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UPDATE 1-Ukraine central bank: companies must sell all foreign currency earnings in domestic market

August 20, 2014 - reuters.com

(Amends editing credit; story text unchanged) KIEV, Aug 20 (Reuters) - Ukraine's central bank said on Wednesday companies must sell all of their foreign currency income on the domestic market, up from the previous 50 percent, to offset the pressure of a pro-Russian separatist revolt on the Ukrainian currency. Last week central bank head Valeria Hontareva said a mood of panic was weighing on the hryvnia, which is trading close to an all-time low of 13.70, first reached in mid-April when rebels in the Russian-speaking east declared "people's republics", saying they wanted union with Russia. The decision to tighten mandatory foreign currency sales was taken "given the economic problems linked to the anti-terrorist operation in Ukraine ... and to regulate the situation on the foreign exchange market", the bank said in a statement. The new rule will remain in force until Nov. 21. However, the central bank has extended similar regulations in the past. ID:nL5N0J03DK Banks will have to sell foreign currency earnings the day after receiving the funds from companies, the central bank said. (Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by Mark Heinrich) ((alessandra.prentice@thomsonreuters.com; +7 495 775 12 42; Reuters Messaging: alessandra.prentice.thomsonreuters.com@reuters.net)) Keywords: UKRAINE CRISIS/CURRENCY

Fading volatility promises long period of gold stagnation

August 20, 2014 - reuters.com

* Volatility in gold slumps in line with other markets * Price stagnation 'could go on for 5 years' * Inflation dormant in major economies, for now By Jan Harvey and Clara Denina LONDON, Aug 20 (Reuters) - Ultra-calm trading conditions in gold are becoming self-perpetuating as a persistent lack of volatility frustrates investors seeking a return, pushing them further away from a market that analysts say could be becalmed for years. Gold XAU= , which saw a dramatic reversal last year after a 12-year bull run took prices to record highs in 2011, has seen the spread between its daily price highs and lows narrow to just $15 an ounce this year on average, from nearly $25 in 2013. Implied volatility, an estimation of an asset's future volatility, has dropped in gold to around 12 percent this month from an average of 19 percent in August last year, and from highs of nearly 60 percent in mid-2008. With the dollar strengthening, equities showing a better return, and signs of inflation still notably absent from most developed economies, the metal has run out of reasons to rise. "We are pretty unexcited by the outlook of gold," Charles Morris, head of absolute return at HSBC Global Asset Management, said. "It could stay in this range for another five years. "If inflation is under control for a long period of time, then gold will be under control for a long period of time, and because you don't get a yield, it is a waste of money to have a large position in gold." Gold is not the only market to be losing momentum. Volatility in the global foreign exchange market approached historic lows in July, while average daily volumes dropped by almost 14 percent, data from FX settlement system CLS showed. "What the central banks have done to provide liquidity has pushed down volatility in the commodity market, and interest rates market, and indeed equities," Credit Suisse analyst Tom Kendall said. "They all feed through to every part of the traded economy, so it is a problem for FX traders, it is a problem for interest rates traders, it's a problem across everything." As an asset in its own right, gold does not lack price drivers at the moment. The problem is, they are working against each other. Federal Reserve policy is slowly normalising after years of ultra-loose conditions, which had fed into rising gold prices. The U.S. central bank has signalled that it is ready to start thinking about raising interest rates, probably next year. That should be pushing prices lower, as should a rise in the dollar index this year. But working against that is uncertainty over the long-term inflationary effects of the monetary stimulus measures that followed the 2008 financial crisis. Gold has also taken support from outbreaks of violence in Ukraine and the Middle East, which some fear may destabilise a fledgling recovery in the European Union and push up oil prices. The fact that this unrest has not done more to push prices is adding to investors' caution over gold. "There has been very little and short-lived correlation between the Middle East problems, Russia and Ukraine with gold itself," Adam Laird, investment manager at Hargreaves Lansdown, said. "There is a lot of concern among smaller investors that the market has not been able to react to wider political events." STORE OF VALUE Not all buyers are seeking price volatility. Those who buy metal as a store of value, for instance, prefer a stable market. This has particularly been true in India, historically the world's biggest gold consumer, where buying dried up during the violent price moves that followed the collapse of Lehman Brothers. But supply to Indian consumers has been constrained by restrictions on gold imports as the government tries to get its current account deficit under control, meaning its response to a more appealing price environment has been limited. Meanwhile buyers in China, which has recently overtaken India as the world's number one gold consumer, appear much less happy with price stability. Consumer demand is not in any event going to lead to a repeat of gold's scorching price rise of the last decade. The doubling in gold prices in the three years to September 2011 was overwhelmingly due to investment flows, as funds piled into the metal as a haven from financial market risk. What would turn gold around would be a significant rise in inflation, which few economists see happening any time soon. Until another clear driver emerges, investors prefer to stay on the sidelines. "Essentially, you have plenty of supply, (and) demand is likely to fall because of low volatility, rising interest rates and a strong dollar," HSBC's Morris said. "You put all this together and you think: 'why are people going to come running'?" (Reporting by Jan Harvey; editing by Veronica Brown and Keiron Henderson) ((jan.harvey@thomsonreuters.com; +44)(0)(207 542 7744; Reuters Messaging: jan.harvey.reuters.com@reuters.net)) Keywords: GOLD VOLATILITY/

Zero-yielding German two-year bonds meet strong demand

August 20, 2014 - reuters.com

* Investors bid for twice the amount at German auction * Markets attach higher probability of ECB QE * Bund premium over Treasuries near historic highs * Overnight Eonia hits another record low (Adds comment, updates prices) By Marius Zaharia and John Geddie LONDON, Aug 20 (Reuters) - German two-year debt yields held close to 15-month lows just below zero on Wednesday, with record low money market rates and expectations of easier ECB monetary policy underpinning demand at an auction of similarly dated bonds. Germany sold over 4 billion euros of a new two-year bond, with demand from investors double that amount despite the average yield and the coupon both being zero. ID:nZYN0M8W74 Data last week showing the euro zone economy stagnated in the second quarter even before the impact of sanctions imposed on and by Russia over the conflict in Ukraine cemented expectations European Central Bank interest rates would stay ultra-low for a long time. It has also rekindled expectations the ECB could eventually print money to buy debt, or in market jargon, do quantitative easing (QE). A Reuters poll this week showed money market traders saw a 50-percent probability of QE in the next 12 months, up from a one-in-three chance in last week's survey. ID:nL4N0QO3AO "We've seen really bad growth numbers and these translate into deflation fears, which in turn fuel QE expectations," DZ Bank market strategist Felix Herrmann said, noting that risks around wars in Iraq, Ukraine and Gaza also supported demand at the German auction. "All that argues for lower German yields for shorter and medium term maturities. There are few, if any, reasons for Bund yields to rise." Two-year bonds DE2YT=TWEB yield minus 0.004 percent in the secondary market, meaning buyers will get slightly less money than they invested when the bond comes due. They first traded negative at the height of the euro zone debt crisis in 2012. Some banks may prefer to buy such assets rather than being charged 10 basis points for keeping the money in the ECB's deposit facility - a result of the central bank's unprecedented deposit rate cut into negative territory in June. That rate cut and the ample excess liquidity in the euro zone banking system has pushed the overnight bank-to-bank Eonia lending rate EONIA= fell to a new record low of 0.005 percent. "This is a combination of expectations of very low rates for a very long period of time but also a reflection that the market has raised the odds of the ECB being drawn into taking more serious action," Rabobank senior market economist Elwin de Groot said. DIVERGING RATES Any further loosening of monetary policy from the ECB is likely to come around the time the U.S. Federal Reserve starts to raise interest rates in support of a rebounding U.S. economy. This diversion in policy is likely to further accentuate the widening of the spread between German and U.S. bond yields. In the two-year sector, German bonds offer about a 45 bps premium to their U.S. equivalents, just below the widest premiums in seven years, hit late last month. "The way that the fundamentals are diverging and the rhetoric of the central banks are diverging it sustains this widening move, no question," Credit Agricole's European head of fixed income Luca Jellinek said. Market participants will pour over the minutes from the U.S. Federal Open Market Committee's latest meeting, due to be released at 1800 GMT on Wednesday, looking for hints of when exactly the Fed may make hike rates. Elsewhere in the euro zone, ECB easing expectations pushed other euro zone yields lower on Wednesday. Spanish and Italian 10-year yields hit new record lows earlier in the session, falling 6 and 3 bps respectively to 2.38 and 2.56 percent, before reversing some of those gains in the afternoon. Portuguese and Greek equivalents dropped 12 and 10 bps respectively to two-month lows of 3.31 and 5.80 percent. PT10YT-TWEB GR10YT=TWEB (Editing by Louise Ireland) ((marius.zaharia@thomsonreuters.com; +44 207 542 0950; Reuters Messaging: marius.zaharia.thomsonreuters.com@reuters.net))

Keywords: MARKETS BONDS/EURO

South Africa rand continues slide after banking downgrade

August 20, 2014 - reuters.com

JOHANNESBURG, Aug 20 (Reuters) - South Africa's rand recorded a fourth straight day of losses against the U.S. dollar on Wednesday, pressured by the downgrade of the country's four largest banks and stubbornly high inflation. The market woke up to news on Wednesday that Moody's had cut by a notch the long term local currency deposit ratings for Standard Bank of South Africa SBKJ.J , FirstRand FSRJ.J , Nedbank NEDJ.J and Absa Bank, the local operation for Barclays Group Africa BGAJ.J . ID:nL5N0QP3SC The ratings agency cited the recent $1.6 million bailout of African Bank ABLJ.J by the central bank as a reason for the downgrades. The currency suffered another broadside as month-on-month consumer inflation quickened to 0.8 percent in July from 0.3 percent in June. Monthly prices slowed year-on-year but remain above the central bank's 6 percent target. ID:nJ8N0OC041 The rand eased to 10.6795 by mid-morning on news of the banking downgrade and by 1505 GMT had reached its softest in a week of 10.7000 versus ZAR=D3 the greenback after the inflation release, easing 0.5 percent from its New York close. The rand also weakened in-line with a broader emerging market (EM) slide against the U.S. dollar which was strengthened by positive housing data. ID:nN9N0NL009 "The negative impact of the cuts has been masked by the fact that a lot of EM currencies are underperforming," said Sean McCalgan, an economist at ETM Analytics. "It is apt though that the downgrades took place as a response to the risks that the banks face in these sorts of weak growth conditions, where consumer finances are under a lot of strain." Government bonds strengthened slightly, with yields on both the 2015 paper ZAR157= and the longer-dated 2026 paper ZAR186= down 1.5 basis points, to 6.575 percent and 8.245 percent respectively. (Reporting By Mfuneko Toyana; Editing by Joe Brock) ((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net)) Keywords: MARKETS SAFRICA/CURRENCY

Turkish lira slides as dollar gains ahead of Fed minutes

August 20, 2014 - reuters.com

(Updates prices, details) ISTANBUL, Aug 20 (Reuters) - The Turkish lira weakened on Wednesday as the dollar climbed on upbeat signals on the U.S. housing market and on expectations that minutes from the U.S. Federal Reserve's July meeting awaited later in the day could take a more hawkish tone. Earlier support to the lira from optimism that key economic ministers would remain in a new Turkish cabinet was eroded later in the day. Senior ruling party officials told Reuters the key ministers responsible for the economy were likely to retain their roles when Prime Minister Tayyip Erdogan assumes the presidency later this month. ID:nL5N0QQ10T Investors had been particularly concerned about Deputy Prime Minister Ali Babacan and Finance Minister Mehmet Simsek, who have guided the Turkish economy towards unprecedented stability in recent years. Istanbul's main share index .XU100 closed down 0.52 percent at 78,866.91 points, underperforming the broader emerging markets index .MSCIEF , which was down 0.02 percent. Banking shares .XBANK fell 1 percent after ratings agency Fitch said rapid credit growth and high external debt were raising downside risk in the Turkish banking sector should extremely stressed market conditions arise. ID:nFit710313 The lira TRYTOM=D3 was trading at 2.1775 to the dollar by 1439 GMT versus 2.1645 late on Tuesday. Later in the day, minutes from the last Federal Reserve policy meeting will be released, closely watched by investors in Turkey which relies on foreign capital flows to finance its gaping current account deficit. While there were few expectations for a dramatic shift in the Fed's views on monetary policy, analysts said a slightly more hawkish tone from the U.S. central bank could continue to drive the dollar's strength. ID:nL5N0QQ30D Turkey's benchmark two-year bond yield tTR240216T0=IS rose to 9.32 percent from 9.24 percent a day before. (Writing by Seda Sezer; Editing by Ece Toksabay and Raissa Kasolowsky) ((seda.sezer@thomsonreuters.com)(+90 212 3507062)(Reuters Messaging: seda.sezer.reuters.com@reuters.net)) Keywords: MARKETS TURKEY/

Nigeria naira unchanged as dealers expect oil firm dollar sales

August 20, 2014 - reuters.com

LAGOS, Aug 20 (Reuters) - The Nigerian currency was unchanged at 162.15 naira NGN=D1 to the greenback at Wednesday's market close, as dealers maintained their positions in anticipation of U.S. dollar supply from oil companies next week. The unit closed at 162.13 naira the previous day, broadly at the same level as Wednesday. The naira gained 0.11 percent on Monday after some lenders sold the greenback to stay within a regulatory limit. urn:newsml:reuters.com:*:nL5N0QO2L2 Dealers said demand for hard currency had weakened after an initial rise last week as importers locked in at favourable exchange rates following a recent naira rally. "We expect the naira to trade within the present band of 162 to the dollar this week," one dealer said, adding that it could strengthen as oil companies start their month-end dollar sales. The local currency eased to a five-week low against the U.S. dollar two weeks ago but recovered some ground last week after some oil companies sold the greenback, including the state-owned oil firm NNPC. (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha) ((oludare.mayowa@thomsonreuters.com; +234 803 3964 138;)) Keywords: NIGERIA NAIRA/

UPDATE 2-Russian shares extend rally, rouble weaker vs dollar

August 20, 2014 - reuters.com

(Updates to reflect afternoon trade) MOSCOW, Aug 20 (Reuters) - Russian shares moved higher on Wednesday, extending an eight-day rally, but the rouble weakened further against the dollar ahead of U.S. Federal Reserve minutes. At 1430 GMT, the dollar-denominated RTS index .IRTS was up 0.2 percent at 1,255 points, while the rouble-based MICEX .MCX was up 0.5 percent at 1,445 points. Analysts said tentative signs of diplomatic progress over the Ukraine crisis were underpinning Russian equities but cautioned that low volumes were exaggerating market moves. MICEX has risen by some 10 percent over the past two weeks, but it remains 7 percent below a 2014 high hit in early July, before the downing of a Malaysian airliner over eastern Ukraine which led to stiffer Western sanctions against Russia. Among Russia's most liquid stocks on MICEX, top lender Sberbank SBER.MM rose 0.9 percent, while oil major Rosneft ROSN.MM was up 1.9 percent. Ukrainian President Petro Poroshenko and Russian President Vladimir Putin will meet in Minsk next week to discuss the confrontation, the latest of several diplomatic overtures to resolve the conflict. ID:nL5N0QP3PA But intense fighting is continuing in eastern Ukraine and there is no sign yet of a diplomatic breakthrough, suggesting markets will remain vulnerable. Global markets lost steam on Wednesday as investors were awaiting monthly minutes from the U.S. Federal Reserve that may provide pointers to its future intentions. Strong U.S. housing data on Tuesday has increased the likelihood that the Fed may raise interest rates sooner than expected, a factor that has pushed the dollar to a 9-month high. The rouble was 0.23 percent weaker against the dollar at 36.27 RUBUTSTN=MCX and lost 0.06 percent versus the euro at 48.22 EURRUBTN=MCX . Against the dollar-euro basket it was 0.11 weaker at 41.64. RUS=MCX The rouble has been weakening over recent days despite the start of the monthly tax period that normally supports it as exporters convert hard currency earnings to pay taxes. "Exporters are not hurrying to sell their hard currency earnings, despite the tax period," said Otkritie trader Petr Neimyshev. "The standard factor, which under normal circumstances has a significant influence, is now being negated by geopolitics." Analysts said the rouble's weakness also reflected falling oil prices, as well as central bank moves to reduce support for the currency as it moves towards a free float. ID:nL4N0QQ1T7 ID:nL5N0QO0PQ For rouble poll data see FXRUB FXEURRUB FXRUS For Russian equities guide see RU/EQUITY For Russian treasury bonds see 0#RUTSY=MM Russia in graphics: http://link.reuters.com/dun63s (Reporting by Jason Bush, Elena Orekhova and Alexander Winning Editing by Alison Williams) ((alexander.winning@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: alexander.winning.thomsonreuters.com@reuters.net)) Keywords: RUSSIA MARKETS/

POLONIA Rate falls 0.03 pp.

August 20, 2014 - reuters.com

WARSAW, Aug 20 (Reuters) - POLONIA the reference rate for Overnight deposits amounted to 2.48 percent. The volume of transactions concluded till 16:30 by banks participating in POLONIA fixing amounted to 2,815 mln PLN. Note: Description of reference rate at: http://www.acipolska.pl/ ((warsaw.newsroom@reuters.com))

Sterling rebounds after BoE minutes show split on rate decision

August 20, 2014 - reuters.com

By Anirban Nag LONDON, Aug 20 (Reuters) - Sterling rebounded from four-month lows against the dollar on Wednesday after Bank of England minutes showed two policymakers voted for an interest rate hike in August, catching many investors by surprise. Bank of England policymakers Martin Weale and Ian McCafferty both voted this month to start raising interest rates, becoming the first officials on the nine-member Monetary Policy Committee (MPC) to do so in more than three years. ID:nL9N0PR003 Some in the market had expected only one member at most to vote for a rate rise and news that two favoured such a move prompted the market to bring forward expectations for a first UK interest rate rise to five months' time. GBPOIS=ICAP After last week's Quarterly Inflation Report, which was perceived to be dovish, the market had pushed back forecasts for a rate rise to March, from late 2014. Amid higher volumes, sterling rose to $1.6680 GBP=D4 , up 0.3 percent on the day, after the minutes were released and bucked the broad dollar uptrend .DXY . It had hit a four-month trough of $1.6602 earlier in the day, its lowest since early April. It was last trading at $1.6645, up 0.2 percent on the day. The euro was down 0.5 percent at 79.69 pence EURGBP=D4 , hitting its lowest in a week. The euro had hit a two-month high of 80.37 pence last week after the Inflation Report. Traders said the pound was unlikely to rise much, however, especially given that inflation was well below the BoE's target of 2 percent and wages were yet to show signs of picking up, suggesting considerable slack in the British economy. "Most MPC members found that there weren't sufficient inflation pressures to justify hiking interest rates just yet; this argument is now firmly backed by yesterday's CPI data," said Alex Edwards, head of corporate desk at UKForex. "Most members also want to see more evidence of wage growth before raising rates, and so despite the surprise vote, yesterday's inflation data is dampening the positive impact on the pound." Consumer prices rose 1.6 percent on the year in July, well below forecasts of a 1.8 percent reading, data showed on Tuesday. Month-on-month, the consumer price index fell 0.3 percent. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ BREAKINGVIEWS -BoE split adds muddle to confusion ID:nL4N0QQ320 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ RISKS LURK Sterling had been the best performer by far among major currencies in the year to the start of July, pushed up by expectations the BoE might start raising interest rates to cool the economy as early as November. But while economic growth is robust, rate hike expectations have now been pushed back because wages are not yet rising in real terms. As a result, the sterling trade-weighted index has shed 2 percent =GBP since hitting a six-year high against the dollar in mid-July. Still, risks that more members could join the two hawkish policymakers on the committee in coming months could support the pound, especially against the euro. "On balance the minutes should ease recent sterling weakness somewhat, but we prefer to keep longer positions through euro/sterling shorts," said Josh O'Byrne, strategist at Citi. Reflecting some of the nervousness, the implied volatilities in sterling/dollar and euro/sterling currency pairs edged up. The one-month sterling/dollar implied volatility GBP1MO=R - a gauge of how choppy a currency is likely to be over the next four weeks - rose to around 5 percent from around 4.5 percent at the end of last week. The implied volatility on the euro/sterling EURGBP1MO=R pair also climbed towards 5 percent. (Editing by Susan Fenton) ((anirban.nag@thomsonreuters.com; +44 20 7542 8399 ; Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/STERLING

Banks, funds agree on wider window for FX fix

August 20, 2014 - reuters.com

By Patrick Graham and Jamie McGeever WARSAW/LONDON, Aug 20 (Reuters) - Banks and asset managers are ready to support an extension of the one-minute window used to set currency market benchmarks, documents showed on Wednesday, but most are concerned by the risks involved and divided on how much of an extension. Responses from more than 30 asset managers, banks and industry associations published by global regulators on Wednesday included a wide range of opinions on the 15 proposals laid out by the Financial Stability Board last month. There was broad agreement on the key point that they should pay more to banks for "fixing" services, in order to remove one of the key tensions in the existing system. But on the issue of by how much to widen the window, firms' recommendations varied from an extra minute to extending the period to as much as half an hour. One high-level banking source told Reuters separately that, in discussions in recent weeks, larger banks and clients had called for a much wider window but that many smaller players had been concerned about the scale of the risk this would generate, dividing opinion. The London-based Investment Management Association, which represents UK asset managers who oversee around $10 trillion in investments, was one of those calling for a longer 20-30 minute window. "A wider window may make it easier to accommodate a broad range of orders in large aggregate size, which is itself a desirable objective," regulatory affairs advisers Arjun Singh-Muchelle and Adrian Hood said in the response. UTILITY The $5.3 trillion-a-day foreign exchange market is the world's largest financial market and currently being investigated for collusion. At the centre of the investigations is activity around the WM/Reuters currency fix at 4 pm local time in London, a 60-second window at which major exchange rates are set. These prices are used as reference rates for trillions of dollars of investment and trade globally. In one response published by the FSB, DV Capital LLC's Gaurav Chakravorty attacked the industry as "deteriorating for real money participants" and "fleecing" some participants. While regulators have shown little appetite for any wholesale shift of trading to some form of fully-regulated exchange-based system, the FSB did raise the prospect of creating a new independent utility to isolate and deal with all fixing orders. A number of industry players have already questioned whether such a system would work, be cost-effective, or deal effectively with the currency risk around fixings, and the responses were largely sceptical to the idea. "While a central utility would full maximise netting opportunities, we have concerns about the feasibility of creating a central, global utility," Deutsche Bank, the world's second bigger currency trader, said in its response. The WM/Reuters fix is compiled using data from Thomson Reuters TRI.TO and other providers, which is calculated by WM, a unit of State Street Corp STT.N . The FSB will present its final plans to reform the forex market to G20 leaders at a summit in November. (Editing by Jeremy Gaunt) ((patrick.graham@thomsonreuters.com; +44 207 542 9429; Reuters Messaging: patrick.graham.thomsonreuters.com@reuters.net)) Keywords: FX INVESTIGATION/FSB

UPDATE 1-Kenyan shilling firms, main share index slips

August 20, 2014 - reuters.com

* Profit-taking helps to support the shilling * Kenya Airways shares down by 2 percent (Adds closing rate, shares) By Duncan Miriri NAIROBI, Aug 20 (Reuters) - The Kenyan shilling KES= firmed on Wednesday, lifted by profit-taking and exporters cashing in on the currency's recent losses, while the NSE-20 share index .NSE20 stumbled. At the 1300 GMT close of trade, commercial banks quoted the shilling at 88.20/30 to the dollar, up from Tuesday's close of 88.35/88.45, its low for this year. The shilling slipped past 88.20 per dollar late on Monday, triggering panic-buying among importers in Tuesday's session, which pushed it to its 2014 low. "It (88.20) was like a stop loss for most people. No one thought it would go below that," said a commercial bank trader. Market participants however said the downward pressure had ebbed, as some players booked their gains by selling dollars, meaning the shilling was likely to be hemmed in a band of 88.00-88.50 over the next few days. "Exporters are taking advantage of these favourable rates... we have seen exporters coming out of the woodwork," said the trader. Kenya earns its foreign exchange mainly from exports of tea, fresh produce like cut flowers and the tourism business. On the stock market, the benchmark NSE-20 share index fell by 0.42 percent to close at 5,048.69 points. Kenya Airways KQNA.NR declined by 2 percent to close at 9.60 shillings per share as investors fretted over the impact of the Ebola outbreak in west Africa on its operations. The carrier, whose strategy hinges on connecting African travellers to the rest of the world through its Nairobi hub, suspended its flights to Liberia and Sierra Leone due to concerns over the outbreak of the virus. In the debt market, bonds worth 1.8 billion shillings were traded, down from a volume of 2.9 billion shillings in the previous session. KES= KES1= ...........................Shilling spot rates KESF= 0#KESF= .....................Shilling forward rates EURKES= KESX= KESX1= .......................Cross rates KES=KE ..................................Local contributors CBKINDEX .......................Central Bank of Kenya Index KE/DEBT .....................Kenyan Bonds contributor pages CBK03 CBK06 KE3MTB= ...............Treasury bill yields CBK04 ..................Central bank open market operations CBK07 .........................Horizontal repo transactions KEIBR= , CBK02 ................Daily interbank lending rate 0#KETSYSTR= .............................Kenya Bond pricing ECONAFRICA ..................Real time Africa economic data <ECI & AFR> ...........................African economic news .NSE20 .................................NSE-20 Share Index .NASI .................................NSE All Share Index .FTFNKEN1 ...........................FT NSE Kenya 15 Index .FTFNKEN2 .......................... FT NSE Kenya 25 Index SPEED GUIDES: REUTERS KES/1 KE/DEBT MONEY KE/EQUITY (Editing by Mark Heinrich) ((duncan.miriri@thomsonreuters.com; Tel: +254 204 991 232 ; Reuters Messaging: duncan.miriri.thomsonreuters@reuters.net)) Keywords: KENYA MARKETS

FOREX-U.S. dollar hovers near 11-month highs ahead of Fed minutes

August 20, 2014 - reuters.com

* Dollar gains on optimistic U.S. economic outlook * Fed minutes due at 2:00 p.m. EDT (1800 GMT) (Updates prices, adds comments, changes byline, dateline, previous WARSAW) By Sam Forgione NEW YORK, Aug 20 (Reuters) - The U.S. dollar advanced further on Wednesday, holding at over 11-month highs against a basket of major currencies on a view the U.S. economy was improving and that minutes from the Federal Reserve's July meeting could show a slightly less dovish tilt. The greenback hovered near 11-1/2-month highs against the euro and 4-1/2-month highs against the yen after Tuesday's stronger-than-expected data on U.S. housing starts for July, which analysts said reinforced an optimistic view on U.S. growth and underpinned the dollar's strength. "Overall, the fundamental picture is improving and that's helping to support the dollar," said Eric Viloria, a currency strategist at Wells Fargo Securities in New York. Analysts focused on Wednesday's release of the minutes from the latest Fed policy meeting, due at 2:00 p.m. EDT (1800 GMT). While there were few expectations for a dramatic shift in the Fed's views on monetary policy, analysts said a slightly more hawkish tone from the U.S. central bank could continue to drive the dollar's strength. Investors are watching for hints of when the Fed will tighten its easy money policies by raising interest rates from current rock-bottom levels, which could boost the dollar by driving investment flows into the United States. "If we get a clear signal that there are people in the Fed who seem like they want to change the communication, to open the way for earlier rate normalization, then the market will take notice," said Jens Nordvig, head of G10 FX strategy at Nomura Securities International, on the upcoming Fed minutes. The U.S. dollar index .DXY , which measures the greenback against a basket of six major currencies, was last up 0.19 percent at 82.035, not far from an 11-month high of 82.118 touched earlier in the session. The euro EUR= was last down 0.25 percent against the dollar at $1.3286, remaining below a key technical level of $1.3300 after hitting an 11-1/2-month low of $1.3276. The dollar was last up 0.28 percent against the yen JPY= at 103.27 yen, near an earlier 4-1/2-month high of 103.40. The dollar was last up 0.2 percent against the Swiss franc CHF= at 0.9109 franc, near a seven-month high of 0.9120 hit earlier in the session. The yield on benchmark 10-year U.S. Treasury notes US10YT=RR was last at 2.42 percent, up slightly from 2.41 percent late Tuesday. (Reporting by Sam Forgione; Editing by James Dalgleish) ((Sam.Forgione@thomsonreuters.com; 646-223-6189; Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

Norway c.bank says house price growth not yet causing concern

August 20, 2014 - reuters.com

OSLO, Aug 20 (Reuters) - The Norwegian central bank is not yet concerned by the rate of growth of the country's housing prices, Governor Oeystein Olsen said on Wednesday. "Housing prices are growing again ... It will cause new worries if they were to pick up strongly, but we are not there yet," Olsen told a gathering of Norwegian diplomats. (Reporting by Camilla Knudsen, writing by Terje Solsvik, editing by Gwladys Fouche) ((terje.solsvik@thomsonreuters.com; +47 2293 6974; Reuters Messaging: terje.solsvik.thomsonreuters.com@reuters.net)) Keywords: ECONOMY NORWAY/HOUSEPRICES

UPDATE 2-Brazil central bank eases credit as economy stagnates

August 20, 2014 - reuters.com

(Adds additional central bank plan details, adds currency and other market prices) SAO PAULO/RIO DE JANEIRO, Aug 20 (Reuters) - Brazil's central bank moved to increase the amount of capital available for commercial loans by at least 25 billion reais ($11.1 billion) on Wednesday, part of efforts to boost a stagnant economy, the bank said. The bank took two steps. The first was to cut the amount of capital commercial banks must keep on deposit with the central bank by about 10 billion reais. This is in addition to 30 billion reais freed up in a similar manner July 24. Second, the bank cut the amount of capital that banks must have to back commercial loans. This is expected to add another 15 billion to lending over time, the same amount expected from a similar measure in July, the bank said at a press conference in Brasilia. Wednesday's additions bring the total amount of potential stimulus in the last month to 70 billion reais ($31.1 billion). Brazil's economy is expected to grow 0.79 percent this year, according to a central bank survey released Monday, which would be the lowest rate of annual gross domestic product (GDP) BRGDPY=ECI growth since 2001. The central bank has raised interest rates as well as the amount of capital commercial banks must keep with the central bank as a reserve in recent years, efforts taken to rein in consumer price inflation. The measures though have not prevented Brazil's inflation rate from reaching the 6.5 percent upper limit of the bank's inflation target band BRCPIY=ECI . The target band is 4.5 percent plus or minus two percentage points. Meanwhile, Brazil's economy has stalled, leading to calls for Brazilian President Dilma Rousseff, who is seeking re-election in October elections, to ease credit to boost growth. In July, industrial output BRIOY=ECI slipped 6.9 percent. Brazil's currency, the real BRL= , weakened 0.2 percent against the U.S. dollar to 2.2535 bid in early trading on Wednesday. Brazil's benchmark Bovespa index of the Sao Paulo stock exchanges most-traded shares rose 0.23 percent. (1 dollar = 2.2496 Brazil reais) (Reporting by Patricia Duarte in Sao Paulo and Jeb Blount in Rio de Janeiro; Writing by Jeb Blount in Rio de Janeiro; Editing by Chizu Nomiyama and Nick Zieminski) ((Jeb.Blount@thomsonreuters.com; +55-21-2223-7143; Reuters Messaging: jeb.blount.thomsonreuters.com@reuters.net)) Keywords: BRAZIL CENBANK/

UPDATE 1-Iceland cbank holds key rate, cuts 2014 growth forecast

August 20, 2014 - reuters.com

* Says rate level adequate to keep inflation close to target * Blames weaker US, eurozone economies for lower growth * Cbank governor says conditions improving for easing FX controls (Adds comments from cbank governor, background) REYKJAVIK, Aug 20 (Reuters) - Iceland's central bank kept its key interest rate unchanged at 6.00 percent as expected on Wednesday and said conditions for easing capital controls had improved, but it lowered its growth forecast for the year. The island's economy should expand 3.4 percent in 2014 against a previous forecast of 3.7 percent, the bank said, blaming the downward revision in part on weaker-than-expected growth in both the United States and the euro area. The central bank, which has kept its key lending rate on hold at 6.00 percent since November 2012, said the level should maintain inflation close to target, although it was keeping a close eye on price pressures. Iceland, which is recovering from its worst-ever financial downturn following the collapse of its top banks in 2008, has an inflation target of 2.5 percent, with the annual inflation rate standing at 2.4 percent in July. The central bank warned that domestic demand growth and an improving labour market could lead to increased inflationary pressures, and necessitate a future rate hike. Central bank Governor Mar Gudmundsson, who was last week re-appointed for another five-year term by the government, is expected to lay out plans in the months ahead for the easing of tough capital controls put in place during the country's 2008 financial crisis. ID:nL6N0QL31S Gudmundsson described Iceland's exchange rate as "in a good place now" and said the broader picture had improved, although he declined to give any timing of potential steps to remove controls. "The circumstances to loosen the capital controls have improved a lot since say 2010, 2011, because now the treasury is in balance," he told Reuters. "Last year we had a current account surplus, the credit rating for the treasury is much more stable and it has better access to credit." In July, Iceland saw solid investor interest for its first euro-denominated bond issue since 2006, marking a shift away from the dollar funding it has traditionally relied on as its investor base widens and confidence returns. Still, Gudmundsson said much work needed to be done -- namely the settlement of the country's fallen banks. "That work is not yet finished so we'll have to see how that develops," he said. The central bank forecast a 3.9 percent expansion in 2015 thanks to strong investment in the country's energy-intensive sector and to government stimulus measures. (Reporting by Ragnhildur Sigurdardottir and Mia Shanley in Stockholm, editing by) ((mia.shanley@thomsonreuters.com; +4687001004; Reuters Messaging: mia.shanley.thomsonreuters.com@reuters.net)) Keywords: ICELAND RATES/

London platinum/palladium 1400 fix - Aug 20

August 20, 2014 - reuters.com

UPDATE 1-Ukraine conflict is draining economy, hampering reforms - PM Yatseniuk

August 20, 2014 - reuters.com

* July industrial output down 12 pct y/y * PM disappointed in speed, depth of economic reforms * Ukraine wants third, fourth tranches of IMF aid to be combined (Adds background, IMF comments by finance minister) By Natalia Zinets KIEV, Aug 20 (Reuters) - Ukraine's conflict with separatist rebels is draining the economy by the day and hampering efforts to implement reforms as required by an IMF bailout programme, Prime Minister Arseny Yatseniuk said on Wednesday. According to the terms of a $17 billion International Monetary Fund loan package, Ukraine must implement set reforms, but the country, which is virtually bankrupt and running wide external deficits, has had to divert substantial funds in its fight to contain the pro-Russia insurgency. Attacks by separatists on the infrastructure of the industrial east - mines, power stations, railways and bridges - were intended to strangle the economy, Yatseniuk told a government meeting. "We're losing economic potential by the day ... Russia is aware that rebuilding the Donbass (the industrial east) will cost not millions but billions of hryvnia," he said. Ukraine's economic decline has accelerated since the pro-Russian rebellion erupted in April when rebels set up separatist republics in its Russian-speaking east after political upheaval in Kiev led to the ousting of a Moscow-backed president and Russia's annexation of Crimea. The economy contracted by 4.7 percent in the second quarter compared with the same period last year. With industrial output plummeting 12 percent in July, the economic outlook for the third quarter is not promising. ID:nL6N0Q52PM ID:nL5N0QO26E In June, Yatseniuk asked the IMF, which decides on the disbursement of the second tranche of $1.4 billion on Aug 29., to take into account the extra financial burden of fighting the insurgency. ID:nL6N0P62MI FINANCIAL AID He emphasised the economic toll of the conflict on Wednesday, expressing disappointment at the country's progress. "I am dissatisfied with the speed and depths of reforms. But the steps we have taken will hopefully bring economic stability when peace returns to the country," he said. To qualify for IMF aid, Ukraine agreed to abide by conditions including meeting deficit-reduction targets, raising the price of gas to households and industry and allowing the national currency, the hryvnia UAH= , to float instead of being pegged to the dollar. Finance Minister Oleksander Shlapak said Ukraine wanted the IMF to combine the expected third and fourth portions of aid - a total of around $2.2 billion - to be paid before the end of the year to maintain the payment schedule, which has been delayed so far. ID:nL5N0QQ2PL The financial aid from international lenders helped the central bank stabilise the hryvnia in May, but fears over the mounting economic and human costs of the conflict have hit the currency in recent weeks, causing it to weaken around 13 percent since mid-July. Last week, central bank head Valeria Hontareva said the bank would keep intervening on the local foreign exchange market to offset a "mood of panic" pressuring the hryvnia, which is trading close to all-time lows against the dollar. ID:nL6N0QI3HM However Yatseniuk said there were signs foreign investors believe in the longer-term prospects for the Ukrainian economy. Highlighting the recent purchase by a large foreign bank of 2.2 billion hryvnia ($170 million) of government debt with a maturity of 30 months, Yatseniuk said "it means that they have faith in the stability of the currency market and the economic recovery of the country". (Writing by Alessandra Prentice and Richard Balmforth; Editing by Alison Williams) ((Richard.Balmforth@thomsonreuters.com)(+380442449150)(Reuters Messaging: richard.balmforth.thomsonreuters.com@reuters.net)) Keywords: UKRAINE CRISIS/ECONOMY

INDICATORS - Lebanon - Aug 20

August 20, 2014 - reuters.com

TABLE-NSE Currency Futures traded on Aug 20

August 20, 2014 - reuters.com

Indian rupee hits 3-week high on debt-related dollar inflows

August 20, 2014 - reuters.com

* Rupee ends at 60.61/62 per dlr vs 60.6750/6850 prev close * Heavy buying seen in debt mkt; traders suspect FIIs * Traders expect INR to remain in 60.50-61.80 range in near-term By Swati Bhat MUMBAI, Aug 20 (Reuters) - The Indian rupee rose to a near three-week high against the dollar on Wednesday on the back of strong foreign investor buying in the debt market, although greenback demand from importers and a fall in shares limited further gains. Traders said a large foreign bank was spotted selling dollars, amounting to around $250 million, for investment intended into government bond markets. The focus will shift to global factors, including the release of the minutes of the U.S. Federal Reserve policy meeting in July later in the day and the annual gathering of policymakers and central bankers in Jackson Hole, Wyoming, later this week. "Inflows into the debt market are continuing and that should keep the rupee bias positive. Overall, the sentiment on India remains optimistic," said Subramanian Sharma, director at Greenback Forex. "We will not see the rupee gain much above 60 levels as there will be buying seen at every opportunity whereas exporters will come in to sell around 62. I expect the unit to hold between 60.50 and 61.80 in the medium term," he said. The partially convertible rupee INR=D2 closed at 60.61/62 per dollar compared with 60.6750/6850 in the previous session. The unit hit 60.52 during trade, its highest since July 31, although it ceded ground later in part on dollar demand from importers. The gains in the rupee came on a day when government bonds rallied amid speculation that foreign portfolio investors were active buyers, especially in 5-8 year debt. IN/ Meanwhile, shares edged lower after hitting a third consecutive record high earlier. .BO Foreign funds added 41.22 billion rupees ($677.4 million) in exposure to Indian equity derivatives on Tuesday, exchange data showed. In the offshore non-deliverable forwards PNDF , the one-month contract was at 61, while the three-month contract was at 61.62. FACTORS TO WATCH * Dollar breaks out to 11-mnt highs, eyes on Fed FRX/ * Won, peso lead Asia FX fall on good U.S. house data EMRG/FRX * Asia stx steady on robust U.S. data, dlr gains more MKTS/GLOB * Foreign institutional investor flows INFII INFII01 * For data on currency futures INRFUTURES DIARIES & DATA: Indian Data Watch ECONIN European diary WEU/EQTY2 Indian diary IN/DIARY US Diary US/DIARY (Editing by Prateek Chatterjee) ((swati.bhat@thomsonreuters.com; +91-22-61807353; Reuters Messaging: swati.bhat.thomsonreuters.com@reuters.net)) Keywords: MARKETS INDIA FOREX/

SNAPSHOT-India stocks, bonds, rupee, swaps, call at close

August 20, 2014 - reuters.com

STOCKS .BSESN .NSEI ----------------------- The benchmark BSE index ended down 0.4 percent and the broader NSE index 0.28 percent lower, unable to sustain a rally after hitting a third consecutive record high earlier in session as investors took profits in blue-chips such as Oil and Natural Gas Corp. .BO GOVERNMENT BONDS IN084024G=CC -------------------------------- India's 10-year bond yield ended down 5 basis points at 8.48 percent on speculation that foreign portfolio investors were active buyers, especially in 5-8 year debt, suggesting an improvement in the global risk appetite and a positive outlook on local bonds. IN/ RUPEE INR=D2 -------------- The partially convertible rupee ended near a three-week high of 60.61/62 per dollar against its previous close of 60.6750/6850, on the back of strong foreign investor buying in the debt market, although greenback demand from importers and a fall in shares limited further gains. INR/ INTEREST RATE SWAPS INROIS MIOIS= ------------------------------------- The benchmark five-year swap rate closed unchanged at 8.04 percent. The one-year rate ended 1 bp higher at 8.46 percent. CALL MONEY INROND= --------------------- India's cash rate ended unchanged at 7.00/7.10 percent. ---------------------- Double click on codes in <> Reuters MIOR/MIBOR MIBR= NSE MIBID/MIBOR MIBR=NS Reuters Corporate Bond Yield/Spread 0#AAAINBMK= For Reuters Benchmarks IN/BENCH (Compiled by Dipika Lalwani) ((dipika.lalwani@thomsonreuters.com; +91-22-61807098; Reuters Messaging: dipika.lalwani.thomsonreuters.com@reuters.net)) Keywords: INDIA SNAPSHOT/

FOREX-Dollar breaks out to 11-month highs, eyes on Fed

August 20, 2014 - reuters.com

* Dollar breaks out of August range * All eyes on Fed minutes, Jackson Hole speeches * Trade-weighted index at 11-month high, euro falls below $1.33 * Sterling propped up by central bankers favouring rate rise (Updates prices, adds more comment) By Patrick Graham WARSAW, Aug 20 (Reuters) - The dollar jumped on Wednesday to its highest levels against the euro and a basket of major currencies since last September, returning to gains after a shaky start to August that called into question its broader strength. Two days of upbeat signals on the domestic housing market have been enough to put the U.S. currency back on track and it has now gained some 7 cents, or just under 5 percent, against the euro since early May. That again encouraged speculation that the longer-term rally predicted at the start of this year by some of the biggest investment houses may finally be under way as monetary policy in Europe and the United States heads in opposite directions. The greenback broke through resistance around $1.3300 and last November's high of $1.3295 per euro to trade as high as $1.3275 in morning trade in Europe. It also climbed to a 4 1/2-month high against the yen. The only resistance came from sterling, propped up after a rough couple of weeks by minutes that showed Bank of England policymakers had broken ranks over interest rates for the first time in three years, with two of them unexpectedly voting to tighten policy. ID:nL5N0QQ1OD "The dollar can retain its bid tone into the end of the week," said Stephen Gallo, a strategist with Canadian bank BMO in London, pointing to rising U.S. housing starts on Tuesday and steady US bond yields this week. The dollar index .DXY =USD rose as high as 82.118, its highest since September. It last stood at 82.081, up a quarter of a percent on the day. The yen slid 0.4 percent to 103.33 yen per dollar and the New Zealand dollar fell below support at levels near $0.8400 to its lowest in more than five months. The dollar has been helped by a recovery in U.S. 10-year Treasury yields this week. They were last at 2.407 percent US10YT=RR , compared with a 14-month low of 2.303 percent last Friday. EURO WEAKNESS Some market participants said the dollar's rise had more to do with weakness in other major currencies. Sterling rebounded from four-month lows against the dollar after the Bank of England minutes showed both Martin Weale and Ian McCafferty voted to start raising interest rates in August. "It was clearly a relief to get a signal like this morning's for the pound. It has relieved the pressure," said a dealer with one London bank. "That said, I think the past month's action has blown a hole in sterling's prospects. I think most people think the rally we saw in the past year has topped out." Sterling gained 0.2 percent against the dollar at $1.6649 and as much as half a percent against the euro at 79.775 pence per euro in response. The single currency, already undermined by a struggling euro zone economy, has suffered from growing signs this month that sanctions between the West and Russia will hurt growth more in Europe more than in the United States. Most analysts have cast this week as a pause, waiting for the next signal from the U.S. Federal Reserve on how close it is to raising interest rates next year, at a time when the European Central Bank is under pressure to ease policy further. Minutes of the Fed's July policy meeting are due later on Wednesday, but a bigger focal point may be Fed Chair Janet Yellen's speech on Friday at an annual gathering of central bankers in Jackson Hole, Wyoming. "Our economists expect an overall dovish theme to persist but are wary that a softening in the disinflationary rhetoric might be in the offing given recent comments from FOMC members," RBC Capital Markets' Michael Turner said in a morning note. "The main game for Fed communications remains the upcoming Jackson Hole gathering." (Editing by Crispian Balmer) ((patrick.graham@thomsonreuters.com)(+44207 542 9429)(patrick.graham.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

UPDATE 2-France's Hollande says to speed up reforms, ease tax on poorest

August 20, 2014 - reuters.com

* Hollande confirms tax breaks for poorer households * Seeks to boost homebuilding to create jobs, help growth * Sticks to policy based on tax cuts for businesses, spending cuts * Asks EU to do more for growth, weaken euro currency (Adds details) By Ingrid Melander PARIS, Aug 20 (Reuters) - French President Francois Hollande said on Wednesday he would accelerate reforms while at the same time giving tax breaks to poorer households as he tries to win back confidence from voters who do not trust he can lift the country out of stagnation. The most unpopular French president in modern history has come under growing fire from both the opposition and some ruling Socialist party lawmakers over his economic policy after his government abandoned growth and fiscal targets last week. As he prepares for tough negotiations on the 2015 budget both at home and with France's EU partners, Hollande sought in an interview with Le Monde to explain that he would work on both fronts: reform France and help low-income households. "It is not because the situation is difficult in France and in Europe that we should give up. On the contrary, we need to go faster and further," he said in the interview. "I want to accelerate reforms to boost growth as fast as possible," he said, starting with home construction. He gave no concrete details beyond saying the plan would tackle taxation, regulatory and financing issues for construction. Housing has become a major headache for the government, with housing starts in France down to a 16-year low - a serious drag on the economy. Property developers blame the problem partly on regulations that took effect this year to set rent limits in cities with more than 50,000 people. ID:nL6N0O651T Hollande also confirmed that the government would reform welfare benefits and income tax rules to give poorer households a tax break on a similar scale to one struck down by the constitutional court earlier this month. The initial plan had been to bring lower-paid workers 2.5 billion euros ($3.33 billion) in payroll tax cuts next year. The government had also promised to extend a rebate of just over 1 billion euros in income tax paid by poorer households. ID:nL6N0QC60O An Ifop opinion poll showed over the weekend that 85 percent of voters do not think the government can cut record-high unemployment and only 16 percent believe it can boost growth. CUT RED TAPE While Hollande insisted in the interview on steps to help low-income households, he also said the government would not change its supply-side economic policy, which is based on much bigger tax cuts for businesses and ignored calls from rebel Socialist lawmakers who have asked him to change course. Taking a more pro-business turn to seek to lift the country out of stagnation, the government pledged earlier this year some 40 billion euros in tax cuts for businesses over the next few years and 50 billion euros in public spending cuts. The Socialist president also confirmed the government would come up in September with a plan to open up closed professions such as pharmacists and notaries. This is a long-standing demand from Brussels and one the government hopes will help convince its EU peers it is carrying out structural reforms - a key condition to win more reprieve on EU fiscal targets. That bill will also "adapt" a general ban on Sunday shop openings, Hollande said, another effort to cut red tape and a move long demanded by business leaders. Finance Minister Michel Sapin said last week that the lack of economic growth and weaker-than-expected inflation meant the public deficit would come in higher than expected this year and hinted Paris would also fail to bring its deficit under the EU's 3-percent-of-GDP cap next year. France needs to submit its draft budget plan to the European Commission by mid-October for review. The EU executive can send it back for rewriting if it is not satisfied. Paris also potentially risks sanctions from its EU peers if it misses the bloc's deficit target again next year. They could, though, give France yet another reprieve like the one they gave the country in 2013. Hollande reiterated French calls for the European Union and its central bank to do more to boost growth through investments and weaken the euro, which he said was still overvalued. (1 US dollar = 0.7517 euro) (Reporting by Ingrid Melander; Editing by Andrew Callus and Toby Chopra) ((ingrid.melander@thomsonreuters.com; +33149495071; Reuters Messaging: ingrid.melander.reuters.com@reuters.net)) Keywords: FRANCE ECONOMY/HOLLANDE

PRESS DIGEST- Canada - Aug 20

August 20, 2014 - reuters.com

Aug 20 (Reuters) - The following are the top stories from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy. THE GLOBE AND MAIL * The fallout from the Mount Polley spill has reached other mines in British Columbia. The province has suspended the environmental assessment of the proposed Morrison copper and gold mine, pending the final report into Mount Polley. A review is also under way at the Red Chris mine, owned by Imperial Metals Corporation - which also owns the Mount Polley mine. (http://bit.ly/1oYMnK6) * Winnipeg's Red River has become ground zero in the ongoing fight for a national inquiry into Canada's missing and murdered aboriginal women, its muddy waters the site of a grim discovery by police divers who were actually looking for another person's body when they happened upon the remains of Tina Fontaine. (http://bit.ly/1rWQ1aQ) Reports in the business section: * Industry Canada said it will hold a consultation on the future of a band of airwaves used for rural Internet access and reiterated a commitment it made last year to force telecommunications providers to "use it or lose it" when it comes to spectrum licenses. The department added that it hopes to re-purpose some of that band of spectrum for cellular use in urban areas. That has left New Brunswick-based Xplornet Communications Inc, one major provider of rural Internet services, worried about the impact on its customers. (http://bit.ly/YyautZ) NATIONAL POST * The Royal Canadian Mounted Police is investigating two more men with suspected ties to Calgary who allegedly left Canada to participate in the Syrian civil war, according to community members. Both men are from Windsor, Ontario, but are believed to have spent time in Calgary, where counter-terrorism investigators have been asking questions about at least ten jihadist recruits. (http://bit.ly/1qoY91N) * Mayor Rob Ford says if re-elected, he will move to reduce crowding on buses and streetcars and establish new express bus routes without adding to the ranks of the Toronto Transit Commision. (http://bit.ly/1qp0dH3) FINANCIAL POST * Hedge funds, mostly American, seem to have their fingerprints all over the Canadian oil patch these days. Orange Capital LLC emerged on Tuesday as the latest to take a position in a Canadian oil and gas company. The New York-based fund has built a 5.3 percent stake in Calgary-based Bellatrix Exploration Ltd BXE.TO since July 2, according to regulatory filings.(http://bit.ly/1ocB94z) * Toronto startup Vantage Analytics has raised C$1.1 million in its first round of funding from Real Ventures and a number of angels with e-commerce and retail expertise. (http://bit.ly/1rWWyCm) (Compiled by Rishika Sadam in Bangalore) ((Rishika.S@thomsonreuters.com;)(within U.S. +1 646 223 8780, outside U.S. +91 80 6749 6997)(;)(Reuters Messaging: rishika.s.thomsonreuters.com@reuters.net)) Keywords: PRESS DIGEST CANADA/

London platinum/palladium 0945 fix - Aug 20

August 20, 2014 - reuters.com

INDICATORS - Kazakhstan - Aug 20

August 20, 2014 - reuters.com

UPDATE 1-Silver miner Hochschild's adjusted core profit up on cost cuts

August 20, 2014 - reuters.com

(Adds details, share movement) Aug 20 (Reuters) - Silver miner Hochschild Mining Plc HOCM.L reported a 4 percent rise in first-half adjusted core earnings, helped by its aggressive cost-cutting programme and increased output from its mines in Peru and Argentina. Hochschild's adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $94.3 million, from $90.4 million a year earlier. Net revenue fell 8.6 percent to $282 million for the six months ended June 30. ID:nRST5678Pa The miner, which cancelled dividend payments until its financial situation improves, said the capital required to bring its flagship Inmaculada gold and silver project in southern Peru to production restricted payment of an interim dividend. Hochschild, which has been battling rising costs and falling precious metal prices, backed its production target for the year and said the Inmaculada project is set to be commissioned at the end of the year. Attributable silver equivalent production from the company's three underground mines in Peru and Argentina for the period rose 3 percent to 11.85 million pounds, Hochschild said in July. ID:nL4N0PR20D Hochschild's shares rose 1.7 percent to 162.7 pence in early trade on the London Stock Exchange. (Reporting by Abhiram Nandakumar in Bangalore; Editing by Gopakumar Warrier) ((abhiram.nandakumar@thomsonreuters.com)(within UK +44 20 7542 1810)(outside UK +91 80 6749 1136)(Reuters Messaging: abhiram.nandakumar.thomsonreuters.com@reuters.net)) Keywords: HOCHSCHILD MIN RESULTS/

CORRECTED-Silver miner Hochschild's adjusted core profit rises

August 20, 2014 - reuters.com

(Corrects paragraph 2 to say adjusted EBITDA rose, not fell) Aug 20 (Reuters) - Precious metals miner Hochschild Mining Plc HOCM.L reported a 4 percent rise in first-half adjusted core earnings, helped by its aggressive cost-cutting programme and increased output from its assets in Peru and Argentina. Hochschild's adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $94.3 million, from $90.4 million a year earlier. Net revenue for the six months ended June 30 fell 8.6 percent to $282 million. ID:nRST5678Pa (Reporting by Abhiram Nandakumar in Bangalore; Editing by Gopakumar Warrier) ((abhiram.nandakumar@thomsonreuters.com)(within UK +44 20 7542 1810)(outside UK +91 80 6749 1136)(Reuters Messaging: abhiram.nandakumar.thomsonreuters.com@reuters.net)) Keywords: HOCHSCHILD MIN RESULTS/

MIDEAST STOCKS - Factors to watch - August 20

August 20, 2014 - reuters.com

DUBAI, Aug 20 (Reuters) - Here are some factors that may affect Middle East stock markets on Wednesday. Reuters has not verified the press reports and does not vouch of their accuracy. INTERNATIONAL/REGIONAL * GLOBAL MARKETS-Asian stocks steady on strong US data, dollar holds gains MKTS/GLOB * U.S. crude sinks for second day ahead of contract expiry O/R * Gold struggles below $1,300 on strong U.S. data, higher stocks RTRS-GOL * MIDEAST STOCKS-Egypt's property stocks lead Cairo rebound; Dubai up MEAST-STX * Islamic State video purports to show beheading of U.S. journalist IQ-SECUR * Gaza truce collapses, fighting erupts, Israel orders negotiators home PS-IL * Germany to decide this week on arming Iraq's Kurds -minister DE-IQ-SECUR * Libya NOC loads 1st oil in a year from Es Sider port LY-OILG * Algeria arrests 200 Syrian would-be migrants near Libyan border DZ-SY * Capacity set to double on Iraqi Kurdistan's oil pipeline - sources IQ-OILG * U.N. launching major aid operation for half a million in northern Iraq UN1-IQ TURKEY * Turkish president Gul tips FM Davutoglu to be next prime minister TR-POL * Turkish shipbuilder Karadeniz to send floating power station to Gaza TR-PS-PWR * Dozens more Turkish police detained as wiretapping probe widens TR-JUDIC * Turkish banking association sees sector's profit flat this year TR-BANK * Turkish stocks rise, lira steady as new government eyed TR-STX EGYPT * Egypt urges U.S. restraint over Missouri unrest EG-US-DIP * Egypt awards ambitious Suez project to army-linked Gulf firm EG-BH-CONS * Egypt's FIHC passes in 25,000 T soyoil tender- trade EG-SOIL UNITED ARAB EMIRATES * Standard Chartered to pay $300 mln for oversight shortfalls STAN.L * Dubai Duty Free reprices $1.75 bln loan for second time AE-DBTR * Abu Dhabi's FGB hires former NBAD banker to lead corp fin advisory services FGB.AD NBAD.AD * Dubai creates new fund class to lure asset managers AE-FUND * UAE's NMC Health lifts profit 27 pct on higher occupancy NMC.L SAUDI ARABIA * Saudi court sentences one to death, 30 to jail for militant attacks SA-JUDIC * Saudi Arabia's Grand Mufti denounces Iraq's Islamic State group SA-IQ * Saudis to impose 20 pct foreign ownership limit on stocks -paper SA-STX-REGS KUWAIT * National Bank of Kuwait appoints Nasser al-Sayer chairman NBKK.KW * Saudi's Savola says had initial talks with Americana shareholder 2050.SE FOOD.KW QATAR * Al Jazeera rejects allegations from Al Gore on Current TV deal QA-MDIA (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS

India Morning Call-Global Markets

August 20, 2014 - reuters.com

EQUITIES NEW YORK - U.S. stocks ended higher for the second straight session on Tuesday, as robust housing data and strong earnings from Dow component Home Depot overshadowed lingering concerns about the conflict in Ukraine. The Dow Jones industrial average .DJI rose 80.85 points, or 0.48 percent, to close at 16,919.59. The S&P 500 .SPX gained 9.86 points, or 0.50 percent, to end at 1,981.60. The Nasdaq Composite .IXIC added 19.20 points, or 0.43 percent, to finish at 4,527.51, its highest close since March 31, 2000. For a full report, click on .N - - - - LONDON - Britain's top share index climbed to its highest closing level in three weeks on Tuesday, bolstered by housebuilding stocks after robust results from Persimmon PSN.L . The UK blue-chip FTSE 100 index .FTSE ended up 38.06 points, or 0.6 percent, at 6,779.31 points, its highest close since July 29. For a full report, click on .L - - - - TOKYO - Japan's Nikkei share average rose for an eighth day on Wednesday morning as the yen weakened, but gains were subdued as many investors stuck to the sidelines ahead of the U.S. Federal Reserve's annual meeting starting on Thursday. The Nikkei .N225 rose 0.2 percent to 15,478.72 in mid-morning trade, refreshing a new two-week high. For a full report, click on .T - - - - HONG KONG - Hang Seng Index .HSI set to open up 0.1 percent. For a full report, click on .HK - - - - FOREIGN EXCHANGE SYDNEY - The dollar held firm near 11-month high against a basket of major currencies on Wednesday after strong U.S. housing data added to hopes of a firming recovery in the world's biggest economy. The dollar index <.DXY =USD> stood at 81.870, having risen to 81.899 in the previous session, its highest level since September. For a full report, click on USD/ - - - - TREASURIES NEW YORK - U.S. Treasury yields rose on Tuesday after unexpectedly strong housing data but only a modest increase in consumer inflation for July, pushing them up from last week's 14-month lows. Benchmark 10-year U.S. Treasury notes US10YT=RR fell in late morning trade and held steady through the day with a loss of 4/32 of a point in price and a yield of 2.40 percent. Prior to the data, the 10-year was up roughly a quarter of a point. For a full report, click on US/ - - - - COMMODITIES GOLD SINGAPORE - Gold was stuck firmly below $1,300 an ounce on Wednesday and looked likely to extend losses to a fourth session as strong U.S. economic data bolstered stock markets, dimming bullion's appeal as a safe haven. Spot gold XAU= had slipped about 70 cents to $1,294.60 an ounce by 0026 GMT, after dropping 1.3 percent in the last three sessions. U.S. gold GCcv1 was steady at $1,296. For a full report, click on GOL/ - - - - BASE METALS SYDNEY - Shanghai copper dropped towards a major level of support in overnight trade on Wednesday, a break of which could trigger a downleg in prices given forecasts of improving supply. The most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 slipped by 0.4 percent to 49,000 yuan($7,979) a tonne in early trade on Wednesday. For a full report, click on MET/L - - - - OIL NEW YORK - U.S. crude oil dropped nearly $2 on Tuesday, falling for a second straight day as a rush of selling ahead of the session close brought the contract to its lowest price since January. Brent crude oil for delivery in October LCOc1 fell 4 cents to settle at $101.56 a barrel, after falling to $101.07, the lowest since June 2013, the same month Brent prices were last below $100 a barrel. For a full report, click on O/R (Compiled by Indulal PM) ((indulal.p@thomsonreuters.com; +91-22-6180-7183; Reuters Messaging: indulal.p.thomsonreuters.com@reuters.net)) Keywords: MORNINGCALL INDIA

GLOBAL MARKETS-Wall St joins global stocks rally; dollar ahead

August 19, 2014 - reuters.com

* Wall St boosted by Home Depot results, housing data * Dollar jumps as euro dips to 9-month low * Oil at 14-month low (Adds late, closing prices, quotes) By Michael Connor NEW YORK, Aug 19 (Reuters) - Wall Street got a lift from the U.S. housing sector and extended a global stock markets rally on Tuesday as investors shifted focus from political crises to expectations monetary policy will remain accommodative. The dollar climbed smartly as the euro sank to a nine-month low against the greenback. U.S. Treasuries yields rose. Bolstered by strong profits from home-improvement retailer Home Depot HD.N , as well as U.S. housing and economic data, Wall Street gained as equities worldwide neared multi-year highs after the past month's jitters over conflicts in Ukraine, Iraq and Gaza. ID:nL5N0QP0YL ID:nL5N0QP0AU] The Dow Jones industrial average .DJI rose 80.85 points, or 0.48 percent, to 16,919.59, the S&P 500 .SPX gained 9.86 points, or 0.5 percent, to 1,981.6 and the Nasdaq Composite .IXIC added 19.20 points, or 0.43 percent, to 4,527.51. "The market has enjoyed a retreat from geopolitical tensions, and we're seeing sectors that we were concerned about lagging, like housing and consumer discretionary, gaining, which is positive," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. Apple Inc AAPL.O hit $100 for the first time since its seven-for-one stock split in June, giving the iPhone maker a market capitalization over $600 billion. It ended at $100.53 for the day, up $1.37. The MSCI All Country Index .MIWD00000PUS was up 0.46 percent at 428.37. The FTSEurofirst 300 .FTEU3 index of top European shares ended up 0.57 percent, led by gains in Germany, where the blue-chip DAX index .GDAXI was up just under 1 percent. Traders were encouraged by economic news while on alert for central banker comments for indications of interest rate moves after years of rock-bottom benchmark borrowing rates. The dollar rallied, benefiting from U.S. economic data and the euro zone's current account surplus in June. The euro dipped to a nine-month low of $1.3314. The U.S. dollar index .DXY rose 0.37 percent to a high last seen nearly a year ago. U.S. housing starts rebounded strongly in July, pointing to economic momentum. Groundbreaking surged 15.7 percent last month to a seasonally adjusted 1.09 million annual unit pace, after two straight months of declines. Separately, the Labor Department said its U.S. Consumer Price Index edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June. ID:nL2N0QP0KI The benign inflation data gave Treasuries prices a fleeting boost. Benchmark 10-year Treasuries US10YT=RR fell 4/32 of a point in price to yield of 2.40 percent. The 30-year bond US30YT=RR dropped 10/32 of a point in price, pushing the yield up to 3.21 percent. U.S. crude oil CLc1 and Brent crude futures LCOc1 dropped after giving up early gains as recovering Libyan output, sustained Iraqi production and weak demand offset concerns about threats to supply. Brent touched 14-month lows at $101.17, but traded late off just 4 cents at $101.56. U.S. crude finished at $94.48, down 2 percent. Investors looked ahead to Wednesday, when the Federal Reserve releases minutes from the July 29-30 Fed policymaking meeting, as well as Fed Chair Janet Yellen's speech on Friday at a gathering of central bankers in Jackson Hole, Wyoming. "In the minutes, people will be looking for an exit strategy, but given data we have had, no one is expecting it to come sooner than previously expected. Fed futures are looking to September 2015 and expectations in the market come around that time frame, which is late 2015," said Thomas Simons, money market economist at Jefferies LLC in New York. (Reporting by Michael Connor; additional reporting by Daniel Bases, Sam Forgione and Chuck Mikolajczak in New York; Editing by Dan Grebler) ((michael.connor@thomsonreuters.com; 646 223 6309; Reuters Messaging: michael.connor.reuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

GLOBAL MARKETS-Wall St adds to global stocks rally; dollar up

August 19, 2014 - reuters.com

* Wall St boosted by Home Depot results, housing data * Dollar jumps as euro dips to 9-month low * Oil at 14-month low (Adds Treasuries decline, updates prices) By Michael Connor NEW YORK, Aug 19 (Reuters) - Wall Street got a lift from the U.S. housing sector and extended a global stock markets rally on Tuesday as investors shifted focus from political crises to expectations monetary policy likely will remain accommodative. The dollar climbed smartly as the euro sank to a nine-month low against the greenback. U.S. Treasuries yields edged up. Bolstered by strong profits from home-improvement retailerHome Depot HD.N , as well as U.S. housing and economic data, Wall Street gained as equities worldwide neared multi-year highs after the past month's jitters over conflicts in Ukraine, Iraq and Gaza. ID:nL5N0QP0YL ID:nL5N0QP0AU] The Dow Jones industrial average .DJI rose 74.31 points, or 0.44 percent, at 16,913.05. The Standard & Poor's 500 Index .SPX was up 8.56 points, or 0.43 percent, at 1,980.30. The Nasdaq Composite Index .IXIC was up 15.26 points, or 0.34 percent, at 4,523.57. Apple Inc AAPL.O hit $100 for the first time since its seven-for-one stock split in June, giving the iPhone maker a market capitalization over $600 billion. The MSCI All Country Index .MIWD00000PUS was up 0.40 percent at 428.12. The FTSEurofirst 300 .FTEU3 index of top European shares ended up 0.57 percent, led by gains in Germany, where the blue-chip DAX index .GDAXI was up just under 1 percent. Traders were keeping a wary watch on economic data and central banker comments for indications of interest rate moves after years of rock-bottom benchmark borrowing rates. "The situation in Ukraine is still very tense, but slowly investors are getting used to it and turning their focus back on the macro and micro data, and earnings have been quite good," said Arnaud Scarpaci, fund manager at Montaigne Capital. The dollar rallied, benefiting from U.S. economic data and the euro zone's current account surplus in June. The euro dipped to a nine-month low of $1.3314. The U.S. dollar index .DXY rose 0.37 percent to a high last seen nearly a year ago. U.S. housing starts rebounded strongly in July, pointing to economic momentum. Groundbreaking surged 15.7 percent last month to a seasonally adjusted 1.09 million annual unit pace, after two straight months of declines. Separately, the Labor Department said its U.S. Consumer Price Index edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June. ID:nL2N0QP0KI The benign inflation data gave Treasuries prices a boost that then petered out and left prices off or unchanged in early-afternoon New York trade. The bellwether 10-year note US10YT=RR was off 3/32 in price and yielding 2.398 percent. German 10-year bund yields DE10YT=TWEB hovered near 1.0 percent, just above record lows hit at the end of last week, while yields on lower-rated bonds dipped. U.S. crude oil CLc1 and Brent crude futures LCOc1 were down after giving up early gains as recovering Libyan output, sustained Iraqi production and weak demand offset concerns about threats to supply. Brent was at 14-month lows at $101.35, off 25 cents. U.S. crude was last at $95.89, down 52 cents. Investors were looking ahead to Wednesday, when the Federal Reserve releases minutes from the July 29-30 Fed policymaking meeting, as well as Fed Chair Janet Yellen's speech at a gathering of central bankers in Jackson Hole, Wyoming on Friday. "In the minutes, people will be looking for an exit strategy, but given data we have had, no one is expecting it to come sooner than previously expected. Fed futures are looking to September 2015 and expectations in the market come around that time frame, which is late 2015," said Thomas Simons, money market economist at Jefferies LLC in New York. (Reporting by Michael Connor; additional reporting by Daniel Bases, Sam Forgione and Chuck Mikolajczak in New York; Editing by Dan Grebler) ((michael.connor@thomsonreuters.com; 646 223 6309; Reuters Messaging: michael.connor.reuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

GLOBAL MARKETS-Wall St extends global stocks rally; dollar up

August 19, 2014 - reuters.com

* Wall St boosted by Home Depot results, housing data * Treasuries turn flat * Dollar jumps as euro dips to 9-month low (Adds New York opening, updates prices; changes dateline; previous LONDON) By Michael Connor NEW YORK, Aug 19 (Reuters) - Global stock markets rose on Tuesday as investors turned bolder on signs the Ukraine crisis was easing and monetary policy appeared likely to remain accommodative. The dollar climbed smartly as the euro sank to a nine-month low against the dollar. U.S. Treasuries yields fell. Bolstered by strong profits from retailer Home Depot HD.N and improved U.S. housing and economic data, Wall Street gained as equities worldwide traded near multi-year highs despite the past month's jitters over conflicts in Ukraine, Iraq and Gaza. ID:nL5N0QP0YL ID:nL5N0QP34E The Dow Jones industrial average .DJI was up 57.5 points, or 0.34 percent, to 16,896.24, the S&P 500 .SPX gained 6.67 points, or 0.34 percent, to 1,978.41 and the Nasdaq Composite .IXIC added 9.65 points, or 0.21 percent, to 4,517.96. The MSCI All Country Index .MIWD00000PUS was up 0.35 percent at 427.89. The FTSEurofirst 300 .FTEU3 index of top European shares was up 0.55 percent, led by gains in Germany, where the blue-chip DAX index was up 1 percent. Traders were keeping a wary watch on economic data and central banker comments for indications of interest rate moves after years of rock-bottom benchmark borrowing rates. "The situation in Ukraine is still very tense, but slowly investors are getting used to it and turning their focus back on the macro and micro data, and earnings have been quite good," said Arnaud Scarpaci, fund manager at Montaigne Capital. The dollar rallied, benefiting from U.S. economic data and the euro zone's current account surplus in June. The euro dipped to a nine-month low of $1.3314. The U.S. dollar index .DXY rose 0.33 percent to a high last seen nearly a year ago. U.S. housing starts rebounded strongly in July, pointing to economic momentum, according to U.S. officials. Groundbreaking surged 15.7 percent last month to a seasonally adjusted 1.09 million annual unit pace, after two straight months of declines. Separately, the Labor Department said its U.S. Consumer Price Index edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June. ID:nL2N0QP0KI The benign inflation data gave Treasuries prices a boost that then petered out and left prices mostly unchanged in late-morning New York trade. The bellwether 10-year note US10YT=RR was flat and yielding 2.387 percent. German 10-year bund yields DE10YT=TWEB were hovering near 1.0 percent, just above record lows hit at the end of last week, while yields on lower-rated bonds dipped. U.S. crude oil CLc1 and Brent crude futures LCOc1 were down. Brent was near 14-month lows at $101.48, off 12 cents. U.S. crude was last at $96.03, down 38 cents. (Reporting by Michael Connor; Editing by Dan Grebler) ((michael.connor@thomsonreuters.com; 646 223 6309; Reuters Messaging: michael.connor.reuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

London platinum/palladium 1400 fix - Aug 19

August 19, 2014 - reuters.com

ECB balance sheet shrinks in week to Aug. 15

August 19, 2014 - reuters.com

FRANKFURT, Aug 19 (Reuters) - The balance sheet of the European Central Bank and the euro zone's national central banks contracted by 2.083 billion euros to 2.023 trillion euros in the week that ended on Aug. 15, the ECB said on Tuesday. The contraction came as banks repaid long-term loans to the central bank. Gold reserves were unchanged at 334.432 billion euros. Net foreign exchange reserves in the Eurosystem of central banks decreased by 0.1 billion euros to 213.1 billion euros, the ECB added. (Reporting by Frankfurt newsroom, editing by John Stonestreet) ((paul.carrel@thomsonreuters.com)(+49 69 7565 1313)(Reuters Messaging: Reuters Messaging: paul.carrel.thomsonreuters.com@reuters.net)) Keywords: ECB/BALANCESHEET

GLOBAL MARKETS-Stocks head higher as risk appetite returns

August 19, 2014 - reuters.com

* Europe higher, follows on from Asia, U.S. gains * Core bonds little changed, U.S. dollar up * Inflation data due out from UK, U.S. * Investors await Fed summit later this week (Updates, adds detail, background) By Lionel Laurent LONDON, Aug 19 (Reuters) - Global stocks rose and money-market rates fell to new lows on renewed investor appetite for risk on Tuesday, as investors breathed easier over the Ukraine crisis and saw monetary policy remaining accommodative. Equities are still trading broadly near multi-year highs despite the past month's jitters over geopolitical risk, with traders keeping a close eye on economic data and central-banker comments for indications of interest-rate moves after years of crisis-era rock-bottom benchmark borrowing rates. "The situation in Ukraine is still very tense, but slowly investors are getting used to it and turning their focus back on the macro and micro data, and earnings have been quite good," said Arnaud Scarpaci, fund manager at Montaigne Capital. Meanwhile, British inflation eased more than expected in July and the pace of house price growth slowed in June, according to data that underscored the Bank of England's message that it is in no rush to hike interest rates. Sterling fell to a four-month low against the U.S. dollar. ID:nL5N0QP1HM The MSCI World Index .MIWO00000PUS , which tracks stocks from developed economies, was up 0.15 percent at 1,730.01 points at 0837 GMT, compared with its all-time high of 1,765.77 points reached in July. The FTSEurofirst 300 .FTEU3 index of top European shares was up 0.34 percent, led by gains in Germany, where the blue-chip DAX index was up 0.8 percent. The index, which is traded as a proxy for the Ukraine crisis given Germany's strong trade ties with Russia, is down some 7 percent from its June highs. Ukrainian government forces have been fighting separatists for four months in the Russian-speaking east of Ukraine. A reported attack on a Russian convoy on Friday had sparked fears of Russian retaliation but none emerged. European trading followed on from gains in Asia and Wall Street, where U.S. equities rose to their highest level since late July and the U.S. dollar index .DXY edged back toward an 11-month high after upbeat housing data. ID:nZXN0R8U2I Emerging markets also benefited, with the MSCI Emerging Market index .MSCIEF up 0.5 percent. German 10-year bund yields DE10YT=TWEB were unchanged at 1.0 percent, just above record lows hit at the end of last week, while yields on lower rated bonds dipped. The ECB has already taken measures to keep borrowing costs low and ensure the euro zone banking system has ample spare cash, with new four-year loans (TLTROs) set to become available to banks from September. But strategists say current market prices are starting to price in further policy easing ahead. The current environment is prompting companies to return cash to shareholders: Shares of Danish shipping company Moeller Maersk MAERSKa.CO MAERSKb.CO were up more than 4 percent after announcing its first buyback programme in its 110-year history, while Nestle NESN.VX has also unveiled a buyback. Later in the week, investors will be keeping a close eye on Wednesday's release of minutes from the Federal Reserve's July policy meeting as well as comments from the Fed's summit in Jackson Hole, Wyoming, which starts on Thursday. A rally in July spurred hopes the dollar was ready for a push higher, long predicted by many of the biggest investment houses, but on which it has consistently failed to deliver over the past year. That casts the steadying of the euro and other currencies so far this month as just a hiccup, but opinion in the market is divided. "We're back in this zone really where it could go either way," said a dealer with one London bank. "The data over the next couple of days, and (Fed Chair Janet) Yellen's appearance, could be the key to breaking us out of this range, but we have been here before. This year's model is range-trading." U.S. crude oil CLc1 and Brent crude futures LCOc1 were slightly higher, respectively up 0.4 percent and 0.2 percent. (Reporting by Lionel Laurent; Additional reporting by Blaise Robinson, Anirban Nag, John Geddie, Chris Vellacott and Patrick Graham; Editing by Andrew Heavens) ((lionel.laurent@thomsonreuters.com; +44 207 542 9746; Reuters Messaging: lionel.laurent.thomsonreuters.com@reuters.net)) Keywords: MARKETS GLOBAL/WRAPUP 5

Harmony Gold to shutter unprofitable shaft, possible job cuts

August 19, 2014 - reuters.com

JOHANNESBURG, Aug 19 (Reuters) - South African bullion producer Harmony Gold HARJ.J said on Tuesday it will temporarily close its Target 3 shaft because it is bleeding money, a move that could affect up to 1,500 jobs. Job cuts are a sensitive issue in South Africa, where close to a quarter of the workforce is unemployed and labour tensions are raw, especially in the mining sector which has been hit by a wave of often violent strikes the past three years. Harmony said it would take measures to minimise and try to prevent job losses because of the placing of the operation on "care and maintenance", which means it will be closed for an indefinite period of time. "Despite numerous initiatives by both management and organised labour to return Target 3 to profitability, this operation has continued to record cash flow losses," Harmony said in a statement. "Given the current gold price environment, and the significant capital investment required to sustain operations at this shaft, Target 3 is predicted to continue to make a loss in the foreseeable future," the company said. Harmony last week said it fell to a fourth-quarter loss because of a 1.4 billion rand ($132 million) write-down on an expansion project at its Phakisa operation, which was shelved because it would have required too much capital. ID:L6N0QK0H8 The company said it expected output of about 1.2 million ounces of gold in its 2015 financial year after producing 1.17 million ounces last year. (1 US dollar = 10.6168 South African rand) (Reporting by Peroshni Govender; Editing by Ed Stoddard) ((peroshni.govender@thomsonreuters.com; +27-11-775-3126; Reuters Messaging: peroshni.govender@thomsonreuters.com)) Keywords: HARMONY GOLD MNG EMPLOYMENT/

London platinum/palladium 0945 fix - Aug 19

August 19, 2014 - reuters.com

GLOBAL MARKETS-Stocks head higher as risk appetite returns

August 19, 2014 - reuters.com

* Europe higher, follows on from Asia, U.S. gains * Core bonds little changed, U.S. dollar up * Inflation data due out from UK, U.S. * Investors await Fed summit later this week By Lionel Laurent LONDON, Aug 19 (Reuters) - Global stocks rose and core bonds barely moved on renewed investor appetite for risk on Tuesday, driven by a lack of escalation of the Ukraine crisis and upbeat U.S. housing data that buoyed Asian and European markets. "The situation in Ukraine is still very tense, but slowly investors are getting used to it and turning their focus back on the macro and micro data, and earnings have been quite good," said Arnaud Scarpaci, fund manager at Montaigne Capital Equities are still trading broadly near multi-year highs despite the past month's jitters over geopolitical risk, with investors keeping a close eye on economic data and central-banker comments for indications of interest-rate moves after years of crisis-era rock-bottom benchmark borrowing rates. Closely watched inflation data for July from the UK and U.S. were due later on Tuesday. The MSCI World Index .MIWO00000PUS , which tracks stocks from developed economies, was up 0.17 percent at 1,730.33 points at 0837 GMT, compared with its all-time high of 1,765.77 points reached in July. The FTSEurofirst 300 .FTEU3 index of top European shares was up 0.43 percent, led by gains in Germany, where the blue-chip DAX index was up 1.0 percent. The index, which is traded as a proxy for the Ukraine crisis given Germany's strong trade ties with Russia, is down some 7 percent from its June highs. Ukrainian government forces have been fighting separatists for four months in the Russian-speaking east of Ukraine. A reported attack on a Russian convoy on Friday had sparked fears of Russian retaliation but the Kiev military has since reported new successes after raising the national flag in Luhansk, previously a stronghold of the rebels. European trading followed on from gains in Asia and Wall Street, where U.S. equities rose to their highest level since late July and the U.S. dollar index .DXY edged back toward an 11-month high after upbeat housing data. ID:nZXN0R8U2I Emerging markets also benefited, with the MSCI Emerging Market index .MSCIEF up 0.5 percent. German 10-year bund yields DE10YT=TWEB were unchanged at 1.01 percent, just above record lows hit at the end of last week, while yields on lower rated bonds dipped. Spanish and Italian equivalents dipped 2 basis points to 2.33 and 2.62 percent, respectively, while Portugal's dropped 4 bps to 3.47 percent. Greek equivalents were unchanged at 5.92 percent. Later in the week, investors will be keeping a close eye on Wednesday's release of minutes from the Federal Reserve's July policy meeting as well as comments from the Fed's summit in Jackson Hole, Wyoming, which starts on Thursday. A rally in July spurred hopes the dollar was ready for a push higher, long predicted by many of the biggest investment houses, but on which it has consistently failed to deliver over the past year. That casts the steadying of the euro and other currencies so far this month as just a hiccup, but opinion in the market is divided. "We're back in this zone really where it could go either way," said a dealer with one London bank. "The data over the next couple of days, and (Fed Chair Janet) Yellen's appearance, could be the key to breaking us out of this range, but we have been here before. This year's model is range-trading." U.S. crude oil CLc1 and Brent crude futures LCOc1 were slightly higher, respectively up 0.4 percent and 0.1 percent. (Reporting by Lionel Laurent; Additional reporting by Blaise Robinson, Anirban Nag, John Geddie, Chris Vellacott and Patrick Graham; Editing by Mark Trevelyan) ((lionel.laurent@thomsonreuters.com; +44 207 542 9746; Reuters Messaging: lionel.laurent.thomsonreuters.com@reuters.net)) Keywords: MARKETS GLOBAL/WRAPUP 4

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