plus 3, Euro slumps to lowest point vs dollar since May - YAHOO!

Euro slumps to lowest point vs dollar since May - YAHOO!
Shares Falter as China Tightens Bank Rules - New York Times
Liberty Mutual sets Hub expansion - Boston Globe
European Markets Falter as China Tightens Bank Rules - New York Times

Euro slumps to lowest point vs dollar since May - YAHOO!

Posted: 12 Feb 2010 07:13 AM PST

Message from fivefilters.org: If you can, please donate to the full-text RSS service so we can continue developing it.

LONDON (AFP) – The European single currency slumped close to a nine-month dollar low point on Friday when markets took a dim view of eurozone growth data and half-baked EU proposals to help debt-ridden Greece.

Investors also sought the safe-haven dollar after China ordered financial institutions to increase the amount of money they keep in reserve, as Beijing looked to rein in rampant lending amid fears of asset bubbles.

On other world markets, stocks diverged and crude oil prices slid.

In late morning trading here, the euro tumbled to 1.3532 dollars, the lowest level since May 19. That compared with 1.3695 in New York late on Thursday.

"The euro is weakening in response to ongoing market concerns over the eurozone sovereign debt crisis," said Neil MacKinnon, economist at Russian investment bank VTB Capital.

"Today's eurozone economic data does not help either. To add to the fire, China raised required reserve ratios again, which is putting risk assets under pressure again."

Late on Thursday, EU leaders stopped short of offering bailout funds to rescue Greece, a eurozone member. Deep problems in Greek public finances have highlighted the parlous debt of other crisis-hit countries such as Italy and Spain.

The union's 27 leaders vowed "determined and coordinated action if needed to safeguard the financial stability in the euro area as a whole", but they have yet to provide details of any action.

Official data on Friday showed that Europe's economic recovery has stalled, with the heavyweight German economy grinding to a halt in the fourth quarter of 2009 and Italy switching back to contraction.

Economic growth in the 16 nations using the euro single currency was a meagre 0.1 percent over the previous quarter compared to 0.4 percent growth in the third quarter, data agency Eurostat said.

Gross domestic product (GDP) -- the combined value of all the goods and services produced in an economy -- fell by 4.0 percent last year in the eurozone.

"Weaker GDP figures out of Germany and the eurozone has raised uncertainty over the pace of the economic recovery within Europe helping to sap earlier equity gains," said City Index analyst Joshua Raymond.

"The figures are a bit of a surprise and have raised tension in Europe, that despite yesterday's agreement to help Greece, the economic recovery within the eurozone may be slower than first hoped."

In recent weeks, the euro has been plagued by concerns about rocky public finances in the eurozone -- particularly in peripheral members Portugal, Ireland, Italy, Greece and Spain.

The prospect of an eventual Greek debt default has stalked markets for weeks, with the cost of borrowing shooting through the roof for Athens.

Public finances across the world have taken a hammering from emergency fiscal stimulus measures and bank bailouts to counter recession, and tax revenues have been cut by the downturn.

"Without specific detail of any (EU) support package (for Greece), there is risk that the eurozone debt crisis escalates which could easily turn into a currency crisis," MacKinnon warned.

Lloyds Banking Group economist Kenneth Broux labelled the EU meeting a "political bailout" -- and added that next week's upcoming meeting of eurozone finance ministers should clarify matters.

"The summit was a political bailout and lacked substance on the framework of how assistance would work in practice," Broux said.

"There simply is no rulebook. I hope and expect the Ecofin meeting next week will fill in the blanks, and this will restore some degree of confidence that has deserted the peripheral EU debt markets."

European stock markets diverged near the half-way stage on Friday, with Frankfurt up 0.15 percent, London down 0.42 percent and Paris shedding 0.33 percent.

Wall Street had rallied Thursday as sentiment was lifted by the EU pledge to help Greece stave off a debt crisis and better-than-expected US labor market data.

In Asia on Friday, markets were generally higher in quiet trade ahead of Sunday's Lunar New Year and the start of a week-long holiday in China.

Tokyo finished 1.29 percent higher but Hong Kong fell 0.11 in a late bout of profit-taking.

Meanwhile in Beijing on Friday, the People's Bank of China said the deposit reserve ratio would be raised by 50 basis points as of February 25, the second increase since the start of the year.

The ratio is the minimum amount of money that banks must keep in reserve and not use for lending or other purposes.

The announcement is the latest sign the government is moving to control an explosion in new lending that has raised fears of inflation, economic overheating and a possible rash of bad loans.

Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Shares Falter as China Tightens Bank Rules - New York Times

Posted: 12 Feb 2010 06:52 AM PST

Message from fivefilters.org: If you can, please donate to the full-text RSS service so we can continue developing it.

Market indexes in the United States and Europe declined on Friday, weighed down by reports that the Continent's economic recovery almost ground to a halt late last year and that China's central bank had taken additional steps to curb lending.

In Beijing, the Chinese central bank, for the second time in less than five weeks, ordered big commercial banks to park a larger share of their deposits at the central bank, a move aimed at forestalling inflation by controlling a rapid expansion in bank loans.

The announcement came after the Asian markets had closed for the day, but reaction was swift in European markets, with indexes declining sharply. In afternoon trading, the FTSE 100 in London was down 26.60 points or 0.54 percent, and the CAC-40 in Paris dropped 25.15 points or 0.7 percent, and the DAX in Frankfurt was 18.93 points, or 0.34 percent, lower.

Indexes on Wall Street followed suit. In mid-morning trading, the Dow Jones industrial average was down 1.21 percent or 120.54 points. The broader Standard & Poor's 500 stock index dropped 1 percent or 10.97 points, and the technology heavy Nasdaq fell 0.7 percent or 15.84 points.

Earlier, Eurostat, the European Union's statistics agency, reported that the 16 countries that use the euro barely grew in the fourth quarter, lagging behind the United States. Gross domestic product in the euro zone grew only 0.1 percent in the last three months of 2009 from the previous period.

And in the background remained the endgame for Greece and its debt troubles. Stock markets took only limited comfort from Thursday's news out of Brussels, which was little more than a statement from European leaders that they would aid Greece, if needed. The officials offered no details.

While European leaders' declaration of support may have helped ease worries of a debt default, it did little to lift the euro, which hovered around nine-month lows against the dollar.

The currency, shared by 16 European countries, remains dogged by concerns about the fragile finances of several nations in the euro bloc, analysts said. The euro has sagged sharply against the dollar and the yen since January, as worries about a potential debt default by Greece began to surface.

At the start of this year, a euro bought around $1.45 and 133 yen; on Friday, it bought just less than $1.36, and about 123 yen.

Friday's levels were a touch lower than Thursday's — despite the European support for Greece — meaning the single currency remains around its weakest level against dollar since May last year. The last time the euro was at such levels against the yen was a year ago.

Before the opening on Wall Street, the Commerce Department reported that retail sales rose 0.5 percent last month, topping forecasts of 0.3 percent. Sales grew 0.6 percent in January excluding autos, which also better than expected. The report had little effect on Wall Street. The agency also reported that business inventories declined 0.2 percent in December, a weaker-than-expected performance.

The main stock market indexes in the Asia-Pacific region were mixed, with muted rises in Japan, Singapore and Australia, and equally limited falls in South Korea and Hong Kong.

The Nikkei 225 index in Tokyo gained 1.3 percent, while the Straits Times index in Singapore edged up 0.2 percent and the benchmark index in Australia 0.1 percent. In South Korea, the Kospi index slipped 0.3 percent, and the Hang Seng in Hong Kong finished 0.1 percent lower. Markets in India and Taiwan were closed for a holiday.

Activity across much of the Asia-Pacific region was also damped ahead of the Lunar New Year holiday, which will shut many markets — notably China, Hong Kong, Singapore and Taiwan — on Monday. Some will be closed on Tuesday as well.

"Risk appetite should gradually resume — unless we get massive violence in the streets of Greece," said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong, , referring to worries that the Greek government's efforts to reduce its deficit will be constrained by mass opposition to cutbacks.

Striking civil servants brought public services to a halt across Greece on Wednesday, in a largely peaceful one-day protest against the tough austerity measures that officials have said are necessary to stave off a mounting financial crisis. A much broader strike is planned for Feb. 24.

"Feb. 24 will be a day to watch," Mr. Kowalczyk said.

Matthew Saltmarsh and Keith Bradsher contributed reporting.

Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Liberty Mutual sets Hub expansion - Boston Globe

Posted: 12 Feb 2010 07:13 AM PST

Message from fivefilters.org: If you can, please donate to the full-text RSS service so we can continue developing it.

Liberty Mutual Group

Founded 1912

Business Property and casualty insurance

Chief executive Edmund F. Kelly

Employees 45,000 worldwide, 2,500 in Boston

Revenue $28.9 billion (2008)

SOURCE: Liberty Mutual

Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

European Markets Falter as China Tightens Bank Rules - New York Times

Posted: 12 Feb 2010 06:31 AM PST

Message from fivefilters.org: If you can, please donate to the full-text RSS service so we can continue developing it.

While European leaders' declaration of support may have helped ease worries of a debt default, it did little to lift the euro, which hovered around nine-month lows against the dollar.

At the start of this year, a euro bought around $1.45 and 133 yen; on Friday, it bought just less than $1.36, and about 123 yen.

The main stock market indexes in the Asia-Pacific region were mixed, with muted rises in Japan, Singapore and Australia, and equally limited falls in South Korea and Hong Kong.

"Feb. 24 will be a day to watch," Mr. Kowalczyk said.

Matthew Saltmarsh and Keith Bradsher contributed reporting.

Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.