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India fwd/annualised dlr premia-Aug 21

August 21, 2014 - reuters.com

DIARY- Turkey - to Dec 24

August 21, 2014 - reuters.com

(All times are provisional and in GMT. For local time, add three hours. This diary is updated every day, and new listings or amendments are marked "*".) KEY INDICATORS DATE GMT/LOCAL INDICATOR PERIOD PRIOR 25/8 0800/1100 Foreign visitors July +6.4% 27/8 1100/1400 Interest rates August 8.25% 29/8 0700/1000 Trade balance July -$7.85b 25/8 1130/1430 Capacity usage August 74.9% 25/8 1130/1430 Manufacturing conf August 109.0 28/8 0700/1000 Consumer confidence August 73.9 1/9 0730/1030 TIM Exports August $12.54b 3/9 0700/1000 CPI m/m August 0.45% 3/9 0700/1000 CPI y/y August 9.32% 3/9 0700/1000 PPI m/m August 0.73% 3/9 0700/1000 PPI y/y August 9.46% 7/9 1430/1730 Treasury cash balance August -13.7b 8/9 0700/1000 Industrial production July +1.4% 30/10 0700/1000 Tourism revenues Q3 8.98b 11/8 0700/1000 Current account July -$4.09b THURSDAY, AUGUST 21 *ANKARA - President Abdullah Gul to meet Hakan Fidan, the head of Turkish intelligence MIT. (1100 GMT) *ANKARA - AK Party's Central Executive Board, its top decision making committee, will convene to decide on a new prime minister and new party head. (1100 GMT) *ANKARA - Energy Minister Taner Yildiz to attend a signing ceremony for Shah Deniz project. (0700 GMT) WEDNESDAY, AUGUST 27 ANKARA - Ruling AK Party to hold an extraordinary congress to choose new leader ahead of President-elect and Prime Minister Tayyip Erdogan's inauguration as president. ANKARA - Central bank to hold monetary policy committee (MPC) meeting and announce decision on interest rates. THURSDAY, AUGUST 28 ANKARA - Erdogan's inauguration as president. SATURDAY, AUGUST 30 NATIONWIDE - Celebrations marking Victory Day. MONDAY, SEPTEMBER 1 ISTANBUL - Istanbul Chamber of Commerce releases inflation data for Turkey's largest city. THURSDAY, SEPTEMBER 25 ANKARA - Central bank to hold monetary policy committee (MPC) meeting and announce decision on interest rates (1100). FRIDAY, SEPTEMBER 26 ANKARA - Central bank to hold meeting with economists (0700). WEDNESDAY, OCTOBER 1 *ANKARA - Parliament to reconvene after summer recess. *ISTANBUL - Istanbul Chamber of Commerce releases inflation data for Turkey's largest city. SATURDAY, OCTOBER 4 NATIONWIDE - First day of Islamic Eid al-Adha holiday. Until Oct. 7. THURSDAY, OCTOBER 23 ANKARA - Central bank to hold monetary policy committee (MPC) meeting and announce decision on interest rates (1200). WEDNESDAY, OCTOBER 29 NATIONWIDE - Public holiday for Republic Day. Financial markets and public offices closed. FRIDAY, OCTOBER 31 ANKARA - Central bank to announce quarterly inflation report (0800) SATURDAY, NOVEMBER 1 *ISTANBUL - Istanbul Chamber of Commerce releases inflation data for Turkey's largest city. THURSDAY, NOVEMBER 20 ANKARA - Central bank to hold monetary policy committee (MPC) meeting and announce decision on interest rates. FRIDAY, NOVEMBER 21 ANKARA - Central bank to hold meeting with economists (0800). SATURDAY, DECEMBER 1 *ISTANBUL - Istanbul Chamber of Commerce releases inflation data for Turkey's largest city. WEDNESDAY, DECEMBER 24 ANKARA - Central bank to hold monetary policy committee (MPC) meeting and announce decision on interest rates. NOTE - The inclusion of diary items does not necessarily mean Reuters will file a story based on the event. For the Reuters index of All Available Diaries, please click inside the brackets: IND/DIARY . ((Istanbul newsroom tel +90 212 350 7122)(email:)(istanbul.newsroom@reuters.com)) Keywords: DIARY TURKEY/

Turkey - Factors to Watch on Aug 21

August 21, 2014 - reuters.com

ISTANBUL, Aug 21 (Reuters) - Here are news, reports and events that may affect Turkish financial markets on Thursday. The lira TRYTOM=D3 eased to 2.1850 against the dollar at 0512 GMT, from 2.1775 later on Wednesday. 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. Turkey's benchmark two-year bond yield tTR240216T0=IS rose to 9.32 percent from 9.24 percent a day before. GLOBAL MARKETS Asian shares came under pressure on Thursday as a disappointing survey on Chinese manufacturing stoked concerns about the regional giant and overshadowed better news from Japan. The dollar was up across the board as investors detected a hawkish turn in policy discussions at the Federal Reserve. Yields on short-term U.S. debt had leapt by the most since March as minutes of the Fed's last meeting led markets to price in a greater risk of an earlier hike in interest rates. ID:nL4N0QR03U AK PARTY MEETING AK Party's Central Executive Board, its top decision making committee, will convene to decide on a new prime minister and new party head. (1100 GMT) Note: For a list of forthcoming events, see TR/DIARY . For other related news, double click on: Turkish politics TR-POL Turkish equities TR-E Turkish money TR-M Turkish debt TR-D Turkish hot stocks TR-HOT Forex news FRX All emerging market news EMRG All Turkish news TR For real-time quotes, double click on: Istanbul National-100 stock index .XU100 , interbank lira trading IYIX= , lira bond trading 0#TRTSYSUM=IS (Writing by Seda Sezer) ((seda.sezer@thomsonreuters.com)(+90 212 3507052)(Reuters Messaging: seda.sezer.reuters.com@reuters.net)) Keywords: TURKEY FACTORS/

UPDATE 1-Dollar General questions motives of Family Dollar CEO

August 21, 2014 - reuters.com

(Adds details, background) Aug 21 (Reuters) - Dollar General Corp DG.N questioned whether Family Dollar Stores Inc FDO.N Chief Executive Howard Levine was being driven by self-interest in his support of a proposed takeover of his company by Dollar Tree Inc DLTR.O . Dollar General, which has made its own offer to buy Family Dollar, also alleged it had been led astray by Levine in talks on a potential buyout, notably during a meeting on June 19. "At no time during this meeting did Mr. Levine indicate that there was a process, that there was any urgency to act or that there were discussions with another potential buyer," said Dollar General Chief Executive Rick Dreiling in a letter to Family Dollar's board on Wednesday. ID:nBw70jwjZa "Had we left the meeting with the belief that a sale of Family Dollar was imminent, we assure you that our course of action would have been different." Dollar General offered to buy Family Dollar Stores for $8.95 billion on Monday, trumping the agreed deal with Dollar Tree that was announced on July 28. ID:nL2N0QO1V6 Levine will be the chief executive of the combined Family Dollar-Dollar Tree. He would lose his job to Dreiling if the deal with Dollar General goes through. Dollar General said its offer was better for Family Dollar's shareholders than the deal offered by Dollar Tree, "although perhaps not for Mr. Levine personally." Dollar stores are popular with low- and middle-income U.S. consumers in a weak economy but are facing increasing competition from big-box retailers such as Wal-Mart Stores Inc WMT.N , putting pressure on them to merge. The U.S. market for dollar stores grew 45.7 percent to $48.2 billion between 2008 and 2013 and is expected to grow 18 percent in the next five years, according to Euromonitor International. Billionaire investor Carl Icahn has also questioned whether Levine's future role at Dollar Tree could have influenced the decision to go ahead with the Dollar Tree deal. ID:nL2N0QP0OK Icahn, who took a 9.4 percent stake in Family Dollar in June, has pushed the company to sell itself to Dollar General. Family Dollar said on Monday it was reviewing Dollar General's offer, but had not changed its recommendation in support of a merger with Dollar Tree. ID:nBwgGBwKa (Reporting by Supriya Kurane and Ramkumar Iyer in Bangalore; Editing by Gopakumar Warrier and Ted Kerr) ((ramkumar.iyer@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 1130; Reuters Messaging: ramkumar.iyer.thomsonreuters.com@reuters.net)) Keywords: FAMILY DOLLAR ST OFFER/DOLLAR GENERAL

SNAPSHOT-India stocks, bonds, rupee, swaps, call at 0436 GMT

August 21, 2014 - reuters.com

STOCKS .BSESN .NSEI ----------------------- Indian shares trading higher with the broader NSE index up 0.14 percent, as blue-chips such as State Bank of India and ONGC gain. .BO GOVERNMENT BONDS IN084024G=CC -------------------------------- India's 10-year bond yield up 2 basis points at 8.50 percent on some profit-booking and as caution prevails after Fed minutes hint at earlier rate increases depending on the labour market. IN/ RUPEE INR=D2 -------------- The partially convertible rupee marginally weaker at 60.63/64 per dollar against its previous close of 60.61/62, as dollar gains broadly as investors detect a hawkish turn in policy discussions at the Federal Reserve. However, traders will monitor flows into the debt and share markets for direction. INR/ INTEREST RATE SWAPS INROIS MIOIS= ------------------------------------- The benchmark five-year swap rate falls 1 bp at 8.03 percent. The one-year rate also down 1 bp at 8.45 percent. CALL MONEY INROND= --------------------- India's cash rate higher at 8.05/8.10 as against previous close of 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/

CNH Tracker-Stocks surge before share connect plan, issues remain

August 21, 2014 - reuters.com

By Michelle Chen and Saikat Chatterjee HONG KONG, Aug 21 (Reuters) - Stocks in Hong Kong and China's bourses have rallied ahead of a deadline to put down an investment pipe between the two markets, but issues around capital gains tax still remain to be cleared. The landmark stock-connect scheme between Shanghai and Hong Kong - another step in China's efforts to open up its markets - is set to launch in October and regulators and market participants are racing around the clock to test mechanisms to ensure market readiness. While China's investors are anticipating a wave of institutional money will flow into the mainland's relatively undervalued markets, Hong Kong's stock punters are hoping Chinese money will boost trading volume and lift stocks. The Shanghai Composite Index .SSEC rose to eight-month highs this week, and Hong Kong's Hang Seng Index .HSI also jumped to more than six-year highs, in a catch-up to strong global markets. ID:nH9N0QE00Z ID:nH9N0QE00Y "The Shanghai-Hong Kong stock connect scheme is the catalyst of the recent market rally, and risk-on sentiment globally amid ample liquidity also helps," said Ben Kwong, chief operating officer at securities firm KGI Asia. Both markets underperformed global markets for the past year and valuations are low compared with other markets, enticing some investors to switch their asset allocations now, Kwong said. Despite the recent rally, the price-to-earnings multiple of China's stock market remains well below a 10-year median indicating the extent of the undervaluation of the markets. The demand to purchase shares have seen available quotas under China's existing dual schemes becoming scarce in recent weeks with the gap between mainland listed A-shares and Hong Kong listed H-shares of Chinese companies narrowing. ETFs under an investment scheme in the Chinese currency recorded net inflows of 8.2 billion yuan ($1.33 billion) in July, the highest since December 2012 and nearly doubling from June, according to Morningstar data. ID:nL4N0QK37K While market participants are bullish on the prospects of the success of such a scheme, issues such as taxes in both these markets have yet to be resolved making some investors wary about rushing headlong when the scheme launches. "We haven't got any clarity on the tax issue yet from the regulators but we hope it will be resolved by the time the stock connect scheme launches," said Lilian Leung, a fund manager at JP Morgan's A-share Opportunities Fund earlier this week. It also remains to be seen how flows will affect yuan liquidity in the offshore market, though it is widely believed that it will become more volatile given that settlement for the scheme will be in Chinese currency. Under the requirements, mainland investors who buy Hong Kong shares will convert their RMB in the offshore market, while overseas investors will need to obtain their yuan funding in the former British colony before they invest in China. The launch of the long-awaited programme has entered the final stage with both exchanges busy testing their systems. The Hong Kong Stock Exchange said it would kick off its first connectivity test on Saturday with several rounds of market rehearsals to follow in the coming weekends. Its Shanghai counterpart already started tests last week with the first batch of 25 local brokers trading 14 selected shares listed in Hong Kong, as reported by Chinese media. WEEK IN REVIEW: * JP Morgan announced on Monday the launch of China A-share opportunity fund, the first SFC-authorised and actively managed Renminbi Qualified Foreign Institutional Investor (RQFII). The fund will allocate at least 70 percent of the portfolio to A-shares. * Long positions in the Chinese yuan hit a near seven-month high as investors piled up long positions on the currency amid signs of stabilisation in the Chinese economy, but sentiment on most emerging Asian currencies slightly deteriorated in the last two weeks, a Reuters poll showed. ID:nB9N0ND01V * Taiwan's yuan deposits rose to 293 billion yuan by the end of July, up 0.9 percent from a month earlier, statistics from the island's central bank showed. * DBS Bank said it had extended a cross-border yuan loan worth 150 million yuan to S.F. Group based in the Qianhai Shenzhen-Hong Kong Service Industry Cooperation Zone. CHART OF THE WEEK: China's A-shares are still trading at discounts compared to their counterparts in Hong Kong, but the spreads are narrowing as investors bet on a convergence of dual-listed shares with a stock connect scheme set to be launched in October: http://bit.ly/1tpQhmN RECENT STORIES: CNH Tracker-South Korea's yuan business sees strong growth despite FX volatility ID:nL4N0QH2V9 Inflows to Hong Kong ETFs soar as foreigners bet on Chinese stocks ID:nL4N0QK37K Central bank and traders briefly see eye-to-eye on yuan ID:nL4N0QL1YP More stories about the CNH market CNH Daily onshore yuan reports CNY/ Daily China money market reports CN/ Offshore yuan rate CNH= Onshore yuan rate CNY=CN Offshore yuan dealt CNH=D3 Onshore yuan on CFETS CNY=CFXS THOMSON REUTERS SPEED GUIDES CN/OFFSHORE CN/HIGHLIGHT NDF/3 NDF/4 0#CNHBOND (Editing by Jacqueline Wong) ((michelle.chen@thomsonreuters.com; +852 2843 6587; Reuters Messaging: min.chen.thomsonreuters.com@reuters.net)) Keywords: MARKETS OFFSHORE/YUAN

Indian FX/debt factors to watch - Aug 21

August 21, 2014 - reuters.com

India Morning Call-Global Markets

August 21, 2014 - reuters.com

EQUITIES NEW YORK - U.S. stocks ended mostly higher on Wednesday, with the S&P 500 just missing a record close, after minutes from the Federal Reserve's July meeting gave investors reason to believe that the central bank is in no rush to raise interest rates. The Dow Jones industrial average .DJI rose 59.54 points, or 0.35 percent, to end at 16,979.13. The S&P 500 .SPX gained 4.91 points, or 0.25 percent, to finish at 1,986.51. The Nasdaq Composite .IXIC dipped 1.03 points, or 0.02 percent, to close at 4,526.48. For a full report, click on .N - - - - LONDON - Britain's top share index retreated from a three-week high on Wednesday, halting a five-day winning streak, with companies trading without the attraction of their latest dividend putting pressure on the broader market. The benchmark index closed down 0.4 percent, or 23.83 points, at 6,755.48 points after gaining for five days in a row and climbing to its highest since late July a day earlier. For a full report, click on .L - - - - TOKYO - Japanese stocks rose to a three-week high on Thursday morning, clocking gains for the ninth consecutive day, as the weaker yen shored up exporters after minutes of the U.S. Federal Reserve's July meeting raised the risk of an earlier rate hike. The Nikkei share average .N225 climbed 1.0 percent to 15,601.99 in midmorning trade, the highest level since August 1. For a full report, click on .T - - - - HONG KONG - Hang Seng Index .HSI set to open down 0.1 percent. For a full report, click on .HK - - - - FOREIGN EXCHANGE SYDNEY - The U.S. dollar traded at 11-month highs against a basket of major currencies early on Thursday, having been given a second wind after minutes of the Federal Reserve's July meeting sounded slightly hawkish. The dollar index .DXY , still basking in the afterglow of Tuesday's upbeat U.S. housing data, climbed as far as 82.358, reaching a high not seen since early September. For a full report, click on USD/ - - - - TREASURIES NEW YORK - U.S. Treasury yields rose to one-week highs on Wednesday after minutes of the latest Federal Reserve meeting said the central bank was surprised at the U.S. labor market's quick progress, suggesting a rate increase would come sooner rather than later. Yields on U.S. long government debt advanced for a third straight session, which may reflect investors' overall comfort with the pace of the U.S. recovery. It could also mean investors are booking profits amid a searing government bond rally this year. For a full report, click on US/ - - - - COMMODITIES GOLD SINGAPORE - Gold extended losses to a fifth session on Thursday to trade near a two-week low after the U.S. dollar strengthened on indications from the U.S. Federal Reserve that it could raise interest rates sooner than expected. Spot gold XAU= fell 0.2 percent to $1,289.66 an ounce by 0020 GMT, after hitting a two-week low of $1,287.83 in the previous session. For a full report, click on GOL/ - - - - BASE METALS SYDNEY - London copper was steady on Thursday just above $7,000 a tonne which it touched in the previous session on encouraging signs from the U.S. economy and ahead of a key China factory data. Three-month copper on the London Metal Exchange CMCU3 traded flat at $7009.75 a tonne by 0058 GMT, pausing for breath after climbing 2.1 percent the session before, when it hit the highest in eight days at $7027.50 a tonne. For a full report, click on MET/L - - - - OIL NEW YORK - Brent edged down toward $102 a barrel on Thursday, near the 14-month low hit earlier this week, as concerns over excess oil supply and slowing demand weighed on prices. Brent crude LCOc1 for October dropped 24 cents to $102.04 a barrel by 0252 GMT after posting a 72-cent gain in the previous session. 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

MIDEAST STOCKS - Factors to watch - August 21

August 21, 2014 - reuters.com

DUBAI, Aug 21 (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-Asia shares slip as China disappoints, Japan bucks trend MKTS/GLOB * Brent edges down to $102, near 14-month low, on China concerns O/R * Gold extends losing streak; near 2-week low on strong dollar RTRS-GOL * MIDEAST STOCKS-Banks lift Saudi to 6-year high; Suez project cheers Egypt MEAST-STX * Obama unlikely to deepen Iraq military involvement, say U.S. officials US-IQ-SECUR * Gaza war rages on, Hamas says Israel tried to kill its military chief IL-PS * Jordan's trade deficit widens by 10.5 percent in first half JO-TRACC * Iranian parliament sacks minister, in setback for Rouhani IR-POL * Germany, Italy say prepared to send weapons to Iraq's Kurds DE-IT-IQ-SECUR * IAEA report to show Iran meeting nuclear deal terms -diplomats IAEA-IR * Libya restarts oil exports from biggest port as fighting rages in Benghazi LY-OILG * Iran to delay iron ore export tax to 2015 due to weak market - source IR-IRN TURKEY * Erdogan allies likely to dominate Turkey's new cabinet TR-POL * Turkish lira slides as dollar gains ahead of Fed minutes TR-FRX * Turkish end-July central govt debt stock falls to 590.2 bln lira TR-GFIN * Bulgaria may extend Turkish border fence to bar Syrian, Iraqi refugees TR-BG * Fitch: Turkish Banks' Loan Growth, External Debt Raise Tail Risk YKBNK.IS TR-BANK-AAA * Turkish Airlines shares jump after Q2 profit beats expectations THYAO.IS EGYPT * Four beheaded corpses found in Egypt's Sinai - security sources EG-VIO * Egyptian pound unchanged on official and black markets EG-FRX * Egypt's Pioneers Holding posts 55 pct rise in Q2 net profit PIOH.CA * Egypt's ASCOM Geology chosen for Suez project work-parent ASCM.CA CCAP.CA UNITED ARAB EMIRATES * StanChart's $300 million fine raises heat on board STAN.L * UAE tells citizens to avoid central London areas due to crime AE-GB * Dubai's Nakheel says repays all $2.15 bln bank debt four years early NAKHD.UL ENBD.DU DISB.DU * Singer resigns as CEO of Dubai financial zone authority AE-REGS * UAE's ADNOC to double diesel, jet fuel production with new refinery AE-REFI * Abu Dhabi Das crude slips into wide discount on ample supply -trade AE-CRU SAUDI ARABIA * Saudi Arabia's July oil output rises to 10 mln bpd- source SA-OILG * Saudi Aramco leads $30 mil investment in natural gas fuels company Siluria SDABO.UL KUWAIT * Kuwait detains Muslim cleric suspected of funding militants - security source KW-JUDIC QATAR * German minister accuses Qatar of funding Islamic State fighters DE-QA-DIP * Palestinian president due in Doha to meet Emir and Hamas leader PS-QA * Al Jazeera rejects Al Gore's allegations on Current TV deal QA-MDIA OMAN * Oman's Renaissance shares hit 8-week high on investment in unit RSC.OM (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS

NZ dlr hits 5-month lows, Aussie skids on soft China PMI

August 21, 2014 - reuters.com

* Kiwi at lowest since early March vs USD, 9-mth low vs AUD * Aussie drops 0.4 pct on the day vs USD * AUD govt bonds futures skid as Treasuries hit by Fed risk By Gyles Beckford and Cecile Lefort WELLINGTON/SYDNEY, Aug 21 (Reuters) - The New Zealand dollar fell to its lowest in more than five months and the Australian dollar shed half a U.S. cent on Thursday, following a soft survey reading of China's manufacturing activity and a hawkish-sounding Federal Reserve. The kiwi was at $0.8352 NZD=D4 , its lowest since early March, while the Australian dollar AUD=D4 looked feeble at $0.9250, having shed 0.4 percent on the day. The latest blow came from a soft reading of China's vast factory sector. The Antipodean currencies are sensitive to news out of China, a key export market. The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 from July's 18-month high of 51.7, missing a Reuters forecast of 51.5. ID:nL4N0QQ1S4 Both currencies had already been under pressure after investors detected a hawkish turn in policy discussions at the U.S. Federal Reserve, giving a fillip to the U.S. dollar. The New Zealand dollar dropped as far as $0.8347 and is not expected to see any relief as local data has pointed to slowing momentum, key commodity prices have fallen and the central bank has paused its rate rises likely until the end of the year. "Markets are selling the kiwi on the twin factors of a lack of domestic support for a move higher, and stronger U.S. dollar," said ANZ senior currency strategist Sam Tuck. He said the kiwi was looking like a boxer on the ropes and might face a further beating if Federal Reserve chair Janet Yellen makes hawkish comments at the Jackson Hole central bankers' gathering on Friday. "If she indicates the Fed is re-examining its previous view on the slack in the labour market and is seeing less slack, then that could be a punch that puts kiwi on the floor." Near term support for the kiwi is seen initially around $0.8340, the year to date low, but more substantially at $0.8280. The previous $0.8400 support level was now the first hurdle higher. Across the Tasman Sea, the Aussie slipped as far as $0.9235, after stops around $0.9250 were triggered. "The Aussie was already on the backfoot and the Chinese data was just an excuse to push it lower," said a trader at a European bank in Singapore, seeing the heavy tone continuing. He said a break of 92 cents would open the way to a retracement to 90 cents. Immediate support was found at $0.9240. Against its kiwi neighbour, the Aussie dollar managed to climb to a nine-month high of NZ$1.1101. AUDNZD=D4 Australian government bond futures fell in sympathy with U.S. Treasuries following the Fed minutes. The three-year bond contract YTTc1 shed 7 ticks to 97.300, while the 10-year contract YTCc1 lost 7.5 ticks to 96.510. The premium offered by Australian 10-year bonds over U.S. Treasuries last stood at 108 basis points, from a trough of 89 basis points hit last month. New Zealand government bonds 0#NZTSY= had an offered tone, sending yields up to 5.5 basis points higher. (Editing by Shri Navaratnam) ((Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: cecile.lefort.thomsonreuters@reuters.net)) Keywords: MARKETS AUSTRALIA/FOREX

FOREX-Dollar surges on hawkish-sounding Fed, Aussie hit by China PMI

August 21, 2014 - reuters.com

* Dollar index races to fresh 11-month highs * Minutes showed Fed debated about raising interest rates earlier * China flash PMI hits 3-mth low, Aussie slips (Adds details, quotes) By Ian Chua and Shinichi Saoshiro SYDNEY/TOKYO, Aug 21 (Reuters) - The U.S. dollar traded at 11-month highs against a basket of major currencies early on Thursday, having been given a second wind after minutes of the Federal Reserve's July meeting sounded slightly hawkish. The Australian dollar extended its losses after a preliminary survey of China's manufacturing sector showed growth slowing to a three-month low. ID:nL4N0QQ1S4 The dollar index .DXY , still basking in the afterglow of Tuesday's upbeat U.S. housing data, climbed as far as 82.358, reaching a high not seen since early September. It has broken clear of the 81.188/81.716 range held for much of this month. The minutes showed policymakers debated on whether interest rates should be raised earlier given a surprisingly strong jobs market recovery. Most officials, however, wanted further evidence before changing their view on when rates should be lifted. ID:nL2N0QQ228 In any case, it was enough to send U.S. Treasury yields higher with the two-year US2YT=RR note hitting a two-week high just shy of 0.5 percent. That in turn helped underpin the greenback, which rose to its highest in over four months against the yen at 103.965 JPY= , not far from the April peak of 104.13. A break there could see the market aim for the 2014 high of 105.45 set in January. "The momentum is there. The market is experiencing a bit of an euphoria, putting logic aside and now aiming for 104 yen. I hesitate to use the term but it's 'risk-on'," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. But Murata said the dollar/yen rally appeared overdone, noting that the Fed minutes did not trigger a sharp selloff in Treasuries and U.S. equities still made gains. "It appears the bond and equity markets do not share the view that a rate hike might be brought forward," he said. Other market watchers concurred. Indeed, while discussions around the table at the Fed meeting is one thing, the final opinion of the Fed Chair and her voting members is quite another. "The "significant underutilization of labor resources" view of the labour market carries the day as far as monetary policy is concerned," said David de Garis, senior economist at National Australia Bank, referring to Janet Yellen's concerns about jobs. "The market now waits for Dr Yellen's address to the Kansas City Fed Jackson Hole conference Friday," he added. Other currencies also ceded ground against the greenback, notably the euro which pierced through the Nov. 7 trough of $1.3295 EUR= to reach an 11-month low at $1.3242. The New Zealand dollar, already out of favour after the central bank last month paused its tightening cycle, skidded to a 5-1/2 month low of $0.8347 NZD=D4 . While Fed officials may be debating about the merits of an earlier tightening, two policymakers at the Bank of England (BOE) actually voted for a rate hike this month. The unexpected move revived speculation the BOE might yet raise interest rates this year. ID:nL5N0QQ1OD That saw sterling hold up fairly well against the broadly firmer greenback and actually rise on the euro, which plumbed a one-week low at 79.68 pence EURGBP=R . Meanwhile, the soft China PMI survey put a further dent on the Australian dollar. Australia is sensitive to news out of China, its key export market. The Aussie, already weakened by the bullish U.S. dollar, fell as low as $0.9235 AUD=D4 to be last at $0.9245 and showed a 0.5 percent decline on the day. AUD/ (Editing by Eric Meijer & Shri Navaratnam) ((ian.chua@thomsonreuters.com; +61 2 9373 1871; RM: ian.chua.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

Dollar General says Family Dollar did not disclose talks with Dollar Tree

August 21, 2014 - reuters.com

Aug 20 (Reuters) - Dollar General Corp DG.N said it had expressed an interest in merging with Family Dollar Stores Inc FDO.N as early as June this year, but did not go ahead with an offer at that time as Family Dollar chief executive gave no indication that the company was in talks with Dollar Tree Inc DLTR.O . Dollar General's representatives had expressed an interest for a deal during a meeting with Family Dollar CEO Howard Levine on June 19, but he did not mention anything about an imminent sale, the company said in a letter to the Family Dollar board. "At no time during this meeting did Mr. Levine indicate that there was a process, that there was any urgency to act or that there were discussions with another potential buyer," Rick Dreiling, chief executive of Dollar General, said in the letter. "Had we left the meeting with the belief that a sale of Family Dollar was imminent, we assure you that our course of action would have been different." ID:nBw70jwjZa As a result, Dollar General said it is now forced to factor a $305 million break-up fee into its offer. (Reporting by Ramkumar Iyer in Bangalore; Editing by Gopakumar Warrier) ((ramkumar.iyer@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 1130; Reuters Messaging: ramkumar.iyer.thomsonreuters.com@reuters.net)) Keywords: FAMILY DOLLAR ST OFFER/DOLLAR GENERAL

EM ASIA FX-Yuan, baht, ringgit, rupiah fall

August 21, 2014 - reuters.com

FOREX-Dollar rally finds new wings on hawkish-sounding Fed minutes

August 21, 2014 - reuters.com

* Dollar index races to fresh 11-month highs * Minutes showed Fed debated about raising interest rates earlier * BOE minutes also surprise with two members voting to hike rates * China flash PMI survey next in focus By Ian Chua SYDNEY, Aug 21 (Reuters) - The U.S. dollar traded at 11-month highs against a basket of major currencies early on Thursday, having been given a second wind after minutes of the Federal Reserve's July meeting sounded slightly hawkish. The dollar index .DXY , still basking in the afterglow of Tuesday's upbeat U.S. housing data, climbed as far as 82.277, reaching a high not seen since early September. It has broken clear of the 81.188/81.716 range held for much of this month. The minutes showed policymakers debated on whether interest rates should be raised earlier given a surprisingly strong jobs market recovery. Most officials, however, wanted further evidence before changing their view on when rates should be lifted. ID:nL2N0QQ228 In any case, it was enough to send U.S. Treasury yields sharply higher with the two-year US2YT=RR hitting a two-week high just shy of 0.5 percent. That in turn underpinned the greenback, which rose to its highest in over four months against the yen at 103.85 JPY= , not far from the April peak of 104.13. A break there could see the market aim for the 2014 high of 105.45 set in January. Other currencies also ceded ground against the greenback, notably the euro which pierced through the Nov. 7 trough of $1.3295 EUR= to reach an 11-month low at $1.3255. The New Zealand dollar, already out of favour after the central bank last month paused its tightening cycle, skidded to a 5-1/2 month low of $0.8365 NZD=D4 . Some analysts warned dollar bulls might be reading too much into the minutes. Indeed, while discussions around the table at the Fed meeting is one thing, the final opinion of the Fed Chair and her voting members is quite another. "The "significant underutilization of labor resources" view of the labour market carries the day as far as monetary policy is concerned," said David de Garis, senior economist at National Australia Bank, referring to Janet Yellen's concerns about jobs. "The market now waits for Dr Yellen's address to the Kansas City Fed Jackson Hole conference Friday," he added. While Fed officials may be debating about the merits of an earlier tightening, two policymakers at the Bank of England (BOE) actually voted for a rate hike this month. The unexpected move revived speculation the BOE might yet raise interest rates this year. ID:nL5N0QQ1OD That saw sterling hold up fairly well against the broadly firmer greenback and actually rise on the euro, which plumbed a one-week low at 79.68 pence EURGBP=R . In Asia, all eyes will be on a preliminary survey of China's manufacturing sector due at 0145 GMT. Last month, the sector posted its strongest growth in at least 1-1/2 years as new orders surged to multi-month highs. (Editing by Eric Meijer) ((ian.chua@thomsonreuters.com; +61 2 9373 1871; RM: ian.chua.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

Chile peso could depreciate further following five-year nadir

August 21, 2014 - reuters.com

By Antonio De la Jara SANTIAGO, Aug 20 (Reuters) - Chile's peso currency may fall even further, despite having sunk to an over five-year low this week, analysts said, as central bank monetary policy easing, market volatility and a recovering U.S. economy boost the value of the dollar. The peso CLP=CL has slipped around 19 percent versus the dollar since January 2013 and ended Wednesday's trading session at 584.20 per dollar, down 0.63 percent. An expansive monetary policy, with Chile's central bank cutting the benchmark interest rate by 150 basis points since October in a bid to reverse an economic slowdown, has made the peso less attractive and helped fuel its depreciation. ID:nL2N0QK2RW External factors have also played a part, said Pedro Tuesta, an economist with 4Cast in Washington, D.C. "The peso will continue to depreciate if the economy doesn't recover," said Tuesta. "Right now there's not much risk aversion and that's slowing the depreciation, but if risk aversion makes a comeback, owing to geopolitical factors or because data points to the U.S. Fed hiking interest rates before the third quarter 2015, then the peso could easily reach 600," he said. That would be its lowest level since April 2009. The peso's slide has helped fuel inflation, which topped the central bank's 2 to 4 percent target range and gave it reason to pause its easing cycle from April to June. But with inflation expectations anchored around 3 percent in the medium-term and the bank saying it expects consumer prices to subside, the benchmark interest rate was cut by 25 basis points in both July and August. Market analysts think more cuts are coming. On Monday, Chile posted its weakest quarterly economic growth since recession in 2009. ID:nL2N0QO0K4 A day after the disappointing growth data was published, central bank president Rodrigo Vergara reiterated the bank's easing bias, saying the board will consider the possibility of making more rate cuts, with economic recovery seen slower than previously expected. "Weakness in the domestic economy, which has been deeper (than initially expected), is consistent with a weaker exchange rate," said Cesar Guzman, economist at Inversiones Security in Santiago. One positive effect of the weaker peso has been a potential boost to exporters, whose products are becoming more competitive abroad. Apart from being the globe's top copper producer, Chile is also a large exporter of fresh fruit, wine and salmon. (Additional reporting by Felipe Iturrieta and Froilan Romero; Writing by Anthony Esposito, Editing by Rosalba O'Brien and Diane Craft) ((anthony.esposito@thomsonreuters.com)(Twitter: @ReutersChile)(+562-2370-4253)(Reuters Messaging: anthony.esposito.thomsonreuters.com@reuters.net)) Keywords: CHILE PESO/

S&P raises long term ratings on Ecuador to B-plus

August 21, 2014 - reuters.com

Aug 20 (Reuters) - Ratings agency Standard & Poor's on Wednesday raised its long-term sovereign credit ratings on the Republic of Ecuador to B-plus from B. The ratings agency affirmed the B short-term issuer credit ratings on Ecuador and raised the transfer and convertibility (T&C) assessment to B-plus from B. (http://bit.ly/1rmWX5z) "We raised the long-term ratings on Ecuador as a result of the government's greater fiscal flexibility, better external liquidity position, and the improving investment climate in the country." Standard & Poor's said in a statement. The ratings agency said the outlook is stable. (Reporting by Tanvi Mehta in Bangalore; Editing by Leslie Adler) ((tanvi.mehta@thomsonreuters.com; +1 646 223 8780 Extn 4756)(from the U.S.)(; +91 80 67494756)(Direct)(; Reuters Messaging: Reuters Messaging: tanvi.mehta.thomsonreuters.com@reuters.net)) Keywords: ECUADOR RATINGS

FOREX-U.S. dollar gains after Fed minutes suggest hawkish tilt

August 20, 2014 - reuters.com

* Fed minutes show slightly more hawkish tone * Dollar hits multi-month highs against major currencies * Eyes on Jackson Hole summit starting Thursday (Updates prices, adds comments) By Sam Forgione NEW YORK, Aug 20 (Reuters) - The U.S. dollar hit fresh multi-month highs against a basket of major currencies on Wednesday after minutes from the Federal Reserve's July policy meeting signaled the potential for an earlier-than-expected hike in interest rates. The Fed has been surprised by how quickly the U.S. labor market is healing but does not want to bring forward a planned rate hike until the recovery looks more convincing, the minutes showed. The minutes showed many members of the Fed's policy-setting committee thought the characterization that there was "significant" slack in the labor market "might have to change before long." ID:nW1N0PM012 "The message is hawkish," said Jose Wynne, global head of FX research at Barclays in New York. "The committee is just acknowledging that they are beginning to shift on their view on rates." Investors are monitoring the Fed closely for hints of when the U.S. central bank 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. The dollar had gained prior to the release of the minutes on optimism surrounding U.S. growth following stronger-than-expected U.S. housing data on Tuesday. The U.S. dollar index, which measures the greenback against a basket of six major currencies, hit a fresh 11-month high of 82.277. The index was last up 0.47 percent at 82.267. The euro EUR= hit a fresh 11-1/2-month low of $1.3256 against the dollar and was last down 0.45 percent against the dollar at $1.3258. The dollar hit a fresh 4-1/2-month high against the Japanese yen JPY= of 103.84 yen and was last up 0.87 percent against the yen at 103.81 yen. The dollar hit a fresh seven-month high against the Swiss franc CHF= of 0.9138 franc, and was last up 0.46 percent against the franc at 0.9133 franc. The British pound GBP= , which had earlier gained after minutes showed two of the Bank of England's policymakers unexpectedly voted earlier this month for an interest rate hike, was last down 0.15 percent against the dollar at $1.6590. The yield on benchmark 10-year U.S. Treasury notes US10YT=RR was last at 2.43 percent, up from 2.41 percent late Tuesday. Analysts looked ahead to a global central banking summit in Jackson Hole, Wyoming starting Thursday, where Fed Chair Janet Yellen is scheduled to deliver a speech on Friday. Analysts said they expected Yellen to show a dovish bias. "I don't think she'll be quite as hawkish" as the minutes released Wednesday, said John Canally, economist and investment strategist at LPL Financial in Boston. He said Yellen would likely reiterate concerns about slack in the labor market and that more dovish comments could dampen the dollar's recent gains. (Reporting by Sam Forgione; Editing by James Dalgleish and Tom Brown) ((Sam.Forgione@thomsonreuters.com; 646-223-6189; Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

WRAPUP 1-Brazil boosts credit as economy nears recession

August 20, 2014 - reuters.com

(Recasts throughout with new dateline, headline) By Luciana Otoni BRASILIA, Aug 20 (Reuters) - Brazil's government unveiled a flurry of measures on Wednesday aimed at pumping credit into a languishing economy, its latest effort to avoid a recession as a tightly contested presidential election draws closer. The Brazilian central bank increased the amount of capital available for commercial loans by at least 25 billion reais ($11.1 billion), the second such move in less than a month. The total potential stimulus offered by the central bank since July adds up to 70 billion reais ($31.1 billion). Later in the day, Finance Minister Guido Mantega announced steps to boost mortgage and auto loans, including the creation of a new debt instrument to support real estate purchases. "This will irrigate some segments of the economy that ran completely out of credit," Mantega told journalists as he announced the measures. "Credit retreated too sharply but will improve, though at a gradual pace." Shoring up Brazil's sluggish economy has proven a hard task for President Dilma Rousseff since she took office in 2011. Signs of a possible recession have piled up in recent months, including job cuts in some sectors, despite a string of tax breaks and targeted subsidies. Brazil's economy may have contracted nearly 1 percent in the second quarter, according to private estimates of gross domestic product data due out later this month. This could be a potential blow for Rousseff's hopes of getting re-elected in October. Mantega said Brazil's economy is picking up speed gradually since July and blamed the recent slowdown on tight credit. Bank lending grew in June BRLEND=ECI at the slowest pace in a decade, according to central bank data. ID:nL2N0Q40YQ But the measures are likely to be largely ineffective as, rather than being constrained by available funding for banks, credit growth has been slowing down due to economic and political uncertainties ahead of the election, said Tony Volpon, head of emerging markets research at Nomura, in a research note. He said the central bank steps were akin to pushing on a string. "Only after October will businesses and banks perhaps feel more confident in using the already ample resources they have in hand," Volpon wrote. The bank took two steps on Wednesday. The first was to cut the amount of capital commercial banks must keep on deposit by about 10 billion reais. Second, the bank cut the amount of capital that banks must have to back commercial loans. This is expected to add another 15 billion reais to lending over time. Meanwhile, the Finance Ministry announced rules for the use of real estate as collateral for loans, created a new mechanism for banks to execute defaulted auto loans, and created a new covered bond to help banks fund housing credit. The measures will not have any impact on inflation BRCPIY=ECI , which has remained within the official target range thanks to a series of recent interest rate increases by the central bank, Mantega said. (1 dollar = 2.2496 Brazil reais) (Additional reporting by Walter Brandimarte, Jeb Blount and Patricia Duarte; Writing by Silvio Cascione; Editing by Lisa Shumaker) ((silvio.cascione@thomsonreuters.com; +55 61 3426 7015; Reuters Messaging: silvio.cascione.thomsonreuters.com@reuters.net)) Keywords: BRAZIL ECONOMY/MEASURES

WRAPUP 4-Argentina bonds, peso reel on country's debt swap plan

August 20, 2014 - reuters.com

(Adds statement from holdout hedge fund Aurelius) By Hugh Bronstein and Alejandro Lifschitz BUENOS AIRES, Aug 20 (Reuters) - Argentina's new plan to skirt U.S. courts and resume payment on defaulted bonds aims to protect creditors who participated in two debt restructurings, the economy minister said on Wednesday as the local peso currency weakened to a new historic low. Defying a U.S. federal court order, Axel Kicillof also said it would be "madness" to pay holdout creditors the 100 cents on the dollar that they were awarded in 2012. The government has sent a bill to Congress that would replace its New York intermediary bank with state-run Banco Nacion, the latest move in a years-old legal chess game between Argentina and its "holdout" creditors who refused to participate in the restructuring. Argentina's black market peso reeled on the news, falling 2.0 percent to an all-time low 13.5 to the U.S. dollar. The country's benchmark dollar-denominated bonds due in 2033 slumped more than 2.0 percent in price. The legal deadlock is squeezing Argentina's foreign reserves and the availability of dollars in the market by preventing the economically ailing country from issuing international bonds. Last month, Argentina defaulted on an estimated $29 billion of its restructured debt after a New York court blocked an interest payment of $539 million. The payment did not go through to investors because U.S. District Judge Thomas Griesa says restructured bonds cannot be paid unless the holdouts are simultaneously paid 100 cents on the dollar, plus interest. The $539 million deposited by Argentina remains with intermediary Bank of New York Mellon BK.N . Argentina says Griesa overstepped his bounds by blocking the coupon payment, and is moving to ensure future payments go through local banks out of Griesa's reach. On Tuesday evening, President Cristina Fernandez announced her intention to replace Bank of New York Mellon with state-run Banco Nacion as intermediary. She also offered to swap bonds governed by U.S. law for debt under local jurisdiction. ID:nL2N0QQ04E Kicillof told reporters the proposed swap would neither break existing bond contracts nor be obligatory. "Argentina is going to continue paying its debts," Kicillof said, mentioning a $200 million payment due on Sept. 30 on restructured Par bonds denominated in dollars ARPARD=RASL . "Argentina will preserve its debt restructurings." But to pay the holdouts 100 cents on the dollar, in accordance with U.S. court rulings, would be "financial madness", he said. Holdout fund Aurelius Capital Management issued a statement saying Argentina was "doubling down on an illicit and failed approach" to its defaulted debt. "Argentina's leaders have literally chosen to be outlaws. They have chronically flouted U.S. court orders," the statement said. The debt swap bill is set to start being debated in the Fernandez-controlled Senate next week. In presenting the idea to the public on Tuesday she gave no hint of how many bond holders would have to participate in the swap for it to be activated. On international markets, the price on Argentina's widely traded and dollar-denominated Discount bond maturing in 2033 US040114GL81=R fell 2.31 percent to bid 80.513, with a nominal yield of 11.024 percent. DOZEN-YEAR CONFLICT The case goes back to Argentina's 2002 default on about $100 billion in sovereign bonds. The vast majority of holders participated in restructurings in 2005 and 2010, which offered less than 30 cents on the dollar on the defaulted debt. A group of hedge funds led by Elliott Management Corp and Aurelius opted to sue in the U.S. federal courts, which govern the original bond contracts, for 100 cents on the dollar. Fernandez and her ministers characterize the funds "vultures" who bought Argentine bonds at steep discounts and are out to wreck the country's finances in their pursuit of astronomical profits. "They have created conditions of anarchy and the destruction of the rule of law, all so they tenaciously attack countries that do not accept the conditions that they impose," Cabinet chief Jorge Capitanich said. (Additional reporting by Richard Lough and Walter Bianchi; and Daniel Bases in New York; Editing by W Simon, Clive McKeef, Andrew Hay) ((hugh.bronstein@thomsonreuters.com; 5411 4318 0655; Reuters Messaging: hugh.bronstein.thomsonreuters.com@reuters.net)) Keywords: ARGENTINA DEBT/

WRAPUP 3-Argentina bonds, peso reel on country's debt swap plan

August 20, 2014 - reuters.com

(Updates peso level, adds details about debt swap bill) By Hugh Bronstein and Alejandro Lifschitz BUENOS AIRES, Aug 20 (Reuters) - Argentina's new plan to skirt U.S. courts and resume payment on defaulted bonds aims to protect creditors who participated in two debt restructurings, the economy minister said on Wednesday as the local peso currency weakened to a new historic low. Defying a U.S. federal court order, Axel Kicillof also said it would be "madness" to pay holdout creditors the 100 cents on the dollar that they were awarded in 2012. The government has sent a bill to Congress that would replace its New York intermediary bank with state-run Banco Nacion, the latest move in a years-old legal chess game between Argentina and its "holdout" creditors who refused to participate in the restructuring. Argentina's black market peso reeled on the news, falling 2.0 percent to an all-time low 13.5 to the U.S. dollar. The country's benchmark dollar-denominated bonds due in 2033 slumped more than 2.0 percent in price. The legal deadlock is squeezing Argentina's foreign reserves and the availability of dollars in the market by preventing the economically ailing country from issuing international bonds. Last month, Argentina defaulted on an estimated $29 billion of its restructured debt after a New York court blocked an interest payment of $539 million. The payment did not go through to investors because U.S. District Judge Thomas Griesa says restructured bonds cannot be paid unless the holdouts are simultaneously paid 100 cents on the dollar, plus interest. The $539 million deposited by Argentina remains with intermediary Bank of New York Mellon BK.N . Argentina says Griesa overstepped his bounds by blocking the coupon payment, and is moving to ensure future payments go through local banks out of Griesa's reach. On Tuesday evening, President Cristina Fernandez announced her intention to replace Bank of New York Mellon with state-run Banco Nacion as intermediary. She also offered to swap bonds governed by U.S. law for debt under local jurisdiction. ID:nL2N0QQ04E Kicillof told reporters the proposed swap would neither break existing bond contracts nor be obligatory. "Argentina is going to continue paying its debts," Kicillof said, mentioning a $200 million payment due on Sept. 30 on restructured Par bonds denominated in dollars ARPARD=RASL . "Argentina will preserve its debt restructurings." But to pay the holdouts 100 cents on the dollar, in accordance with U.S. court rulings, would be "financial madness", he said. The debt swap bill is set to start being debated in the Fernandez-controlled Senate next week. In presenting the idea to the public on Tuesday she gave no hint of how many bond holders would have to participate in the swap for it to be activated. On international markets, the price on Argentina's widely traded and dollar-denominated Discount bond maturing in 2033 US040114GL81=R fell 2.31 percent to bid 80.513, with a nominal yield of 11.024 percent. DOZEN-YEAR CONFLICT The case goes back to Argentina's 2002 default on about $100 billion in sovereign bonds. The vast majority of holders participated in restructurings in 2005 and 2010, which offered less than 30 cents on the dollar on the defaulted debt. A group of hedge funds led by Elliott Management Corp and Aurelius Capital Ltd. opted to sue in the U.S. federal courts, which govern the original bond contracts, for 100 cents on the dollar. Fernandez and her ministers characterize the funds "vultures" who bought Argentine bonds at steep discounts and are out to wreck the country's finances in their pursuit of astronomical profits. "They have created conditions of anarchy and the destruction of the rule of law, all so they tenaciously attack countries that do not accept the conditions that they impose," Cabinet chief Jorge Capitanich said. (Additional reporting by Richard Lough and Walter Bianchi; Editing by W Simon and Clive McKeef) ((hugh.bronstein@thomsonreuters.com; 5411 4318 0655; Reuters Messaging: hugh.bronstein.thomsonreuters.com@reuters.net)) Keywords: ARGENTINA DEBT/

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/

London platinum/palladium 1400 fix - Aug 20

August 20, 2014 - reuters.com

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

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