четверг, 29 ноября 2007 г.

Japan's Bonds Fall as Global Stock Rally Saps Demand for Debt

Japan's five-year bonds declined after a rally in global stocks and a rebound in industrial production reduced investor appetite for debt.

Demand at a two-year note auction fell to the lowest since August 2006 after U.S. Treasuries completed the biggest two-day slide since 2004 and European debt had the steepest decline in three months. The perceived risk of issuers in the Asia-Pacific region defaulting on their debt decreased today on speculation the Federal Reserve will cut interest rates next month.

``JGBs will be sold off,'' said Xinyi Lu, chief strategist at the international treasury division at Mizuho Corporate Bank Ltd. in Tokyo. ``The Fed is going to cut rates, so people became a little bit optimistic about Japan's economy.''

The yield on the 1.1 percent note due September 2012 rose 1.5 basis points to 1.04 percent as of 5:48 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. The price fell 0.068 yen to 100.274 yen. The yield on the benchmark 10-year bond was unchanged at 1.485 percent.

Ten-year bond futures for December delivery declined 0.14 to 136.96 as of the afternoon close in Tokyo. The Nikkei 225 Stock Average gained 2.4 percent.
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U.K. Gilts Open Little Changed; Yields Hold Near Two-Week High

U.K. government bonds opened little changed, with yields near the highest in two weeks.

The yield on the 10-year gilt rose 1 basis point to 4.69 percent by 8:14 a.m. in London. The price of the 4 percent bond due September 2016 fell 0.08, or 80 pence per 1,000-pound ($2,071) face amount, to 95.10.

Two-year note yields held at 4.57. Yields move inversely to bond prices.

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пятница, 23 ноября 2007 г.

French Banks to Develop Fund to Provide Liquidity, FT Says

Five French banks are planning to develop a fund to buy securities backed by assets, the Financial Times reported, citing its French partner newspaper Les Echos.

The goal of the project, organized by BNP Paribas SA, Societe Generale SA, Credit Agricole SA, Natixis SA and HSBC France, is to ensure liquidity for asset-management funds, the FT said.

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Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show

The risk of European companies defaulting on their debt rose, according to traders of credit- default swaps.

Contracts on the iTraxx Crossover Index of 50 European companies with mostly high-risk, high-yield credit ratings increased 4 basis points to 394 basis points, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality worsen.

The iTraxx Europe index of 125 companies with investment- grade ratings rose 1 basis point to 63 basis points, Deutsche Bank prices show.

A basis point on a credit-default swap contract protecting 10 million euros ($14.8 million) of debt from default for five years is equivalent to 1,000 euros a year.

Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
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среда, 21 ноября 2007 г.

Japan's 10-Year Bonds Gain as Stock Slide Spurs Demand for Debt

Japan's 10-year bonds rose, reversing a decline, on speculation a slide in local stocks increased demand for the relative safety of government debt.

Yields on benchmark 10-year notes fell to a 22-month low as Japanese shares declined after the Federal Reserve revealed it cut its 2008 growth forecast for the U.S., Japan's biggest export market. Bonds also rose after the Ministry of Finance sold 800 billion yen ($7.3 billion) of 20-year debt.

``The market is reacting to Asian equities, which are down relatively sharply,'' said Naomi Hasegawa, a senior bond strategist at Mitsubishi UFJ Securities Co. in Tokyo. ``The market will trade up for the rest of the day.''

The yield on the 1.7 percent bond due September 2017 fell 3.5 basis points to 1.43 percent as of 3:07 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. It was the biggest decrease since Nov. 2. The price gained 0.307 yen to 102.323 yen. The yield was earlier as low as 1.42 percent. A basis point is 0.01 percentage point.

Ten-year bond futures for December delivery gained 0.32 to 137.30 on the Tokyo Stock Exchange. The Nikkei 225 Stock Average declined 2.5 percent and the MSCI Asia Pacific Index of regional stocks lost 1.8 percent.

Japan's bonds typically move in the opposite direction to stocks. Benchmark 10-year yields had a correlation of 0.97 with the Nikkei 225 this month, according to data compiled by Bloomberg. A value of 1 would mean the two moved in lockstep.
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WTO Nations Seek Trade Pact Amid Slowdown, Nath Says

World Trade Organization members are seeking a successful conclusion of the Doha round of trade talks to counter an economic slowdown sparked by mortgage defaults and rising oil prices, India's Trade Minister Kamal Nath said.

``Everybody is looking for an antidote to the uncertain global economic output,'' Nath, one of the four key partners in international trade talks besides the U.S., Europe and Brazil, said in an interview in Singapore. ``A successful Doha round will perhaps be a good antidote.''

U.S. Trade Representative Susan Schwab said this week a trade pact is possible in the next 14 months after repeated breakdowns in negotiations since 2001. The deal could add $96 billion annually to the global economy, which the International Monetary Fund forecasts may slow next year due to a housing recession in the U.S.

The WTO talks have failed to yield results so far because the U.S. and Europe won't lower farm subsidies fast enough, while developing nations including India, Brazil and South Africa say they would have to cut industrial tariffs more than developed countries.

Schwab, who was in Singapore to meet with trade ministers from the 10-member Association of Southeast Asian Nations, said the world's biggest economy is showing more flexibility in the world trade talks, adding there's ``every reason to expect'' the Doha round can be concluded before President George W. Bush leaves office in January 2009.

U.S. Flexibility

``I think so too because of the flexibility the U.S. proposes to show,'' Nath said. ``Probably the flexibilities which she has in her pocket are the flexibilities which are needed to move forward on this. Certainly the U.S. is the most important player on this and the moment the U.S. shows flexibility the process moves on.''

The IMF last month cut its projection for global growth next year to 4.8 percent from an estimate of 5.2 percent in July and warned that even its new prediction may be too optimistic given threats posed by the sell-off in credit markets.

The U.S. subprime crisis has claimed the jobs of three Wall Street chief executive officers including Citigroup Inc.'s Charles O. Prince III and prompted more than $45 billion in writedowns at the world's biggest banks. The total global loss from the subprime mess may reach $400 billion, Deutsche Bank AG said Nov. 12.
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понедельник, 19 ноября 2007 г.

ICAP Profit May Rise as Volatile Markets Boost Trading: Outlook

ICAP Plc, the world's largest broker of transactions between banks, may report an increase in first- half profit tomorrow after slumping credit markets drove record trading in currencies, stocks, bonds and their derivatives.

Net income probably rose by about 26 percent to 72.8 million pounds ($149 million) for the half-year to Sept. 30 from a year earlier, according to the average estimate of four analysts surveyed by Bloomberg. London-based ICAP, which acts as a go- between for trades in financial markets, is likely to have increased revenue 13 percent to 615 million pounds.

ICAP's computer-based foreign exchange and bond trading systems, its most profitable businesses, handled more than $1 trillion on six days in the first half. ICAP, which profits when prices fluctuate, may benefit as traders use the firm to bet on or hedge losses linked to record U.S. home foreclosures.

``This summer saw record flows, and given current market conditions and ICAP's positioning, there is some reason to believe that they will continue to perform well,'' said Roger Tejwani, an analyst at Numis Securities Ltd. in London who has a ``buy'' recommendation on the stock.

ICAP has risen 25 percent this year, reaching a record 640 pence on Nov 9. The shares were trading at 598.5 pence at 8:50 a.m. in London today, valuing the company at about 3.86 billion pounds.

The broker may have limited upside as banks and securities firms seek to reduce the fees they pay interdealer brokers because of losses stemming from subprime mortgages, Credit Suisse analyst Rupak Ghose wrote last week. He switched his rating to ``neutral'' from ``outperform.''
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