (first estimate).

Industries that are expected to show a decline in October output
are transport equipment, information and communication electronics
equipment as well as fabricated metals.

Autos and electronics, which carry a heavy weighting in the index,
are pulling down overall industrial output while the automobile market
is expected to be weak in October and demand for semiconductors is
falling in both domestic and overseas markets.

Motor vehicle sales have been supported by tax breaks and subsidies
for buying low-emission vehicles but automakers are concerned that
demand will shrink in the coming months since the government ended those
subsidies in September.

The government will maintain reduced tax rates for buying and
owning energy efficient cars and trucks but carmakers are adjusting
production in anticipation for a drop in sales.

Output of general machinery fell a revised 1.2% m/m (preliminary
-1.1%) in August, posting the first m/m drop in five months partly in
payback for a sharp 4.3% rise in July, while iron and steel output
showed a fifth straight m/m drop, down by a revised 1.5% (initially
-1.3%) in August.

Until June’s decline, output had gained every month since March
2009 except for the 1.1% drop in February this year. The sharp 1.1%
decline in June was seen at the time as a temporary blip, due in part to
distorted seasonal adjustments caused by the Lehman shock of 2008.

Production had generally improved from the sharp plunge seen from
late 2008 through early 2009. It rose a record +4.6% m/m in May 2009.

Compared with the year earlier level, production in August this
year rose a revised 15.1% y/y (preliminary +15.4%) following +14.2% in
July. It has recovered from the record 38.6% drop in February 2009. The
6.4% rise in December 2009 was the first y/y gain in 15 months.

Other details from the latest data:

Shipments: Aug revised -0.8% m/m (preliminary -0.5%) vs. July -0.1%
m/m, posting the second straight m/m fall and the fourth drop this year.
The drop was led by decreases in transport equipment, general machinery
as well as food and tobacco.

Inventories: Aug revised +0.8% m/m (preliminary +0.7%) vs. July
-0.5% m/m, marking the first rise in two months and sixth gain this
year. The rise in inventories was led by increases in electronic parts
and devices, general machinery as well as food and tobacco.

The inventory-to-shipments ratio: Aug revised -0.7% m/m
(preliminary -0.9%) vs. July +1.4% m/m, the first drop in two months.

The capacity utilization index: August -0.9% m/m at a seasonally
adjusted 88.3 (vs. 100 = 2005 average) vs. July -0.3%.

** Market News International Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]

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October 15th, 2010 04:55:31 GMT

ECB Stark: Banks Can’t Always Depend on ECB For Refi Needs


FRANKFURT (MNI) – Banks should not assume the European Central Bank
will meet their refinancing needs, ECB Executive Board member Juergen
Stark said in a newspaper interview published Friday.

Stark told German business daily Handelsblatt that “individual
banks or bank groups cannot depend on covering their refinancing needs
via the ECB.”

The ECB will continue buying government bonds “as long as we
consider it to be necessary,” he said, but continues to watch the
situation on the market very closely.

The ECB is gradually unwinding its unconventional measures and
member states must find a solution for banks in need of support, he

“We have to use the chance for a new Stability Pact now — with
more automatism in the procedures and more automatism in the application
of sanctions,” Stark urged.

–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com

[TOPICS: M$$EC$,MT$$$$,M$$CR$,M$$X$$]

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