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UPDATE 2-Brazil hikes interest rate to 6-year high despite recession fears

March 05, 2015 - reuters.com

(Recasts with central bank decision and analyst comment) By Alonso Soto BRASILIA, March 4 (Reuters) - Brazil raised interest rates on Wednesday to the highest level in six years, maintaining its aggressive pace of monetary tightening to fight inflation despite fears the economy is slipping into a deep recession. The bank's monetary policy committee, known as Copom, voted unanimously to hike the benchmark Selic rate BRCBMP=ECI by 50 basis points for the third straight time. The move was expected by an overwhelming majority of economists and traders. Brazil is one of the few major economies raising rates as BRICS peers such as China and India are loosening monetary policy to prop up economic growth. ID:nL1N0V11K4 The latest hike supports President Dilma Rousseff's drive to rein in inflation that surged to 12-year highs in mid-February. Rousseff is trying to regain the trust of investors who have soured on Latin America's largest economy, which was a Wall Street darling at the start of the decade. Repeating exactly the same statement from its last meeting on Jan. 21, the central bank gave no clear clues on whether it is planning to slow the pace of the rate-hiking cycle or continue at the current pace. Economists interpreted the terse statement as a signal that the bank will go for another steep rate increase to keep inflation at bay. "The central bank is signaling that it will keep up the pace of monetary tightening," said Andre Perfeito, economist with Gradual Investimentos. The central bank has raised rates by 175 basis points since October to curb inflation that has surged in the 12 months through mid-February to a 12-year high of 7.36 percent. (Reporting by Alonso Soto; Editing by Peter Galloway, Phil Berlowitz and Cynthia Osterman) ((alonso.soto@thomsonreuters.com; +55 61 34267027; Reuters Messaging: alonso.soto.thomsonreuters.com@reuters.net)) Keywords: BRAZIL ECONOMY/RATES

Brazil hikes interest rates to 12.75 pct to curb inflation

March 05, 2015 - reuters.com

BRASILIA, March 4 (Reuters) - Brazil's central bank raised interest rates to 12.75 percent on Wednesday, keeping up its aggressive pace of monetary tightening to control high inflation despite a sharp economic slowdown. The bank's monetary policy committee, known as Copom, voted unanimously to hike the benchmark Selic rate BRCBMP=ECI by 50 basis points for the third straight time. The move was expected by an overwhelming majority of economists and traders. (Reporting by Alonso Soto) ((alonso.soto@thomsonreuters.com; +55 61 34267027; Reuters Messaging: alonso.soto.thomsonreuters.com@reuters.net)) Keywords: BRAZIL ECONOMY/CENBANK

S.Korea short-term external debt burden falls in Q4

March 05, 2015 - reuters.com

SEOUL, March 5 (Reuters) - South Korea's ratio of short-term external debt to foreign reserves fell to 31.7 percent by the end of December from 33.3 percent three months before, marking the lowest level in nearly a decade, data showed on Thursday. Short-term external debt fell to $115.3 billion by the end of December from a revised $121.5 billion at the end of September, while foreign reserves edged down to $363.6 billion from $364.4 billion, the finance ministry data showed. The latest ratio of short-term external debt to foreign reserves was the lowest since 31.5 percent at the end of June 2005. (Reporting by Choonsik Yoo; Editing by Richard Pullin) ((choonsik.yoo@thomsonreuters.com; +822 3704 5580; Reuters Messaging: choonsik.yoo.thomsonreuters.com@reuters.net)) Keywords: SOUTHKOREA ECONOMY/DEBT

FOREX-Euro thumped as ECB looms, Aussie data in focus

March 05, 2015 - reuters.com

* Euro suffers setback ahead of ECB policy meeting * Markets awaiting details of ECB's QE program * Canadian dollar firms as BOC leaves rates steady * Australia retail sales, trade data next in focus By Ian Chua SYDNEY, March 5 (Reuters) - The euro wallowed at its lowest in over 11 years against the greenback early on Thursday, having suffered a big setback as investors waited for the European Central Bank to announce more details of its massive bond-buying program. The euro zone common currency fell as far as $1.1061 EUR= , a low not seen since September 2003, surpassing the previous trough of $1.1098 set on Jan. 26. It was last at $1.1084. It also slid to a one-month low of 132.40 yen EURJPY=R and came within a whisker of a seven-year trough against sterling. The euro last traded at 72.56 pence EURGBP=R , not far off the low near 72.35 set earlier in the week. "There was little fundamental news to explain the weakness in the euro over the past 24 hours, but downward pressure remains and the break of some key technical support areas has provoked further selling," said Brian Martin, strategist at ANZ. "Our short-term target for EUR/USD has now been achieved and a break below 1.10 would open the way for a move towards 1.05." The ECB, which starts its quantitative easing (QE), or bond-buying, program worth more than 1 trillion euros this month, is expected to detail the plan later in the day following its policy meeting. Investors have already driven yields across Europe to record lows in anticipation of the ECB's largesse, greatly widening the yield advantage of the U.S. dollar in the process. "One aspect that has drawn market concern in particular is whether the ECB will be able to source 60 billion euros of assets per month," analysts at BNP Paribas wrote in a note to clients. "We expect Draghi to reassure the markets on that front as any wavering on the total amount would be very damaging for the credibility of QE." Renewed weakness in the euro helped drive the dollar index to a fresh 11-year high of 96.059 .DXY . The dollar, however, was little changed on the yen at 119.68 yen JPY= . It also failed to gain much traction against the Australian dollar, which held its ground above 78 U.S. cents AUD=D4 . In the near term, local retail sales data due at 0030 GMT will determine the fate of the Aussie, which this week staged a rally after the Reserve Bank of Australia surprised some by not cutting interest rates. ECONAU The Bank of Canada, though, surprised no one when it too held rates steady overnight. The bank said the current level of stimulus is "still appropriate", echoing language used last week by BOC Governor Stephen Poloz. ID:nL1N0W619L The Canadian dollar firmed slightly to C$1.2407 per USD CAD=D4 but stayed well within a 1.2350/1.2700 range seen in the past month. (Editing by James Dalgleish) ((ian.chua@thomsonreuters.com; +61-2-9373-1871; Reuters Messaging: ian.chua.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

Venezuela black market rate weakens below 250 bolivars per dollar

March 04, 2015 - reuters.com

CARACAS, March 4 (Reuters) - OPEC member Venezuela's black market exchange rate weakened below 250 bolivars per dollar on Wednesday, according to a widely referenced website, as a new foreign exchange platform struggles to satiate avid demand for dollars. The bolivar has weakened 32 percent since the start of the year to fall to 255.43, according to website DolarToday, which says it publishes the black market rate based mostly on currency trades along the Colombian border. Venezuela last month opened a "free-floating" currency exchange mechanism known as Simadi which currently sells dollars for 177.7 bolivars, in a bid to drive down the black market and ease shortages of goods including toilet paper, milk, and medicines. Simadi is the weakest of a three-tiered exchange control system that also sells dollars at a preferential rate of 6.3 bolivars for imports of food and medicine and a complementary rate of around 12 bolivars for other goods. But Simadi, like its fellow systems, is suffering from a limited supply of dollars and seems to have ended up pushing Venezuelans towards the black market. "Anecdotal evidence suggests the authorities have so far been reluctant to authorize 'off-market' transactions that would validate a SIMADI rate closer to the parallel market," J.P. Morgan said in a note to clients. "This, combined with our understanding that official supply of US dollars channeled through the SIMADI has so far been very small, would explain the failure of the parallel FX to converge lower, in fact quite the opposite." Venezuelans attempting to use Simadi, particularly those involved in small-scale cash transactions, have complained of long waits, delays, and fees to obtain greenbacks. The private sector, meanwhile, is still in "wait and see mode," Eurasia's senior analyst for Latin America Risa Grais-Targow said in a note to clients. (Reporting by Alexandra Ulmer; Editing by Grant McCool) ((alexandra.ulmer@thomsonreuters.com; Twitter: @ReutersVzla, @AlexandraUlmer; +58 212 655 2656; Reuters Messaging: alexandra.ulmer.thomsonreuters.com@reuters.net)) Keywords: VENEZUELA FOREX/

FOREX-Dollar gets boost from U.S. data as euro sags below $1.11

March 04, 2015 - reuters.com

* Dollar index hits peak last seen in 2003 * Euro sinks below $1.11 to new low * U.S. private jobs data seen positive for Friday payrolls report (Adds late prices, details) By Michael Connor NEW YORK, March 4 (Reuters) - The dollar climbed to a fresh 11-1/2-year high on Wednesday, boosted by strong U.S. private-sector jobs growth ahead of the launch of quantitative easing by the European Central Bank. The dollar hit its highest since September 2003 against a basket of currencies .DXY and was last up 0.6 percent at 95.958. Earlier it struck a high of 96.059. The ADP National Employment Report showed a gain of 212,000 private-sector jobs. Economists surveyed by Reuters had forecast the ADP to show a gain of 220,000 jobs. ID:nL1N0W610Y Separately, the Institute for Supply Management said its services index was 56.9 in February, up slightly from 56.7 in January. Analysts were looking for a reading of 56.5 for the sector that makes up the bulk of the U.S. economy, according to a Reuters poll. The ADP data signals strength in Friday's potentially market-moving U.S. jobs report for February, according to Camilla Sutton, chief currency strategist at Scotiabank in Toronto. "What's really important now is that we get a nonfarm print on Friday that comes close to that 235,000 that is expected, or higher," Sutton said. "That will keep the expectations for a Fed interest rate hike fairly near term. For the U.S. dollar that is key." The euro's low was its lowest level against the dollar since September 2003. It last stood at $1.1071, off 0.92 percent for the day and below a key support level, Sutton said. The euro also declined to one-month lows against the yen JPY= , which was flat against the dollar at 119.72 yen. Sterling GBP= was off 0.7 percent to $1.5259. The ECB is expected to announce details of its planned 1.1 trillion euro bond-buying program on Thursday, meant to spur European economies as the Fed readies to raise rates for the first time since 2006. The dollar index has gained about 6.3 percent so far this year, helped by the U.S. economy's better performance against other major economic regions and relatively higher U.S. yields. (Additional reporting by Francesco Canepa and Anirban Nag in London; Editing by Christian Plumb and James Dalgleish) ((patrick.graham@thomsonreuters.com)(+44207 542 9429)(patrick.graham.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

ICE cotton dips for 5th straight day on strong dollar, lack of buying

March 04, 2015 - reuters.com

NEW YORK, March 4 (Reuters) - ICE cotton fell to a two-week low on Wednesday for its fifth straight session of losses as the dollar strengthened and speculators, who had fueled a rally that peaked last Thursday, continued to hold off on new buying. The most-active May cotton contract on ICE Futures U.S. CTc2 dipped 0.03 cent, less than 0.1 percent, to settle at 63.60 cents a lb, after falling as low as 63.05 cents a lb, the lowest level since Feb. 17. Wednesday marked fiber's fifth straight session of losses, its longest such streak since early July of 2014. The slight losses came as the U.S. dollar .DXY rose to an 11-1/2 year high against a basket of currencies. A stronger dollar pressures greenback-traded commodities like cotton by making them more expensive to holders of other currencies. Speculators held off on buying after contributing to a five-week rally in cotton that drove prices to five-month highs last Thursday. Mills, after doing significant buying at late January's lows and helping spark the rally, have not been buyers recently at the higher prices, said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. "We finally found some business down at 58 cents, and we ran away from it as fast as we could," Moss said. Traders awaited the release of the U.S. government's weekly export sales report on Thursday, with many expecting it to show a net cancellation of sales, Moss said. (Reporting By Luc Cohen; editing by Gunna Dickson) ((luc.cohen@thomsonreuters.com; +1-646-223-8699; Reuters Messaging: luc.cohen.thomsonreuters@reuters.net)) Keywords: MARKETS COTTON/

UPDATE 3-Bank of Canada says January cut did its job, holds rates steady

March 04, 2015 - reuters.com

(Adds CIBC rate forecast change, quote in paragraphs 6) By Randall Palmer and Leah Schnurr OTTAWA, March 4 (Reuters) - The Bank of Canada held interest rates steady on Wednesday, in line with indications it sent out over the past two weeks, signaling it was satisfied with how markets and the economy have reacted to its surprise rate cut in January. The central bank shocked traders by easing its benchmark rate by 25 basis points in January in response to the impact of cheaper oil on Canada, a major oil producer. Oil has since stabilized, and the bank sees less risk its economic forecasts will fall short. "The risks around the inflation profile are now more balanced and financial stability risks are evolving as expected in January," the bank said as it announced its key rate would stay at 0.75 percent. The current level of stimulus is "still appropriate," it said, echoing language used last week by Governor Stephen Poloz. Given the more optimistic tone, markets dramatically pared back bets on another cut in April to less than a 25 percent likelihood from 60 percent just before the statement. The currency also firmed. BOCWATCH CAD/ "It suggests steady for now, maybe forever," said Royal Bank of Canada chief economist Craig Wright. Canadian Imperial Bank of Commerce said it no longer forecasts a cut, saying "one and done" was now most likely. Financial conditions have eased materially in response to the January rate cut and to global financial developments, the central bank said, pointing to lower rates along the yield curve and the lower Canadian dollar. The bank said the easier conditions would mitigate the negative economic effects of cheap oil. The negative impact of oil prices in the first half of 2015 may be more front-end loaded than projected in January, it said, while data for 2014 suggest rotation into non-energy exports and investment is well underway. Analysts said much would depend on how the data looks early in 2015, but Bank of Montreal chief economist Doug Porter noted "it does sound like they're pretty comfortable for now at 0.75 percent". Just after the Jan. 21 rate cut, the market overwhelmingly expected another one would come on Wednesday. But Deputy Governor Agathe Cote warned on Feb. 19 nothing was predetermined, and Poloz said on Feb. 24 the bank had taken out the "appropriate amount of insurance". By Tuesday, after release of stronger-than-expected growth figures, the market had reduced bets on a rate cut on Wednesday to about 20 percent. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Canada inflation, central bank rate: http://link.reuters.com/cut67s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Randall Palmer; Editing by Peter Galloway) ((randall.palmer@thomsonreuters.com, Twitter @reutersPalmerR; +1-613-235-6745; Reuters Messaging: randall.palmer.thomsonreuters.com@reuters.net)) Keywords: CANADA CENBANK/

Worry for Ukrainians as banks shut doors amid financial turmoil

March 04, 2015 - reuters.com

By Natalia Zinets and Thomas Grove KIEV, March 4 (Reuters) - A month ago, Natalia Sorokun, 40, went to a downtown Kiev branch of Delta Bank to ask if the bank was solid enough to continue keeping her safe deposit box of valuables there. Now, a day after Ukraine's central bank declared Ukraine's fourth largest bank insolvent, Sorokun and other Delta Bank customers could only knock on the bank's locked door in hope of finding out what happened to their savings. After a year of political upheaval and war, Ukraine's economy is in tailspin with a currency that just pulled back from record lows, the highest interest rates in 15 years and fresh fears that insolvency could spread to other lenders. "In our country, it's ridiculous to believe anyone or anything. We have no laws, and any promises they make can be broken at any moment," said Sorokun who said she closed her bank accounts a year ago at the beginning of street protests that ousted Moscow-backed president Viktor Yanukovich. "The best thing is to avoid banks altogether, if you have money at all that is," said Sorokun, a speech pathologist. Depositors of other banks that have already been shut have received compensation, and the state says it will continue to compensate deposits of up to 200,000 hryvnia at failed banks. But with the currency having lost a third of its value since the start of this year after halving last year, any delay could be costly. At a Delta Bank branch in central Kiev, the lights were on but the door was locked. A note on a piece of paper over the ATM said: "out of service". A Delta Bank spokeswoman said it was not clear when customers like Sorokun would be given access to their safe boxes. Sorokun's husband said the bank's call centre had told him it hoped to restore access within a week. As part of its effort to halt the currency's slide, the central bank has also decided to raise its interest rate to 30 percent, the highest since 2000, drawing fury from businesses. "(The bank) is halting the development of industry and small and medium-sized businesses, making lending to the real sector of the economy impossible and significantly reducing consumer demand," the Kiev-based union of industrialists and entrepreneurs said. BANKS SHUT The collapse in the currency and the wider economy has been devastating for the banking sector. Ukraine's central bank has already shut around 10 banks this in the first two months of this year after closing 33 last year, in all nearly a quarter of the pre-crisis total. "(Delta) is hardly the only weak bank... Other bankruptcies may happen on the market," said Hlib Vyshlinsky, deputy managing director at GFK Ukraine, who said other banks are known for risky practices, such as lending to their shareholders. Delta's main shareholder, Nikolai Lagun, said in a statement the lender needed an injection of more cash from the central bank, like the almost 5 billion hryvnia it was given last year, and blamed the bank's fate on the country's economic situation. Kiev-based Credit Rating which monitors the health of 32 Ukrainian banks said that of them, eight were in deteriorating condition. "The biggest risk is liquidity. Without that, the future work of these institutions will depend on reforming reserves and the financial strength of the banks' partners," said Olga Shubina, deputy general director of Credit Rating. The government and central bank say the collapse in the hryvnia is driven by "irrational" demand for hard currency, which they believe will halt once Kiev's finances are repaired by the start of a $17.5 billion International Monetary Fund bailout, potentially within weeks. The hike in interest rates is part of a package of steps Kiev has taken to drive the hryvnia back up to 20-22 to the dollar after it fell below 30 to the dollar last week. It was trading at 23.71 to the dollar on Wednesday based on the average of transactions registered by the central bank. To keep up the value of the hyrvnia, exporters are obliged to sell 75 percent of their foreign currency earnings, while importers are required to obtain administrative approval before they are permitted to buy dollars. Currency traders say the restrictions on buying dollars are keeping demand artificially low, reducing trade volume and pressure on the currency, but at a cost of damage to the wider economy as importers face more difficulty doing business. "Activity is low because there are practically no buyers. The conditions for buying foreign currency, which the central bank put in place, are impossible to fulfil," said a bank trader, speaking on condition of anonymity required by the employer. Earlier this week, the parliament passed a raft of IMF-backed amendments to the 2015 draft budget in hopes of pushing the deal with the international lender through. (Additional reporting by Pavel Polityuk) ((thomas.grove@thomsonreuters.com)(+7 495 775 1242)(Reuters Messaging: thomas.grove.thomsonreuters@reuters.net)) Keywords: UKRAINE CRISIS/BANKS

UPDATE 1-Swiss government has not asked for new currency cap-spokesman

March 04, 2015 - reuters.com

(Adds details from Handelszeitung newspaper report, govt website denial) ZURICH, March 4 (Reuters) - The Swiss government has not asked its central bank to introduce a new cap on the value of the Swiss franc, a spokesman for the government said on Wednesday, after a Swiss newspaper reported that two ministers had suggested such a move. Switzerland's central bank stunned financial markets on Jan. 15 when it ended its cap on the value of the franc against the euro, stoking fears for the export-reliant Swiss economy. The Swiss National Bank (SNB) is independent of the government in its monetary policy decision making. But in a preview of a report by Handelszeitung due to be published on Thursday, the Swiss weekly, citing a confidential working paper put to the seven-member government, said that Finance Minister Eveline Widmer-Schlumpf and Economy Minister Johann Schneider-Ammann want the government to win more influence over the Swiss National Bank's (SNB) decisions through regular and intensified discussions. The country's finance and economy ministers argue for the consideration of reinstating a cap on the value of the Swiss franc to protect the Swiss economy from the fallout of a surging currency, Handelszeitung reported. According to the proposal, the aim should be to coordinate monetary and economic policy with regard to content and communication. A government spokesman declined to comment on the specifics of the newspaper report, citing the confidential nature of government meetings, but said: "The government has made no demand for a currency cap." The spokesman later issued a rare written denial published on the government's website, saying: "Handelszeitung claimed today in a preview that two federal councillors want to introduce a currency cap again. This claim is false, that is why I deny it completely." The preview of the Handelszeitung story was initially headlined "Federal councillors want to introduce currency cap again", but was later changed to "Federal councillors suggest new currency cap" on its website. A spokesman for the SNB declined to comment on the report. Switzerland's central bank has come under intense scrutiny following its decision in January, with left-wing politicians calling for a new cap to shield the economy. ID:nL5N0VZ1ES The rise in the franc has pushed many Swiss firms to cut hundreds of jobs in Switzerland, in anticipation of the strong currency eating into revenues from exports. (Reporting By Zurich Newsroom; Writing by Joshua Franklin; Editing by Elaine Hardcastle) ((joshua.franklin@thomsonreuters.com; +41 58 306 7336; Reuters Messaging: joshua.franklin.thomsonreuters.com@reuters.net)) Keywords: SWISS SNB/CAP

GLOBAL MARKETS-Stocks stumble, euro hits 11-1/2 year low before ECB

March 04, 2015 - reuters.com

* Europe equities rebound after falling on regional PMI data * Euro weakens ahead of expected details on ECB's bond program * Dollar index rises to 11-1/2 year high ahead of U.S. jobs data * Oil falls on U.S. inventory build, gold rises (Updates with European stock market close) By Richard Leong NEW YORK, March 4 (Reuters) - Stock prices around the world fell on Wednesday on profit-taking, while the euro dropped to an 11-1/2 year low ahead of a European Central Bank meeting where policymakers are expected to offer details on their bond purchase stimulus plan. The Dow Jones industrial average and Standard & Poor's 500 retreated further from the record highs set on Monday, while major gauges on top European and Japanese shares were below their multi-year peaks. "Given the strength we've had in the equity markets since the beginning of February, we are transitioning into a sideways-trending market as investors digest the recent gains and look for greater clarity," said Terry Sandven, senior equity strategist at U.S. Bank Wealth Management in Minneapolis. Brent crude hovered near $60 a barrel after data showed U.S. crude inventories climbed to a record high in the latest week. The U.S. government's February payrolls report due on Friday is seen as the week's premier data. Further evidence of jobs and wage growth would support the notion the Federal Reserve will raise interest rates as early as this summer. A private report on U.S. jobs issued on Wednesday trimmed expectations of a robust February payroll figure. Payroll processor ADP said domestic companies added 212,000 workers last month, slightly less than forecast. ID:nZON1YEC00 A separate report showed the U.S. services sector grew at a faster pace and added more workers in February. ID:nN9N0VM00W Economists polled by Reuters projected total U.S. payrolls grew 240,000 in February, below January's 257,000 increase. ECONUS The benchmark U.S. 10-year Treasury yield US10YT=RR was flat at 2.12 percent, paring its earlier decline after the stronger-than-expected services sector data. US/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphics U.S. PMI: Markit vs. ISM http://link.reuters.com/geg47v U.S. and world services PMI http://link.reuters.com/muw52w ADP U.S. private jobs http://link.reuters.com/fex44t Asset performance in 2015 http://link.reuters.com/gap87v ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> In midday U.S. trading, the Dow .DJI was down 81.30 points, or 0.45 percent, at 18,122.07. The Standard & Poor's 500 Index .SPX was down 8.21 points, or 0.39 percent, at 2,099.57. The Nasdaq Composite Index .IXIC was down 10.11 points, or 0.20 percent, at 4,969.79. .N The pan-European FTSEurofirst 300 index .FTEU3 ended up 0.7 percent at 1,557.03, recovering from a drop on Markit's final euro zone composite purchasing managers' index (PMI) that came in weaker than an initial estimate. ID:nL9N0OQ00D .EU Tokyo's Nikkei .N225 ended down 0.6 percent despite data showing a pick-up in China's services sector and a surprise rate cut in India. ID:nL4N0W51M0 .T The MSCI world equity index .MIWD00000PUS , which tracks shares in 45 nations, slipped 0.5 percent to 429.23. Lower stock prices moved in tandem with a weaker euro. The currency fell 0.9 percent to $1.1073 EUR= after touching $1.1060, the lowest since September 2003. The euro hit a near one-month low against the yen. It was last down 1.1 percent at 132.60 yen EURJPY= . The dollar strengthened against a basket of currencies .DXY , hitting an 11-1/2 year peak. It was last up 0.6 percent at 95.993. The greenback, however, was little changed against the yen at 119.75 yen JPY= . FRX/ Brent crude LCOc1 was last down 55 cents, or down 0.9 percent, at $60.47 a barrel. U.S. crude CLc1 was last down 11 cents, or down 0.22 percent, at $50.41 per barrel. O/R Spot gold prices XAU= fell $1.81 to $1,201.50 an ounce. GOL/ (Additional reporting by Chuck Mikolajczak in New York; Lionel Laurent, Blaise Robinson and Emelia Sithole-Matarise in London; Editing by Susan Fenton and Dan Grebler) ((richard.leong@thomsonreuters.com; +1 646 223 6313; Reuters Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net; Twitter @RichardLeong2)) Keywords: MARKETS GLOBAL/

UPDATE 1-Demand side of Czech economy quite optimistic-c.banker Rusnok

March 04, 2015 - reuters.com

(Adds details, quotes, wraps together comments) PRAGUE, March 4 (Reuters) - The demand side of the Czech economy looks quite optimistic and the European Central Bank's quantitative easing will boost the recovery, central bank governing board member Jiri Rusnok said on Wednesday. Rusnok, speaking to Reuters on the sidelines of a seminar, also said there was no concern over the crown currency's exchange rate levels. The Czech central bank cut interest rates to near zero in 2013 and a year after pledged to keep the crown on the weak side of 27 to the euro to keep monetary conditions easy amid deflation risks. A weak euro zone and a global drop in oil prices have renewed downward price pressures and inflation is likely to be near or below zero in the coming months. However, the central bank has said it would not respond to direct effects of low oil prices and extended its pledge to maintain a weak crown until the second half of 2016 at its meeting on Feb. 5. ID:nL6N0VF3UV It also said then it stood ready to change its crown rate commitment if there were a long-term increase in deflation pressures causing a slump in domestic demand and renewed risks of deflation. Rusnok said he did not see such a situation in the coming months and said the economy looked quite good this year. "The demand side of the economy... looks quite optimistic," he told Reuters. He later told the seminar the Czech economy's close link to the euro zone meant ECB action should help the country. "We hope the ECB will achieve what they expect, so they will somehow bring a certain impetus into the demand in the euro economy and it should also somehow influence positively the Czech economy," he said. The central bank expects growth of 2.6 percent in 2015. The crown has firmed since the last bank meeting and at one point even neared the 27 level but has since dipped back. It trade just on the strong side of 27.500 on Wednesday. "It seems to me that the situation (on the FX markets) could be quite stable for the next months," Rusnok said. He also said the ECB's policy steps and low European interest rates could potentially be for investors "some kind of motivation to at least to try to bid on some currencies which could, potentially, in the future appreciate." But he added no visible pressure was seen. "It seems to me that investors are relatively very well aware that the Czech National Bank is quite committed to (its) monetary setup at the moment," Rusnok said. (Reporting by Jason Hovet; Editing by Jan Lopatka) ((jan.lopatka@thomsonreuters.com; +420224190474; Reuters Messaging: jan.lopatka.thomsonreuters.com@reuters.net)) Keywords: CZECH CENBANK/RUSNOK

Ecuador, seeking investment, buffs up mining sector image

March 04, 2015 - reuters.com

By Nicole Mordant and Susan Taylor TORONTO, March 4 (Reuters) - Rebranding itself as a mining-friendly jurisdiction, Ecuador has high hopes that incentives and tax benefits will polish its tarnished image and attract $5 billion worth of investment over the next five years, a senior minister told Reuters. The small Andean nation believes that incentives passed in October will attract foreign miners to help develop its gold and copper riches. They include 30-year investment contracts that promise tax stability, and accelerated depreciation. "We have made the decision that mining constitutes a central axis of our development plans," said Rafael Poveda, Minister of Strategic Sectors, which includes Ecuador's mining ministry. "We want mining to constitute the axis which will allow us to improve living conditions for communities and 15 million Ecuadorians," he said at Toronto's Prospectors and Developers Association of Canada conference on Monday. The country sponsored "Ecuadorian Day" at this year's show, which included a speech by the minister of mining and project presentations. While a handful of foreign miners have ventured into Ecuador in the past decade, investment has been minimal. The country's reputation took a hit in 2013, when large Canadian-based producer Kinross Gold K.TO pulled out of the largest gold project, Fruta del Norte, saying the government refused to compromise on a 70 percent tax. When Kinross sold the high-grade venture last October, to a company belonging to the well-regarded Lundin family, the deal sparked some optimism even though the $240 million price tag was a fraction of the $1.2 billion Kinross paid in 2008. ID:nL2N0SG33U "I went down and met them (the government) before I did the deal. I got a very strong feeling that they are committed to getting the mining sector going finally," Lundin Gold LUG.TO Chairman Lukas Lundin said in an interview on Tuesday. Odin Mining and Exploration ODN.V , whose biggest investor is Canadian mining magnate Ross Beaty, is exploring for copper and gold in southern Ecuador. Still, the country faces hurdles. Ecuador's mining projects face tax rates that are among the highest of any in the region, with the government's take around 51 percent, according to a study by consulting group Wood Mackenzie. ID:nL1N0OM1ZY While the country has some "wonderful mineralizations," it remains to be seen if Ecuador has learned from past mistakes, said John Gravelle, global mining leader at consultancy PwC. "You have to make sure that the price is right to justify what the geopolitical risk is," Gravelle said. (Editing by Matthew Lewis) ((nicole.mordant@thomsonreuters.com)(+ 1 604-664-7315)(Reuters Messaging: nicole.mordant.thomsonreuters.com@reuters.net)) Keywords: MINING PDAC/ECUADOR

REFILE-UPDATE 2-Poland ends easing cycle with deeper-than-expected rate cut

March 04, 2015 - reuters.com

(Refiles to eliminate superfluous text; no change in main text) * Central bank cuts rates by 50 bps, more than expected * Bank says rate-cut cycle is over * Zloty gains after announcement that easing finished * Falling consumer prices, ECB's QE key reasons for cut By Pawel Florkiewicz and Marcin Goettig WARSAW, Mar 4 (Reuters) - Poland ended its monetary-easing cycle on Wednesday with a deeper-than-expected rate cut intended to curb deflation and prevent excessive zloty gains as the euro zone begins a massive stimulus programme. The central bank's Monetary Policy Council cut the benchmark rate 50 basis points to 1.50 percent, a record low. Most analysts polled by Reuters had expected a 25-basis-point reduction. The zloty EURPLN= weakened after the decision, then reversed losses and gained up to 0.9 percent after the bank said its easing cycle was over. "There is never a situation that the promise of the MPC in any country is carved in stone," Governor Marek Belka said. "But taking into account the current economic situation ... I cannot see room for further rate cuts and expectations thereof." Belka said the European Central Bank's bond-buying programme was one factor leading to the reduction. "If a major currency ... is a subject to a quantitative easing at a significant scale, then one can expect appreciation pressure at currencies surrounding the euro," he said at a conference following the decision. Poland has cut its benchmark interest rate PLNMR= by a total of 325 basis points since late 2012 to spur its economy, the largest in central and eastern Europe. The cut brings Polish rates closer to the level in the euro zone, the Czech Republic and the United States, all of which have rates near zero. Belka said the 50-basis-point cut was backed by a solid majority of the nine council members, eight of whom end their term early next year. Belka's term ends in June 2016, but unlike other members he may be re-appointed for a second term. "THAT'S IT" The Council also announced on Wednesday its new tri-annual economic forecasts, which slashed its forecast for 2015 and 2016 inflation but raise its expectations for economic growth. The economy is now expected to grow about 3.5 percent this year, up from 3.3 percent last year. Many analysts expect new European Union development funds to further support Poland's economy this year. A drop in oil prices caused Polish consumer prices to fall an annual 1.3 percent in January, further away from the bank's plus 2.5 percent target. But Poland's relatively low private and public debt has kept falling prices from weighing on economic activity. Data released on Monday showed Polish manufacturing continued to expand in February. Employment rose at its second-fastest level since 1998. ID:nL5N0W41R9 The unusual mix of deflation and growth led to disagreements in the Council on the need for easing earlier this year. Tensions were aggravated by secretly taped recordings revealed last year in which Belka used expletives to describe MPC members. ID:nL6N0P11M9 For Belka's highlights, statement go to: urn:newsml:reuters.com:*:nL5N0W649D (Additional reporting by Pawel Sobczak and Jakub Iglewski; Writing by Marcin Goettig; Editing by Larry King) ((marcin.goettig@thomsonreuters.com; +48226539720; Reuters Messaging: marcin.goettig.reuters.com@thomsonreuters.net)) Keywords: POLAND CENBANK/RATES

New Issue-BPCE prices 1.25 bln euro 2017 FRN

March 04, 2015 - reuters.com

Mar 04 (Reuters) -Following are terms and conditions of an FRN priced on Wednesday. Borrower BPCE SA BPCE.UL Issue Amount 1.25 billion euro Maturity Date March 10, 2017 Coupon 3-Month Euribor + 20bp Issue price Par Reoffer price Par Discount Margin 3-Month Euribor + 20bp Payment Date March 10, 2015 Lead Manager(s) Natixis, BKint, Helaba & Swedbank Ratings A2 (Moody's), A (S&P), A (Fitch) Listing Paris Full fees Undisclosed Denoms (K) 100 Notes Launched under issuer's EMTN programme For ratings information, double click on RRS0001 For all bonds data, double click on BONDS For Top international bonds news TOP/DBT For news about this issuer, double click on the issuer RIC, where assigned, and hit the newskey (F9 on Reuters terminals) ((EMEA Fixed Income Desk Bangalore; rajesh.shenoy@thomsonreuters.com; Reuters Messaging rajesh.shenoy.reuters.com@reuters.net; +91 80 6677 2510, fax +44 20 7542 5285))

New Issue-BTMU prices 750 mln euro 2022 bond

March 04, 2015 - reuters.com

Mar 04 (Reuters) -Following are terms and conditions of a bond priced on Wednesday. Borrower Bank of Mitsubishi UFJ Ltd MTFGTU.UL Issue Amount 750 million euro Maturity Date March 11, 2022 Coupon 0.875 pct Issue price 99.548 Reoffer price 99.548 Yield 0.942 pct Spread 48 basis points Underlying govt bond Over Mid-swaps Payment Date March 11, 2015 Lead Manager(s) BNP, Deutsche Bank, Morgan Satnley & MUS Ratings A1 (Moody's) Listing London Full fees Undisclosed Denoms (K) 100 - 1 Governing Law English Notes Launched under issuer's EMTN programme ISIN XS1200103361 Security details and RIC, when available, will be on Z6NS Customers can right-click on the code for performance analysis of this new issue For ratings information, double click on RRS0001 For all bonds data, double click on BONDS For Top international bonds news TOP/DBT For news about this issuer, double click on the issuer RIC, where assigned, and hit the newskey (F9 on Reuters terminals) ((EMEA Fixed Income Desk Bangalore; rajesh.shenoy@thomsonreuters.com; Reuters Messaging rajesh.shenoy.reuters.com@reuters.net; +91 80 6677 2510, fax +44 20 7542 5285))

HIGHLIGHTS-Polish central bank comments after rate decision

March 04, 2015 - reuters.com

WARSAW, March 4 (Reuters) - Following are comments from Polish central bank governor Marek Belka on Wednesday after the bank cut rates by a larger-than-expected 50 basis points to a new record low of 1.5 percent. ID:nW8N0VT00N The central bank statement after the decision is available at http://www.nbp.pl/en/aktualnosci/2014/mpc_2015_03_04.pdf ON RATES "I don't think that one could talk today about any realistic scenario that could violate the guidance that was included in the statement (where the central bank said the rate cut cycle was over)." "I said there was some space to cut rates, and this space has been exhausted." "There is never a situation that the promise of the MPC in any country is carved in stone. But taking into account the current economic situation, what one can expect on the basis of the projection and our observation of economic trends is that I cannot see room for further rate cuts and expectations thereof." "Instead of waiting for the outcome of this easing (in the euro zone) we lowered rates today. I think that the expected effects of the (ECB's) quantitative easing led the (Monetary Policy) Council to take this decision (a 50 basis point cut), this was one the factors." "This was a difficult decision ... But the discussion was full of different arguments and we've worked out a solid majority." "The Council is aware that this is the last year of the Council and we should have more time to prepare new assumptions for monetary policy, perhaps also about ways of communication." ON THE ZLOTY EURPLN=D2 "We are not targeting any level of the exchange rate. The factor that stopped me, for instance, last month from proposing a rate cut was the turbulence on the FX market. Today, it is not present any more; this factor has ceased to exist." "We are not targeting any level, of course, but when it comes to potential interventions, we've actually forgotten about them. But, as you have just mentioned them, maybe it will remind someone in the market about them. "If a major currency ... is subject to quantitative easing on a significant scale, then one can expect appreciation pressure on currencies surrounding the euro. We have seen the reaction of Swedes, Danes and Romanians." (Compiled by Marcin Goclowski; Editing by Marcin Goettig and Kevin Liffey) ((marcin.goclowski@thomsonreuters.com; +48 22 6539724; Reuters Messaging: marcin.goclowski.reuters.com@thomsonreuters.net)) Keywords: POLAND RATES/

FOREX-Dollar rallies to new high as euro sags below $1.11

March 04, 2015 - reuters.com

* Dollar index hits 11-year peak * Euro sinks below $1.11 to new low * U.S. jobs data seen positive for Friday payrolls report (Recasts, adds quotes and prices; changes byline and dateline; previous LONDON) By Michael Connor NEW YORK, March 4 (Reuters) - The dollar climbed to fresh highs on Wednesday, getting lift from solid U.S. jobs and business data, as the euro sank below $1.11 to an 11-1/2 year low ahead of the launch of quantitative easing by the European Central Bank. The dollar, bolstered by recent rises in U.S. government bond yields, hit its highest since September 2003 against a basket of currencies .DXY and was last up 0.60 percent at 95.957. Earlier it struck a high of 96.041 in trading after economic data releases. The ADP National Employment Report showed a gain of 212,000 private-sector jobs. Economists surveyed by Reuters had forecast the ADP to show a gain of 220,000 jobs. ID:nL1N0W610Y Separately, the Institute for Supply Management said its services index was 56.9 in February, up slightly from 56.7 in January. Analysts were looking for a reading of 56.5, according to a Reuters poll. The ADP data likely signalled strength in Friday's potentially markets-moving government jobs report for February, according to Camilla Sutton, chief currency strategist at Scotiabank in Toronto. "What's really important now is that we get a non-farm print on Friday that comes close to that 235,000 that is expected, or higher," Sutton said. "That will keep the expectations for a Fed interest rate hike fairly near term. For the U.S. dollar that is key." The euro last stood at $1.1072, off 0.90 percent for the day and below a key support level, Sutton said. It fell to as little as $1.1066, which was the lowest level for the euro against the dollar since September 2003, according to Thomson Reuters data. The euro also declined to one-month lows against the Japanese yen JPY= , which was flat against the dollar at 119.72 yen to the dollar. The ECB is expected to announce on Thursday details of its planned 1.1 trillion euro bond-buying program, meant to spur European economies as the Fed readies to raise its rates for the first time since 2006. There has been more momentum behind the greenback in the past week after a month of mediocre data which had left it struggling to build on six months of gains against all of its major currency peers. The dollar index has gained about 6.3 percent so far this year, helped by the U.S. economy's better performance against other major world economic regions and relatively higher U.S. yields. (Additional reporting by Francesco Canepa and Anirban Nag; Editing by Toby Chopra and Christian Plumb) ((patrick.graham@thomsonreuters.com)(+44207 542 9429)(patrick.graham.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

POLONIA Rate falls 0.05 pp.

March 04, 2015 - reuters.com

WARSAW, Mar 4 (Reuters) - POLONIA the reference rate for Overnight deposits amounted to 1.69 percent. The volume of transactions concluded till 16:30 by banks participating in POLONIA fixing amounted to 930 mln PLN. Note: Description of reference rate at: http://www.acipolska.pl/ ((warsaw.newsroom@reuters.com))

New Issue- Croatia prices 1.50 bln euro 2025 bond

March 04, 2015 - reuters.com

Mar 04 (Reuters) -Following are terms and conditions of a bond priced on Wednesday. Borrower Croatia, Republic of Issue Amount 1.50 billion euro Maturity Date March 11, 2025 Coupon 3.0 pct Issue price 97.8450 Reoffer price 97.8450 Spread 255 basis points Underlying govt bond Over the midswaps Payment Date March 11, 2015 Lead Manager(s) BARC, ERSTE, JP Morgan & UNI Ratings Ba1 (Moody's), BB (S&P) & BB (Fitch) Listing Lux Full fees Undisclosed Denoms (K) 100-1 Governing Law English ISIN XS1117298916 Security details and RIC, when available, will be on Z6OP Customers can right-click on the code for performance analysis of this new issue For ratings information, double click on RRS0001 For all bonds data, double click on BONDS For Top international bonds news TOP/DBT For news about this issuer, double click on the issuer RIC, where assigned, and hit the newskey (F9 on Reuters terminals) ((EMEA Fixed Income Desk Bangalore; Satish.KB@thomsonreuters.com; Reuters Messaging Satish.KB.reuters.com@reuters.net; +91 80 6677 2510, fax +44 20 7542 5285))

Czech central banker Rusnok ECB steps should help Czech economy

March 04, 2015 - reuters.com

PRAGUE, March 4 (Reuters) - The European Central Bank's quantitative easing programme should help the revival of the Czech economy, Czech central bank governing board member Jiri Rusnok told a business seminar on Wednesday. He also said that low interest rates in Europe could prompt some investors to look to currencies that could appreciate but that no pressure on the crown was visible and investors were aware of the Czech bank's commitment to its weak crown policy. The Czech central bank has held interest rates near zero and put a cap on the crown currency exchange rate to keep monetary conditions easy amid deflationary pressures from the euro zone. (Reporting by Jason Hovet, writing by Jan Lopatka) ((jan.lopatka@thomsonreuters.com; +420224190474; Reuters Messaging: jan.lopatka.thomsonreuters.com@reuters.net)) Keywords: CZECH CENBANK/RUSNOK

Swiss government has not asked for new currency cap on Sfr-spokesman

March 04, 2015 - reuters.com

ZURICH, March 4 (Reuters) - The Swiss government has not asked the Switzerland's central bank to introduce a new currency cap on the value of the Swiss franc, a spokesman for the government said on Wednesday. "The government has made no demand for a currency cap," a government spokesman said. Swiss newspaper Handelszeitung had reported earlier that the country's finance and economy ministers said the central bank should consider a new cap on the value of the Swiss franc. A spokesman for the Swiss National Bank declined to comment on the report. Representatives for the Swiss finance and economy ministries were not immediately able to comment. (Reporting By Joshua Franklin) ((joshua.franklin@thomsonreuters.com; +41 58 306 7336; Reuters Messaging: joshua.franklin.thomsonreuters.com@reuters.net)) Keywords: SWISS SNB/CAP

GLOBAL MARKETS-Stocks wobble, euro hits 11-1/2 year low before ECB

March 04, 2015 - reuters.com

* Europe equities fall after regional PMI data * Euro weakens ahead of expected details on ECB's bond program * Dollar index rises to 11-1/2 year high ahead of U.S. jobs data (Updates with U.S. market action; changes dateline; previous LONDON) By Richard Leong NEW YORK, March 4 (Reuters) - Stock prices around the world fell on Wednesday on profit-taking, while the euro dropped to an 11-1/2 year low ahead of a European Central Bank meeting where policymakers are expected to offer details on their bond purchase stimulus plan. In early U.S. trading, the Dow Jones industrial average and Standard & Poor's 500 retreated further from the record highs set on Monday, while major gauges on top European and Japanese shares were below their multi-year peaks. "Given the strength we've had in the equity markets since the beginning of February, we are transitioning into a sideways-trending market as investors digest the recent gains and look for greater clarity," said Terry Sandven, senior equity strategist at U.S. Bank Wealth Management in Minneapolis. Brent crude was just below $60 a barrel after Saudi Arabia's oil minister said he expected the oil market to stabilize after prices tumbled to a near six-year low in January. The U.S. government's February payrolls report due on Friday is seen as the week's premier data. Further evidence of jobs and wage growth would support the notion the Federal Reserve will raise interest rates as early as this summer. A private report on U.S. jobs issued on Wednesday trimmed expectations of a robust February payroll figure. Payroll processor ADP said domestic companies added 212,000 workers last month, slightly less than forecast. ID:nZON1YEC00 A separate report showed the U.S. services sector grew at a faster pace and added more workers in February. ID:nN9N0VM00W Economists polled by Reuters projected total U.S. payrolls grew 240,000 in February, below January's 257,000 increase. ECONUS The benchmark U.S. 10-year Treasury yield US10YT=RR was flat at 2.12 percent, paring its earlier decline after the stronger-than-expected services sector data. US/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphics ADP U.S. private jobs http://link.reuters.com/fex44t Asset performance in 2015 http://link.reuters.com/gap87v ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> In early trading, the Dow .DJI was down 142.82 points, or 0.78 percent, at 18,060.55. The Standard & Poor's 500 Index .SPX was down 16.12 points, or 0.76 percent, at 2,091.66. The Nasdaq Composite Index .IXIC was down 31.58 points, or 0.63 percent, at 4,948.32. .N The pan-European FTSEurofirst 300 index .FTEU3 edged up 0.4 percent to 1,551.37 after Markit's final euro zone composite purchasing managers' index (PMI) came in slightly weaker than a preliminary estimate. ID:nL9N0OQ00D .EU Tokyo's Nikkei .N225 ended down 0.6 percent despite data showing a pick-up in China's services sector and a surprise rate cut in India. ID:nL4N0W51M0 .T The MSCI world equity index .MIWD00000PUS , which tracks shares in 45 nations, slipped 0.7 percent to 428.16. Lower stock prices moved in tandem with a weaker euro. It fell 0.8 percent to $1.1083 EUR= after touching $1.1073, the lowest since September 2003. The single currency hit a near one-month low against the yen. It was last down 0.9 percent at 132.55 yen EURJPY= . The dollar strengthened against a basket of currencies .DXY , hitting an 11-1/2 year peak. It was last up 0.6 percent at 96.962. The greenback, however, was little changed against the yen at 119.70 yen JPY= . FRX/ Brent crude LCOc1 was last down $1.35, or down 2.21 percent, at $59.67 a barrel. U.S. crude CLc1 was last off 50 cents, or 0.99 percent, at $50.00. O/R Spot gold prices XAU= rose $1.04 or 0.09 percent to $1,204.35 an ounce. GOL/ (Additional reporting by Chuck Mikolajczak in New York; Lionel Laurent, Blaise Robinson and Emelia Sithole-Matarise in London; Editing by Susan Fenton) ((richard.leong@thomsonreuters.com; +1 646 223 6313; Reuters Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net; Twitter @RichardLeong2)) Keywords: MARKETS GLOBAL/

S.Africa's rand falls to three week-low on economy woes

March 04, 2015 - reuters.com

JOHANNESBURG, March 4 (Reuters) - South Africa's rand hit a three-week low on Wednesday as the U.S. currency strengthened and the deputy central bank governor warned domestic economic growth continued to disappoint. At 1520 GMT the rand ZAR=D3 was trading 0.75 percent weaker at 11.8500 to the dollar, its weakest level since Feb 12. Deputy Central Bank Governor Francois Groepe said on Wednesday economic growth was disappointing, but the bar for South Africa to ease monetary policy remained high, with underlying inflationary pressures persisting. ID:nJ8N0V803U Emerging market currencies are set to sink further into decade or even record lows against the dollar as interest rates start rising off zero in the United States, a Reuters poll predicted on Wednesday. ID:nL9N0QA01M "Emerging currencies in general remain on the back foot. It doesn't look good for the (rand) for the weeks ahead because the dollar remains the currency of choice for now," said Ion de Vleeschauwer, a currency dealer at Bidvest Bank. U.S. jobs data due on Friday was also on investors' minds, pushing the dollar index .DXY to an 11 1/2-year high. ID:nL5N0W62O4 In fixed income, government bonds also weakened with and the yield for the 2026 benchmark ZAR186= up 5 basis points to 7.760 percent. (Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia) ((Olivia.Kumwenda@thomsonreuters.com; +27 11 775 3159; Reuters Messaging: olivia.kumwenda.thomsonreuters.com@reuters.net)) Keywords: MARKETS SAFRICA/CURRENCY

Czech central banker Rusnok no concern on crown exchange rate level

March 04, 2015 - reuters.com

PRAGUE, March 4 (Reuters) - There is no reason to be concerned over the current exchange rate levels of the Czech crown, central bank governing board member Jiri Rusnok said on Wednesday. Rusnok also told Reuters on the sidelines of a seminar he was quite optimistic on the demand side of the economy. The central bank has pledged to keep the crown on the weak side of 27 to the euro into the second half of 2016 and has said it would not respond to direct effects of low oil prices when considering policy, including the exchange rate level. ID:nL6N0VF3UV The crown has firmed in the past weeks and neared the 27 level but has since dipped back. It stood at 27.480 to the euro on Wednesday afternoon. (Reporting by Jaosn Hovet, wtriting by Jan Lopatka) ((jan.lopatka@thomsonreuters.com; +420224190474; Reuters Messaging: jan.lopatka.thomsonreuters.com@reuters.net)) Keywords: CZECH CENBANK/RUSNOK

Brazil real weakens to 3 per dollar for 1st time in over 10 years

March 04, 2015 - reuters.com

RIO DE JANEIRO, March 4 (Reuters) - The Brazilian real weakened sharply on Wednesday, hitting the level of 3 per dollar for the first time in over 10 years, after President Dilma Rousseff's austerity plan suffered a major setback in Congress. The real BRL= lost more than 2 percent, briefly hitting the psychological-relevant level of 3 per dollar for the first time since August, 2004. It later traded around 2.995. Upset over Rousseff's austerity measures, legislators unexpectedly threw out a presidential decree that would have raised payroll taxes and helped close a gaping hole in Brazil's budget. ID:nL1N0W52VQ Investors fear Brazil may suffer additional credit rating downgrades, possibly losing its investment grade, if the government fails reach its crucial fiscal savings target this year. (Reporting by Walter Brandimarte) ((walter.brandimarte@thomsonreuters.com; +55 21 2223 7149; Reuters Messaging: walter.brandimarte.thomsonreuters.com@reuters.net)) Keywords: BRAZIL REAL/THREE

GLOBAL MARKETS-Stocks pull back further from record highs

March 04, 2015 - reuters.com

* Euro zone PMI data fails to fuel rally * Europe shares, core bond yields tick up * Asia shares fall despite India rate cut, China data (Updates prices, adds UK PMI, US futures) By Lionel Laurent LONDON, March 4 (Reuters) - Global equities pulled back from recent record highs on Wednesday, with investors turning cautious after underwhelming European PMI data and ahead of central bank meetings. U.S. jobs data due on Friday was also on investors' minds, pushing the dollar index .DXY to an 11 1/2-year high, while the euro crashed through support levels that have held for more than a month. It hit a six-week low under pressure from the imminent launch of the European Central Bank's bond-buying programme. The MSCI All Country World equity index .MIWD00000PUS slipped 0.3 percent, with Asian shares lower overall despite data showing a modest pick-up in China's services sector and a surprise rate cut in India that boosted bonds and the rupee. ID:nL4N0W51M0 U.S. equity futures SPc1 were down 0.3 percent, set to extend a pullback since the Nasdaq .IXIC began the week by hitting the 5,000 milestone for the first time since the peak of the dotcom bubble in March 2000. European markets were flat overall - with equities and bond yields ticking up - after data showed price cutting and a weaker currency were the main drivers of an acceleration in euro zone business activity in February. Markit's final composite purchasing managers' index (PMI) came in slightly weaker than a preliminary estimate although activity last month was at a seven-month high. ID:nL9N0OQ00D A below-expectations British services PMI saw sterling pull back from near seven-year-highs against the euro, and London's FTSE 100 share index .FTSE was down 0.4 percent. ID:nL5N0W622Z With major central banks at a crossroads as the ECB embarks on bond buying to further lower interest rates and spur growth, while the Federal Reserve is paving the way for a rate hike, investors are focused on data points that could give clues to the direction of future policy, especially the Fed's. "Investors are turning a bit more cautious given the ECB (meeting) tomorrow (Thursday) as well as the U.S. payrolls (data) on Friday," said Saxo Bank trader Andrea Tueni. "It's not a surprise to see a pause in the rally; stocks have been on fire since the start of the year, some people are cashing in a bit." India's central bank was the latest to surprise markets with a rate cut, lowering its policy repo rate INREPO=ECI by 25 basis points to 7.5 percent on Wednesday. That was its second inter-meeting cut this year on the back of easing inflation and what it said was the "weak state" of parts of the economy. ID:nL4N0W61KW The pan-European FTSEurofirst 300 .FTEU3 equity index was broadly flat, but shares of Standard Chartered STAN.L hit their highest level since October after the bank ruled out plans to raise capital despite reporting a 25 percent slide in annual pretax profits. ID:nL5N0W61FE German consumer goods group Henkel HNKG_p.DE fell 3.7 percent after the company struck a cautious note on its 2015 outlook as it expects stagnation in Eastern Europe and further pressure on the Russian economy and currency RUB= over the coming months. ID:nL5N0W60IR In commodities markets, Brent crude LCOc1 dipped but held above $60 a barrel, supported by a rise in Saudi crude prices and air strikes on facilities in Libya. O/R ID:nL4N0W61M1 Gold prices edged higher after a two-day losing streak, though the metal could remain under pressure due to expectations of robust U.S. economic data and higher U.S. interest rates, while London nickel held around a 14-month low. ID:nL4N0W61LH (Additional reporting by Blaise Robinson and Emelia Sithole-Matarise; Editing by Susan Fenton) ((lionel.laurent@thomsonreuters.com; +44 207 542 9746; Reuters Messaging: lionel.laurent.thomsonreuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

RPT-From prime rib to chips and dip: Lean times at mining's annual conference

March 04, 2015 - reuters.com

(Repeating story for additional subscribers without changes to text) By Susan Taylor and Euan Rocha TORONTO, March 4 (Reuters) - When the world's miners head for Toronto each year to attend their industry's annual conference, they arrive with certain expectations. They're accustomed to finding oyster bars, rowdy parties, open bars with high-end liquor and elegant hotel suites. But this year's gathering of the Prospectors and Developers Association of Canada (PDAC) is a more subdued affair, with lavish spreads and grand lodgings increasingly giving way to cheese platters and Airbnb rentals. After a years-long downturn in the mining sector - and with little relief in sight - the 2015 convention, which runs through Wednesday, has lost some of its glitz. "We're seeing far less prime rib, far more chips, far more salsa," said Benjamin Cox, chief executive of explorer Aston Bay Holdings Ltd. BAY.V . "I'm really depressed that I have to drink bourbon versus single malt scotch, it just doesn't do it for me." Striking a more serious note, Cox also summed up the overall mood of the miners: "Everyone is panicked in the industry. If you are not humbled this year, whether you work for a major or a junior or anyone in-between, you are insane." Junior mining firms, which specialize in exploration and development, have been hit especially hard by falling metal prices. Spending on global exploration for non-ferrous metals dropped to $11.4 billion in 2014 from a $21.5 billion in 2012, SNL Metals & Mining estimates. Although final attendance numbers have not been released, event organizers expected between 20,000 and 25,000 participants this year, down from a peak of some 30,000 participants during boom times. Mining firms are reluctant to miss the event entirely, since relationships that start at PDAC often translate into deals or sales down the road. But they say they are trimming where they can. Aston Bay, which saw its agreement with Chile's Antofagasta ANTO.L terminated after copper prices soured, cut its attendance to three from seven people and used online home-rental marketplace Airbnb to find a two-bedroom condo to house attendees. It has even cut the number of fact sheets it hands out. Bruce McDonald, executive vice-president at analytic services provider ALS Ltd., said he found this year's gathering "a little bit depressing," but a sign of the times. "Flat is the new up," he said. In past years, miners have vied for prime booth space on the main floor. This year, PDAC opened up the floor to a wider range of exhibitors, including suppliers, financial firms, and even pipeline company TransCanada TRP.TO , which is touting the merits of its Energy East project. Even so, there was empty exhibition space. FEWER INVITATIONS But a common theme expressed by attendees was the decline in parties. "People are definitely indulging less," said Adam Stratton, an executive at Realterm Energy. "Normally, I'd have invites to anywhere from five to 10 events a night, and now it's probably half that." Century Iron Mines FER.TO , which has C$40 million ($32 million) in working capital, moved its party from Toronto's historic Fairmont Royal York hotel - a hub for PDAC socializing - to its downtown office. At the makeshift bar set up on a reception desk, a project manager poured the drinks as guests mingled in the brightly-lit board room and corridors. Ken Cunningham, chief executive of explorer Miranda Gold MAD.V , said he tries to be smart about spending after watching "an awful lot of people that have been unemployed for a long period." An annual shareholder dinner has been scaled back to six from 50 invites and moved to a more modest Portuguese restaurant, Cunningham Said, and the company is hosting its PDAC booth for just two days of the four-day conference. Renaissance Gold REN.TO is cutting back, too. The company has opted to use free meeting rooms rather than paying to reserve space. And Renaissance executives have slashed salaries to stretch cash, said executive chairman Ron Parratt. The mining executive did well during more flush years, but recently has cut his own pay from $100,000 to $60,000 and then $24,000. Renaissance has scoured its overall operations for savings, taking such measures as donating or discarding unneeded rock samples to save $3,000 in monthly warehouse fees. "You don't want to leave anything untouched", Parratt said. Another indication of tough times is the relative dearth of news from Canadian miners leading up to PDAC. In the first seven weeks of the year, miners typically issue streams of press releases about exploration results and fund-raising efforts ahead of the busy spring drilling season. But data from a top Canadian press release service indicated the news flow from Canadian miners has dropped by more than half in the last four years. "Everyone is pretty damn depressed," Aston Bay's Cox said. "I moved my company into a basement in Vancouver, Washington. This is a recession, I have no pride." ($1 = 1.2454 Canadian dollars) (Editing by Jeffrey Hodgson and Susan Horton) ((susan.taylor1@thomsonreuters.com; +1 416 941 8083; Reuters Messaging: susan.taylor1.thomsonreuters.com@reuters.net)) Keywords: MINING PDAC/COSTCUTTING

UPDATE 1-Fresnillo results hurt by dip in gold, silver prices

March 04, 2015 - reuters.com

(Adds share movement, background, detail) March 4 (Reuters) - Precious metals miner Fresnillo Plc FRES.L reported lower-than-expected full-year profit and revenue, hurt by falling gold and silver prices. Shares in the company fell as much 8.7 percent, and were the top losers on the FTSE 100 .FTSE on Wednesday. A Reuters poll in January forecast a further decline in silver and gold prices in 2015, with gold expected to average around $1,234 an ounce and silver expected to fetch about $17.20 an ounce. ID:nL6N0V6255 The company's pretax profit fell to $251.1 million in the year ended Dec. 31 from $418.7 million a year earlier. ID:nRSD4641Ga Total revenue fell to $1.41 billion from $1.62 billion a year earlier. The company also said gold output for the year was hurt as mining at its Herradura mine was halted until March 2014 due to a ban on the use of explosives. ID:nL6N0LV16X Adjusted revenue, which excludes treatment and refining charges, and lead and zinc hedging, fell to $1.55 billion from $1.76 billion. Analysts were expecting a pretax profit of $266 million on revenue of $1.43 billion, according to Thomson Reuters StarMine SmartEstimates, which is weighted to forecasts by top-rated analysts. Fresnillo's average realised silver price fell 18.4 percent to $18.6 per ounce in 2014, while average realised gold price fell 10.2 percent to $1,257.7 per ounce. Shares in the company were down 5.2 percent at 750.3 pence on the London Stock Exchange at 1037 GMT. (Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi) ((soumithri.mamidipudi@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 806 749 6831; Reuters Messaging: venkateshasoumithri.mamidipudi.thomsonreuters.com@reuters.net)) Keywords: FRESNILLO RESULTS/

GLOBAL MARKETS-Stocks pull back further from record highs

March 04, 2015 - reuters.com

* Euro zone PMI data fails to fuel rally * Europe shares, core bond yields tick up * Asia shares fall despite India rate cut, China data By Lionel Laurent LONDON, March 4 (Reuters) - Global equities pulled back from recent record highs on Wednesday, with investors turning cautious after underwhelming euro zone PMI data and ahead of central bank meetings. U.S. jobs data due Friday was also on investors' minds, with the dollar index .DXY hitting an 11 1/2-year high, while the euro crashed through support levels that have held for more than a month. It hit a six-week low under pressure from the imminent launch of the European Central Bank's bond-buying programme. The MSCI All Country World equity index .MIWD00000PUS slipped 0.2 percent, with Asian shares lower overall despite data showing a modest pick-up in China's services sector and a surprise rate cut in India that boosted bonds and the rupee. ID:nL4N0W51M0 European markets were flat overall - with equities and bond yields ticking up - after data showed price cutting and a weaker currency were the main drivers of an acceleration in euro zone business activity in February. Markit's final composite purchasing managers' index (PMI) came in slightly weaker than a preliminary estimate although activity last month was at a seven-month high. ID:nL9N0OQ00D With major central banks at a crossroads as the ECB embarks on bond buying to further lower interest rates and spur growth, while the Federal Reserve is paving the way for a rate hike, investors are focused on data points that could give clues to the direction of future policy, especially the Fed's. "Investors are turning a bit more cautious given the ECB tomorrow (Thursday) as well as the U.S. payrolls (data) on Friday," said Saxo Bank trader Andrea Tueni. "It's not a surprise to see a pause in the rally; stocks have been on fire since the start of the year, some people are cashing in a bit." India's central bank was the latest to surprise markets with a rate cut, lowering its policy repo rate INREPO=ECI by 25 basis points to 7.5 percent on Wednesday. That was its second inter-meeting cut this year on the back of easing inflation and what it said was the "weak state" of parts of the economy. ID:nL4N0W61KW The pan-European FTSEurofirst 300 .FTEU3 equity index was up 0.1 percent, with shares of Standard Chartered STAN.L hitting their highest level since October after the bank ruled out plans to raise capital despite reporting a 25 percent slide in annual pretax profits. ID:nL5N0W61FE In commodities markets, Brent crude LCOc1 dipped but held above $60 a barrel, supported by a rise in Saudi crude prices and air strikes on facilities in Libya. O/R ID:nL4N0W61M1 Gold prices edged higher after a two-day losing streak, though the metal could remain under pressure due to expectations of robust U.S. economic data and higher U.S. interest rates, while London nickel held around a 14-month low. ID:nL4N0W61LH (Additional reporting by Blaise Robinson and Emelia Sithole-Matarise; Editing by Susan Fenton) ((lionel.laurent@thomsonreuters.com; +44 207 542 9746; Reuters Messaging: lionel.laurent.thomsonreuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

Miner Fresnillo's full-year profit falls on low silver, gold prices

March 04, 2015 - reuters.com

March 4 (Reuters) - Precious metals miner Fresnillo Plc FRES.L said its full-year pretax profit dropped 40 percent, hurt by falling gold and silver prices. The company's pretax profit fell to $251.1 million in the year ended Dec. 31 from $418.7 million a year earlier. ID:nRSD4641Ga Fresnillo, which produces silver and gold from six mines in Mexico, said total revenue fell 12.5 percent to $1.41 million. The company said the average realised silver price decreased 18.4 percent to $18.6 per ounce in 2014, while average realised gold price fell 10.2 percent to $1,257.7 per ounce. (Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi) ((soumithri.mamidipudi@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 806 749 6831; Reuters Messaging: venkateshasoumithri.mamidipudi.thomsonreuters.com@reuters.net))

From prime rib to chips and dip: Lean times at mining's annual conference

March 04, 2015 - reuters.com

By Susan Taylor and Euan Rocha TORONTO, March 4 (Reuters) - When the world's miners head for Toronto each year to attend their industry's annual conference, they arrive with certain expectations. They're accustomed to finding oyster bars, rowdy parties, open bars with high-end liquor and elegant hotel suites. But this year's gathering of the Prospectors and Developers Association of Canada (PDAC) is a more subdued affair, with lavish spreads and grand lodgings increasingly giving way to cheese platters and Airbnb rentals. After a years-long downturn in the mining sector - and with little relief in sight - the 2015 convention, which runs through Wednesday, has lost some of its glitz. "We're seeing far less prime rib, far more chips, far more salsa," said Benjamin Cox, chief executive of explorer Aston Bay Holdings Ltd. BAY.V . "I'm really depressed that I have to drink bourbon versus single malt scotch, it just doesn't do it for me." Striking a more serious note, Cox also summed up the overall mood of the miners: "Everyone is panicked in the industry. If you are not humbled this year, whether you work for a major or a junior or anyone in-between, you are insane." Junior mining firms, which specialize in exploration and development, have been hit especially hard by falling metal prices. Spending on global exploration for non-ferrous metals dropped to $11.4 billion in 2014 from a $21.5 billion in 2012, SNL Metals & Mining estimates. Although final attendance numbers have not been released, event organizers expected between 20,000 and 25,000 participants this year, down from a peak of some 30,000 participants during boom times. Mining firms are reluctant to miss the event entirely, since relationships that start at PDAC often translate into deals or sales down the road. But they say they are trimming where they can. Aston Bay, which saw its agreement with Chile's Antofagasta ANTO.L terminated after copper prices soured, cut its attendance to three from seven people and used online home-rental marketplace Airbnb to find a two-bedroom condo to house attendees. It has even cut the number of fact sheets it hands out. Bruce McDonald, executive vice-president at analytic services provider ALS Ltd., said he found this year's gathering "a little bit depressing," but a sign of the times. "Flat is the new up," he said. In past years, miners have vied for prime booth space on the main floor. This year, PDAC opened up the floor to a wider range of exhibitors, including suppliers, financial firms, and even pipeline company TransCanada TRP.TO , which is touting the merits of its Energy East project. Even so, there was empty exhibition space. FEWER INVITATIONS But a common theme expressed by attendees was the decline in parties. "People are definitely indulging less," said Adam Stratton, an executive at Realterm Energy. "Normally, I'd have invites to anywhere from five to 10 events a night, and now it's probably half that." Century Iron Mines FER.TO , which has C$40 million ($32 million) in working capital, moved its party from Toronto's historic Fairmont Royal York hotel - a hub for PDAC socializing - to its downtown office. At the makeshift bar set up on a reception desk, a project manager poured the drinks as guests mingled in the brightly-lit board room and corridors. Ken Cunningham, chief executive of explorer Miranda Gold MAD.V , said he tries to be smart about spending after watching "an awful lot of people that have been unemployed for a long period." An annual shareholder dinner has been scaled back to six from 50 invites and moved to a more modest Portuguese restaurant, Cunningham Said, and the company is hosting its PDAC booth for just two days of the four-day conference. Renaissance Gold REN.TO is cutting back, too. The company has opted to use free meeting rooms rather than paying to reserve space. And Renaissance executives have slashed salaries to stretch cash, said executive chairman Ron Parratt. The mining executive did well during more flush years, but recently has cut his own pay from $100,000 to $60,000 and then $24,000. Renaissance has scoured its overall operations for savings, taking such measures as donating or discarding unneeded rock samples to save $3,000 in monthly warehouse fees. "You don't want to leave anything untouched", Parratt said. Another indication of tough times is the relative dearth of news from Canadian miners leading up to PDAC. In the first seven weeks of the year, miners typically issue streams of press releases about exploration results and fund-raising efforts ahead of the busy spring drilling season. But data from a top Canadian press release service indicated the news flow from Canadian miners has dropped by more than half in the last four years. "Everyone is pretty damn depressed," Aston Bay's Cox said. "I moved my company into a basement in Vancouver, Washington. This is a recession, I have no pride." ($1 = 1.2454 Canadian dollars) (Editing by Jeffrey Hodgson and Susan Horton) ((susan.taylor1@thomsonreuters.com; +1 416 941 8083; Reuters Messaging: susan.taylor1.thomsonreuters.com@reuters.net)) Keywords: MINING PDAC/COSTCUTTING

INDICATORS - Kazakhstan - March 4

March 04, 2015 - reuters.com

MIDEAST STOCKS - Factors to watch - March 4

March 04, 2015 - reuters.com

DUBAI, March 4 (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 shares drift lower, India surprises with rate cut MKTS/GLOB * MIDEAST STOCKS-Gulf markets mixed on data, dividends; property stocks boost Egypt ID:nL5N0W53DM * Brent holds above $60 after Saudi price hikes O/R * Gold treads water near $1,200 as US dollar, data in focus ID:nL4N0W605A * Moody's expects low oil prices to pressure GCC banks' liquidity and profits, but foresees resilience in ratings ID:nMDYbzRf6X * MIDEAST DEBT-Oil plunge slows Gulf deposit growth, no liquidity crunch ID:nL5N0W04SZ * U.S. Republicans pushing Iran bill despite veto threat ID:nL1N0W526G * U.S. military's Mosul briefing inaccurate, misguided, Carter says ID:nL1N0W600X * Iraqi forces try to seal off Islamic State around Tikrit ID:nL5N0W54OY * Five dead in Qaeda suicide attack on Houthis in central Yemen ID:nL5N0W551J * Rival Libyan forces carry out air strikes, militants storm oilfield ID:nL5N0W51T1 * Iraq says discussing $6 bln bond issue with banks ID:nL5N0W52M0 TURKEY * Turkey stock exchange to go public in bid to jump-start equity market ID:nL5N0W525K * Turkish inflation edges up in Feb, limiting central bank's options ID:nL5N0W51BS * Tupras posts 87% jump in Q4 net, to lift output in 2015 ID:nL5N0W51PC * Turkey's Sabanci says planned IPO for Enerjisa to be after 2016 ID:nL5N0W524O EGYPT * Egypt's non-oil private sector sees sharpest contraction in 17 months in Feb ID:nL9N0OQ00G * Egypt court defers parliamentary election -judicial sources ID:nL5N0W51TW * Egypt's Pioneers eyes more food, real estate acquisitions ID:nL5N0W51ID * Egypt's foreign reserves rise to $15.456 bln at end-Feb -c. bank ID:nC6N0PA01T SAUDI ARABIA * ANALYSIS-Saudi king keeps close hand on oil in remodelling strategic team ID:nL5N0W51G6 * King's spending boosts Saudi non-oil business growth in February -PM ID:nL9N0P7018 * Kerry visits Riyadh to soothe fears of stronger Iran under nuclear deal ID:nL5N0W551Q UNITED ARAB EMIRATES * UAE non-oil business growth slows in February -PMI ID:nL9N0P7017 * Air Berlin wins approval for Etihad codeshares for summer ID:nL5N0W53ZM * Dubai's Emirates says adds $7.6 bln to EU GDP ID:nL5N0W53JN * Dubai carrier flydubai 2014 net profit up 12.3 pct on expanded network ID:nL5N0W51I0 * UAE bank ADCB tightens pricing for bond; set to price on Tues - leads ID:nL5N0W52Z1 (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS/

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