The largest commercial bank of China, the ICBC has started two-day bond sale worth 50 billion yuan to increase its capital. The sale comprises 10-year bonds totaling 10 billion yuan and 15-year bonds totaling 40 billion yuan, reported Chinabond.com. The bank is trying to raise capital by all means as Chinese banks face stricter CAR of 12.51%, increased lending and decreasing deposits.
BNP Paribas SA and Credit Agricole SA, the leading French corporate bond distributors predict slowdown for 2012 as both companies have managed to attract the least amount of capital in second half of 2011 since 2007. The turnover of bonds issued by French firms had declined 22% from July 1. The bond market may tumble even more as S&P considers the downgrading of France.
According to announcement of Angela Merkel's party, Germany is considering speeding up bailout payments to European Stability Mechanism in order to ensure higher ratings for nation's bonds and get higher independence from rating agencies. Germany is likely to pay 8.6 bn Euros in bailout fund to encourage other Euro Zone members to amplify their payments.
In November South African borrowing rose faster compared to previous month reaching increase of 6.22% as nation's central bank maintained its interest rate unchanged at 5.5% or 30-year record low to boost growth in Africa's biggest economy. Borrowing by businesses and households added 5.5% compared to October, reported Reserve bank. South African economy expanded 1.4% in third quarter.
New Zealand and Australian Dollars strengthened on Friday against their major trading counterparts as Asian stocks recovered, stimulating demand for more risky assets. Both Australian and New Zealand Dollars gained 0.2% against US Dollar reaching $1.0155 and $0.7726 respectively. Appreciation in both currencies also was fuelled by expectations on next week data that may show US manufacturing has escalated.
Housing prices in Australian 8 main cities dropped 3.7% during period January-November 2011, creating the biggest fall in 12 years on anxiety European debt turmoil may harm the country's economic growth. Decline in home prices was led by Brisbane slipping 7% and Melbourne giving up 5.7%, said property researcher RP Data. Home loans increased by 5.7%, the slowest annual pace since 1977.
Bank of America is on path to become the worst stock within Dow Jones Industrial Average Index for 2011. Growing concern among investors about escalating mortgage losses amid global slowdown pushed down the value of US second-largest lender. On year to date basis, Bank of America has plunged 59.07% with one trading session left. Bank of America is likely to be the worst performer of
US stocks traded higher on Thursday as the number of long-term jobless claims indicated positive trend for US employment level. Dow Jones Industrial Average gained 1.12% or 135.63 points closing at 12,287.04. S&P 500 Index added 1.1% or 13.38 points reaching 1,263.02, while Nasdaq Composite climbed 0.9% or 23.76 points at 2,613.74.
In December China Purchasing Managers' Index dropped to 48.7, compared to preliminary reading of 49.0, said HSBC who issued the survey. Level below 50 is indicating contraction. The survey showed the weakest reading on a quarterly basis since 2009. Although speed of slowdown is alleviating, weakening exports demand is harming the growth, said Hongbin Qu, HSBC economist.
US pending home sales increased essentially in November, approaching 19-month high. The pending home sales index jumped by 7.3% last month while analysts expected only 1.5% increase, reported the National Association of Realtors. The jump may be a result of delayed transactions, said Lawrence Yun, chief economist. After the release of data, USD advanced against the Euro and the pair EUR/USD was traded at 1.2928,
On Friday Asian markets managed partly recover from previous days' losses and traded higher on the last trading session in 2011. Japan's Nikkei Stock Average and Hong Kong's Hang Seng Index each gained 0.5%, while China's Shanghai Composite advanced 0.9%. Only Australia's S&P/ASX 200 index extended losses and was down 0.4%. Markets in South Korea were shut for a holiday.
South Korean factory output decreased last month on the weaker demand in the country. The output declined by 0.4% in November on a monthly basis, beating the expectations of analysts. Spending on construction and equipment eyed the biggest decrease. Experts claim the global downturn and high debts of the households severely impacted many businesses. The Bank of Korea's manufacturer's outlook index decreased from 83 this
Germany's inflation rate decreased in December as European region's sovereign debt turmoil is hurting economic expansion. The inflation rate fell from 2.8% in November to 2.4% in current month. The reading matches economists' expectations. Euro area countries are facing severe spending cuts to reduce debt which hampers growth and as a result, the inflation, said Marina Luetje, Dekabank's economist.
On Thursday Japan's Nikkei Stock Average fell 0.29% or 24.73 points and closed at 8,398.89 as export dependent companies tumbled on European anxiety. Japan's technology exporters were the main losers in Tokyo, affected by the drop in the European common currency against the Japanese Yen. Sharp Corp. declined 3.2%, Casio Computer Co. traded down 2.7% while Advantest Corp. decreased 1.1%. Equities of Elpida Memory Inc. lost
Dow Jones Industrial Average edged down 1.14% or 139.94 points to 12,151.41 as investors were concerned about forthcoming Italian 10-year bond auction on Thursday. All 30 of blue chip's constituents declined. Nevertheless Dow Jones still is 5% up on a yearly basis. Among worst performers was Bank of America, giving up 3.47%, aluminum producer Alcoa Inc. falling 3.07% and machinery producer Caterpillar which sank by 2.38%.
Hong Kong's Hang Seng Index lost 0.65% or 120.75 points and finished at 18,397.92, as investors remained cautions before Italian bond auction. Commodity companies extended previous days' losses as China Coal Energy Co. fell 1.5%, Cnooc Ltd. dropped 1% and Zijin Mining Group Co was down 2.4%. Financials also contributed negatively to the index as China Resources Land Ltd declined 4.9% and Agile Property Holdings Ltd.
Canadian Dollar depreciated as nation's stocks fell after ECB's balance sheet rallied to a record high bolstering fears fiscal crisis can hurt economic growth. Canadian domestic currency fell 0.6% to C$1.0244 per US Dollar in Toronto evening trade. Before ECB announcement Loonie had strengthened to three-week record high. Currently USD/CAD is trading at C$1.0243.
Italy auctioned government notes worth 7 bn Euros and nation's borrowing costs declined. Treasury in Rome managed to sell 2.5bn Euros of offered 3 bn Euros in 2-year bonds at yield of 5.62% compared to that of 7.89% in November auction. Borrowing costs for 10-year Italian bonds reached 6.98% compared to 7.56% month before.
S&P 500 experienced a sharp decline on Wednesday as investors were concerned about Thursday's Italian long-term debt auction. US benchmark index slipped 1.25% or 15.79 points to 1,249.64 and drove into negative area for 2011 reaching minus 0.64% year to date change. All 10 industry groups faced a drop led by energy and natural resource stocks. Cliffs Natural Resources Inc. fell 4.62% while Tesoro Petroleum
Iberia announced it cancelled 118 flights scheduled today due to pilot strike. Pilots are protesting to launch of new low cost unit as setting up such unit contradicts to Iberia collective agreement. The company rejects the claim while pilots say they will continue strike until the consensus is reached with Iberia management.
Sugar futures eased down in the year-end trade amid the firmed USD and ample supplies due to Russia's report on the sugar output approaching a record high of 5.1 million metric tons. Sugar futures for delivery in March traded at USD0.2311 a pound during the European afternoon session, on the ICE Futures US Exchange, edging down 0.38%.
Hungary sold 15bn forints on the debt auction as compared to government's target of 18bn forints. The country already negotiates refinancing package with the IMF and EC. However, the talks were prolonged due to fears over lack of independence of Hungary's central bank. The interest rate on the country's 10-year bonds surged from 8.78% to 9.7%.
Soybean futures eased down but traded close to seven-week high as market eyed unfavorable weather forecast for South America. Soybeans futures for delivery in March traded at USD12.0375 a bushel at the early European trade, on the Chicago Mercantile Exchange, edging down 0.3%.
Italian PM announced the Euro Zone members should act jointly to resolve the region's debt crisis. Despite two successful bond auctions, Italy is still far away from getting out of recession, he added. Italy raised about 7bn euros of debt at the today's auction. Italian 10-year bonds' interest rate stands at 6.98%, the level considered to be hardly sustainable.