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Euro zone may discuss early Irish bailout repayment to IMF

July 26, 2014 - reuters.com

BRUSSELS, July 26 (Reuters) - Euro zone finance ministers are likely to discuss in September whether to allow Ireland to repay its more expensive bailout loans from the International Monetary Fund before paying back the euro zone bailout fund, a euro zone official said. When it was cut off from the markets in 2010, Ireland borrowed from the IMF, as well as the European Financial Stability Facility and the European Financial Stability Mechanism a total of 67.5 billion euros. The loans for the IMF, which amounted to one third of the total, are more expensive than the European ones and Ireland now can borrow more cheaply on the market. Dublin therefore wants to repay the IMF loans first to cut servicing costs. But under the bailout deal early repayments have to be done proportionately to all creditors, not only one. But this could be changed if euro zone finance ministers agreed to waive their right for early repayment at the same time as the IMF and some diplomats said the political willingness to help Ireland with its debt load could be there. "This is a question the euro area finance ministrers could look at in September," said a spokesman for the European Stability Mechanism, the euro zone bailout fund. (Reporting By Jan Strupczewski, Editing by Angus MacSwan) ((jan.strupczewski@thomsonreuters.com)(+32 2 287 68 37)(Reuters Messaging: jan.strupczewski.reuters.com@reuters.net)) Keywords: IRELAND BAILOUT/REPAYMENT

UPDATE 2-Silver bullion banks accused of manipulation in U.S. lawsuit

July 26, 2014 - reuters.com

(Adds details on lawsuit, background throughout) NEW YORK, July 25 (Reuters) - Silver bullion banks Deutsche Bank DBKGn.DE , Bank of Nova Scotia BNS.TO and HSBC HSBA.L have been accused of manipulating prices in the multi-billion dollar market in a lawsuit filed on Friday. The lawsuit was filed in a New York district court by J. Scott Nicholson, a resident of Washington DC and alleges that the banks, which oversee the century-old silver fix, manipulated the physical and COMEX futures market since January 2007. Nicholson is seeking class-action status for the lawsuit, which was registered in the Southern District of New York. Deutsche Bank and HSBC declined to comment. Nova Scotia was not immediately available for comment. The lawsuit comes after a series of separate lawsuits were filed since March, accusing gold bullion banks of rigging the daily gold price. ID:nL6N0M21L1 The five banks in those lawsuits have denied the allegations. This is the first case to target the silver fix, although the silver market, whose prices have gyrated wildly in recent year, is no stranger to regulatory and legal scrutiny. In a five-year probe, the U.S. Commodity Futures Trading Commission investigated allegations that some of the world's biggest bullion banks distorted silver futures prices. The U.S. commodity regulator found no evidence of wrongdoing and dropped the probe last September. A long-running class-action antitrust lawsuit including similar accusations was dismissed at the end of last month by a federal appeals court. The lawsuit also comes at a critical time for precious metals markets, as regulators investigate trading around the setting of London's daily gold and silver price benchmarks and the industry tries to find alternative ways to price their dealing. The daily silver fix in London is set once a day by the banks in a conference call. (Reporting by Josephine Mason; Additional reporting by Lauren Tara LaCapra in New York and Cameron French in Toronto; Editing by Bernard Orr) ((Josephine.Mason@thomsonreuters.com)(+1 646 223 8925)(Reuters Messaging: josephine.mason.reuters.com@reuters.net)) Keywords: SILVER FIX/LAWSUIT

Moody's raises rating on Portugal's government bond

July 26, 2014 - reuters.com

July 24 (Reuters) - Moody's Investor Service raised Portugal's government bond rating on Friday to "Ba1" from "Ba2", citing the expectation that the country's fiscal consolidation remains on track. Portugal's highest court in May struck down several budget measures, including some public sector salary cuts, creating a fiscal gap of about 700 million euros this year. ID:nL5N0OT450 "The first driver behind the upgrade is Moody's view of the government's strong commitment to fiscal consolidation, despite repeated set-backs stemming from the adverse rulings of the country's Constitutional Court," Moody's said on Friday. (http://bit.ly/1phcEXF) Portugal has undertaken several austerity and reform measures since the European debt crisis that rocked global markets. The ratings agency assigned a stable outlook to the government bonds but said that the country's high external debt was a key credit weakness. (Reporting By Narottam Medhora in Bangalore; Editing by Joyjeet Das) ((narottam.medhora@thomsonreuters.com; Within U.S. 1-646-223-8780, Outside U.S. +91 8067496409 ; Reuters Messaging: narottam.medhora.thomsonreuters.com@reuters.net)) Keywords: PORTUGAL RATINGS/MOODY'S

Fitch affirms Russia at 'BBB'

July 25, 2014 - reuters.com

July 25 (Reuters) - Fitch affirmed its long-term foreign and local currency issuer default ratings (IDR) of "BBB" on Russia, citing "deteriorating" security situation in Eastern Ukraine that has strained its relations with the European Union (EU) and United States. The outlook of Russia's IDRs is negative, according to the ratings agency. (http://bit.ly/1xd5xBc) The U.S. has tightened sanctions against Russia, including imposing sanctions on its largest oil producer Rosneft, its second-largest gas producer Novatek and its third-largest bank Gazprombank. ID:nL6N0PS1PZ The ratings agency said the events of July 17 are expected to result in more sanctions against the country by the U.S. and the EU. "This will depress capital inflows to Russia, and potentially lead to higher capital outflows, putting downward pressure on reserves and growth", Fitch said in a statement on Friday. (Reporting by Abinaya Vijayaraghavan in Bangalore; Editing by Joyjeet Das) ((abinaya.vijayaraghavan@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 2733; Reuters Messaging: abinaya.vijayaraghavan.thomsonreuters.com@reuters.net)) Keywords: UKRAINE CRISIS/

CORRECTED-FOREX-U.S. dollar hits 8-month high against euro on weak German Ifo

July 25, 2014 - reuters.com

(Corrects name of firm in final paragraph) * Weak German Ifo data hurts euro, underpins dollar * Geopolitical tensions weigh on euro By Sam Forgione NEW YORK, July 25 (Reuters) - The U.S. dollar hit an eight-month high against the euro on Friday after weak data on German business sentiment heightened concerns that geopolitical tensions were weighing on the euro zone economy. Germany's Ifo business climate index, based on a monthly survey of some 7,000 firms, fell to 108.0 in July, marking a third consecutive monthly decline and missing estimates of 109.4, according to a Reuters poll of economists. "We continue to get strong economic releases out of the United States," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. "At the same time, we are getting not-so-great economic releases out of Europe." Scalone said data on Thursday showing that U.S. weekly jobless claims hit their lowest level since 2006 bolstered views of an improving U.S. labor market. Earlier this month, data showed a surge in U.S. nonfarm payrolls growth in June. Analysts said the weak German business sentiment underscored the impact of tensions surrounding Russia and Ukraine on Germany, Europe's biggest economy. The potential impact of hard-hitting sanctions against Russia also likely hurt business confidence in Germany, they said. European Union ambassadors reached a preliminary agreement on Friday to push ahead with sanctions against Russia but details have yet to be worked out, diplomats said. Analysts have said that the sanctions could hurt European growth by hindering trade between Russia and Germany. ID:nL6N0Q02VT "The geopolitical tension and uncertainty are already exerting a palpable effect on sentiment toward Europe and the euro," said Richard Franulovich, senior currency strategist at Westpac Securities in New York. The dollar rose against the euro after Commerce Department data showed orders for long-lasting U.S. manufactured goods rose more than expected in June, but analysts said the positive impact faded after traders assessed lackluster details, including downward revisions for May. ID:nL2N0PZ2NH The euro was last down 0.27 percent against the dollar at $1.3429 after falling to an eight-month low of $1.34210. The dollar was up 0.03 percent against the Japanese yen JPY= at 101.83 yen. Against the Swiss franc CHF=EBS , the dollar was last up 0.23 percent, to trade at 0.90480 franc after earlier hitting a five-month high of 0.90520 franc. The U.S. dollar index .DXY , which measures the dollar against a basket of six major currencies, was last up 0.22 percent at 81.047. Analysts eyed next week's Federal Reserve policy meeting, on Tuesday and Wednesday, and the U.S. government's nonfarm payrolls report for July, to be released on Friday. Economists expect U.S. employers to have added 235,000 jobs in July, according to a Reuters poll. "There is a chance of a bit more hawkish tone to the Fed's statement," said Scalone of TJM Brokerage, in light of recent strong U.S. jobs growth. (Reporting by Sam Forgione; Editing by James Dalgleish and Leslie Adler) ((Sam.Forgione@thomsonreuters.com)(646-223-6189)(Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

UPDATE 4-Brazil to pump up to $20 billion in credit into ailing economy

July 25, 2014 - reuters.com

(Adds comment that bank has no plans for more measures in paragraph 5) By Walter Brandimarte and Alonso Soto RIO DE JANEIRO/BRASILIA, July 25 (Reuters) - Brazil's central bank on Friday announced measures to inject as much as 45 billion reais ($20 billion) in credit into the country's ailing economy, which is weighed down by the highest borrowing costs in nearly three years. The bank said it was freeing up an estimated 30 billion reais in the financial system through changes to banks' reserve requirements. An additional 15 billion reais may be unlocked "over time" by easing minimal capital requirements in credit operations, a central bank official said. The move "aims at improving the distribution of liquidity in the economy" given a recent slowdown in credit and relatively low levels of loan defaults, the bank said in a statement. After years of slow growth, the Brazilian economy is flirting with a recession as manufacturing shrinks and industry workers lose their jobs. Inflation, however, is running at 6.5 percent, the ceiling of a government target, leaving policymakers in a difficult position. The bank has no plans for more measures to bolster credit, a senior government official told Reuters later on Friday. Some economists said the measures were at odds with a central bank policy of holding interest rates high, thus keeping credit tighter, to fight inflation. Just last week, the bank held its benchmark interest rate at 11 percent, the highest since October 2011. On Thursday, it made clear interest rates will not be cut any time soon. "The Brazilian central bank has shown an amazing capacity for contradicting itself," said Jankiel Santos, chief economist with Espirito Santo Investment Bank. "It is hard to understand the reasoning behind the changes announced today that are intended to foster credit operations at a time when the Brazilian monetary authority tries to tame inflation." But the new measures drew praise from local bankers. "I see the measures in a positive way as they create conditions to increase credit in some financial market areas where liquidly was less loose," said Roberto Setubal, chief executive of Itaú Unibanco Holding SA ITUB4.SA , Brazil's largest private-sector bank. President Dilma Rousseff's government has repeatedly accused private banks of being overly cautious when giving credit, increasing the burden for state-run banks. ID:nL2N0PP2A2 The central bank later said in a statement that the new policies "do not change at all" its inflation projections. Among the changes announced on Friday, banks will be allowed to use 50 percent of the amount they set aside as reserve requirements on term deposits to provide more credit or to purchase loan portfolios from eligible financial institutions. In a separate statement, the central bank said it was easing minimum capital requirements for retail credit operations. The decision aims at reviewing macroprudential measures that were implemented in 2010, when policymakers sought to slow down the pace of credit growth in Brazil. Macroprudential policies are meant to care for the health of the financial system by changing reserve and capital requirements as well as, in the case of Brazil, taxing financial operations. (Additional reporting by Patricia Duarte; Editing by W Simon and Mohammad Zargham) ((walter.brandimarte@thomsonreuters.com)(+55 21 2223 7149)(Reuters Messaging: walter.brandimarte.thomsonreuters.com@reuters.net)) Keywords: BRAZIL CENBANK/REQUIREMENTS

PRECIOUS-Gold up on Ukraine, short-covering; posts weekly loss

July 25, 2014 - reuters.com

* Geopolitical tensions over Ukraine, Iraq boost gold * Pre-weekend buying amid uncertainty lifts gold * SPDR Gold Trust holdings drop * Coming up: U.S. pending home sales Monday (Updates market activities) By Frank Tang and Clara Denina NEW YORK/LONDON, July 25 (Reuters) - Gold rose on Friday, rebounding from the previous session's drop to a one-month low, as heightened tensions between Russia and the West over Ukraine prompted speculators to buy back their bearish bets ahead of the weekend. For the week, however, bullion posted a near 1-percent drop, its second consecutive weekly decline, as encouraging recent U.S. economic indicators lessened the metal's safe-haven appeal. Gold prices climbed as Russia said the United States was trying to influence international opinion through unfounded insinuations and anti-Russian rhetoric over the crisis in Ukraine, while the Pentagon said the transfer of rocket systems from Russia to Ukrainian separatists appeared to be imminent. ID:nL6N0Q04PI ID:nL2N0Q01CS "With the news flow coming out Russia and Ukraine and you don't know what's going to happen in Iraq, traders are buying gold as they don't want to get too exposed to geopolitical risks going into the weekend," said Robert Haworth, senior investment strategist at U.S. Bank Wealth Management's Private Client Reserve. Spot gold XAU= was up 0.7 percent at 1,301.81 an ounce by 3:03 p.m. EDT (1903 GMT), after losing nearly 1 percent on Thursday, when it hit its lowest since June 19 at $1,287.46. U.S. COMEX gold futures for August delivery GCQ4 settled up $12.50 at $1,303.30 an ounce. Weaker U.S. equities dragged by bellwether online retailer Amazon also lifted gold prices. .N The market awaited the release of July U.S. non-farm payrolls and the Federal Open Market Committee meeting, both scheduled for next week. ECONUS Gold was down 0.7 percent this week, extending the previous week's 2 percent fall, mostly on speculation that an improving employment sector in the United States could signal an early rate increase by the Federal Reserve. As a gauge of investor sentiment, holdings of the SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 3.6 tonnes on Thursday - the biggest one-day drop in more than a month. GOL/ETF Silver, platinum and palladium were also headed for weekly losses, with spot silver XAG= down about 1.2 percent for the week. On Friday, it was up 1 percent at $20.52 an ounce. Platinum XPT= climbed 0.7 percent to $1,471.99 an ounce, while palladium XPD= rose 1 percent to $875.75 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by William Hardy, Pravin Char and Marguerita Choy) ((Frank.Tang@thomsonreuters.com)(+1 646 223 6126)(Reuters Messaging: frank.tang.thomsonreuters@reuters.net)) Keywords: MARKETS PRECIOUS/

Rand Refinery gets shareholder loan to cover $113 mln accounting error

July 25, 2014 - reuters.com

JOHANNESBURG, July 25 (Reuters) - South Africa's Rand Refinery Ltd, one of the world's biggest gold refiners, said it had tapped shareholders for a $114 million subordinated loan to cover an accounting error, which showed gold that it didn't have on its books. The company said "implementation difficulties" with a software system adopted in April last year led it to record 87,000 more ounces of gold on its books than it had in inventory. The gold was worth around $113 million at Friday's price XAU= of $1,302.31 an ounce. Mining companies, which are its shareholders, have agreed to lend Rand Refinery 1.2 billion rand ($114 million) to cover the error, the company said. The loan facility is convertible into equity after two years. AngloGold Ashanti ANGJ.J , which owns 42 percent of the refinery, has agreed to lend it up to 574 million rand and Sibanye Gold SGLJ.J , which owns a third, up to 449 million rand. The remainder will be covered by smaller shareholders Harmony Gold HARJ.J and Gold Fields GFIJ.J . The company said it had appointed external financial and technical specialists to advise it and help it finalise its accounts. Its processing of gold continues at full capacity, Rand Refinery said. ($1 = 10.5098 South African Rand) (Reporting by David Dolan; editing by Jane Baird) ((david.dolan@thomsonreuters.com)(+27 82 043 5161)(Reuters Messaging: david.dolan@thomsonreuters.com@reuters.net)) Keywords: SAFRICA RAND REFINERY/

Ghana 91-day bill yield rises to 24.9713 percent

July 25, 2014 - reuters.com

ACCRA, July 25 (Reuters) - The Bank of Ghana said the yield on its 91-day bill rose to a fresh three-year high of 24.9713 percent at Friday's auction, from 24.8385 percent at the last sale. The Bank said it accepted 577.21 million cedis ($158.14 million) out of the 582.29 million cedis worth of bids tendered for the 91-day paper. For full details please click here: http://www.bog.gov.gh/privatecontent/Treasury/Auctresults%201391.pdf ($1= 3.6500 cedis) (Reporting by Kwasi Kpodo; Editing by Emma Farge) ((emma.farge@thomsonreuters.com; +221 33 864 5077; Reuters Messaging: emma.farge.thomsonreuters.com@reuters.net)) Keywords: GHANA BONDS/

UPDATE 2-Freeport set to resume Indonesian copper exports

July 25, 2014 - reuters.com

(Rewrites throughout to add details on royalties, export tax) By Fergus Jensen JAKARTA, July 25 (Reuters) - Freeport-McMoRan Inc FCX.N clinched a deal with the Indonesian government on Friday allowing the miner to resume copper concentrate exports from the country, effectively ending a six-month tax dispute and paving the way for more miners to follow suit. Freeport, which is expected to export 756,000 tonnes of copper concentrate in the second half of this year, received its permit from the trade ministry on Friday after signing a memorandum of understanding (MoU) with the government, Freeport Indonesia CEO Rozik Soetjipto said. With its export permit in the bag, Indonesia's top copper miner said it will resume full operations immediately, with concentrate shipments expected to resume next month from Grasberg, one of the world's largest copper mines. "In terms of permitting, everything is OK," Soetjipto said. "We still have to load the ship, and this may take a few days." Freeport shares were up 1.79 percent on the New York Stock Exchange on Friday. The company will now be subject to higher royalties, which will increase to 4 percent for copper and 3.75 percent for gold, up from 3.5 percent and 1 percent respectively, and the U.S.-based miner will also have to pay export duties on shipments until it builds a smelter in the Southeast Asian nation. ID:nL4N0PZ182 In January, the government introduced a controversial escalating tax on metal concentrates that climbed to 60 percent by 2017. Under a revision of the tax, Freeport will pay a 7.5 percent duty on its copper concentrate exports, but that rate falls as it spends on its smelter, hitting zero once investment in the project exceeds 30 percent of total cost. The deal is expected to take some of the pressure off President-elect Joko Widodo, who has said resolving the dispute, which has sapped government mining revenues, would be one of his top priorities when he takes power in October. The export tax was meant to force miners to develop local mineral processing facilities, allowing the government to derive bigger returns from Indonesia's mineral resources. But rather than pay it, most miners stopped exporting from Southeast Asia's biggest economy, resulting in $1.3 billion in lost copper concentrate shipments. It also led Indonesia's second-biggest copper producer, Newmont Mining Corp, to file for international arbitration earlier this month over the new export rules it said were in breach of its contract. A spokesman for Newmont Mining Corp NEM.N , which owns the Batu Hijau mine on the Indonesian island of Sumbawa, said it is in talks with the government on a separate MoU that would allow it to resume operations at its massive copper mine. "We are encouraged by the news about Freeport, which we hope will pave the way for construction of a copper smelter and lead to an economically sustainable resolution of the export ban," Newmont spokesman Omar Jabara said. Freeport currently smelts some 30 to 40 percent of its output from its Grasberg mine at a copper smelter in Gresik, East Java. The company has previously said it plans to work with Indonesia's state-owned miner Aneka Tambang (Antam) ANTM.JK to build the country's second copper smelter. It is not clear whether that project will be ready before Indonesia's ban on concentrate exports begins in less than three years time. ID:nL4N0MW1ZQ (Additional reporting by Adriana Nina Kusuma and Yayat Supriatna in Jakarta and Julie Gordon in Vancouver; Writing by Randy Fabi; Editing by William Hardy and Grant McCool) ((julie.gordon@thomsonreuters.com)(+1 604 664 7314)(Reuters Messaging: julie.gordon.reuters.com@reuters.net)) Keywords: INDONESIA MINING/FREEPORT

S.Africa rand slightly firmer as it looks for momentum

July 25, 2014 - reuters.com

JOHANNESBURG, July 25 (Reuters) - The South African rand ended slightly firmer to the dollar on Friday, although it struggled to find momentum given the lack of market-moving news. The rand ZAR=D3 was at 10.5000 to the greenback at 1505 GMT, or 0.28 percent firmer. The local unit hovered around 10.55 for most of the session, before staging a late advance toward the 10.48 level it touched twice this week but has been unable to maintain. "The rand is drifting toward the bottom ranges," said Jim Bryson, a rand trader at Rand Merchant Bank. "We need to push through the 10.40s to really start generating downside support." News that over 200,000 members of the NUMSA trade union have opted to continue a strike, seemed to have already been absorbed by the market. ID:nL6N0Q01UG The upcoming week does see the release of domestic producer price inflation data as well as the latest unemployment numbers. In fixed income the paper due in 2015 ZAR157= edged stronger, with the yield falling 1 basis point to 6.64 percent. However, the yield on the paper maturing in 2026 ZAR186= added 4 basis points to 8.19 percent. (Reporting By Mfuneko Toyana; editing by David Dolan) ((mfuneko.toyana@thomsonreuters.com)(+27117753153)(Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net)) Keywords: MARKETS SAFRICA/CURRENCY

POLONIA Rate falls 0.73 pp.

July 25, 2014 - reuters.com

WARSAW, Jul 25 (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 3,155 mln PLN. Note: Description of reference rate at: http://www.acipolska.pl/ ((warsaw.newsroom@reuters.com))

UPDATE 1-Brazil's current account deficit shrinks, FDI covers gap

July 25, 2014 - reuters.com

(Adds historical comparisons, deficit-to-GDP ratios) BRASILIA, July 25 (Reuters) - Brazil posted a current account deficit BRCURA=ECI of $3.345 billion in June, a smaller-than-expected gap that was fully offset by foreign direct investment inflows for the first time since November, central bank data showed on Friday. The country had been expected to post a deficit of $3.9 billion, according to the median forecast of 19 analysts in a Reuters poll. Brazil's current account deficit in May was $6.635 billion. The current account is a country's widest measurement of foreign exchange flows, including trade, services, interest payments and remittances. Foreign direct investment BRFDI=ECI -- which falls into Brazil's balance of payments' capital account -- was $3.924 billion in June, in line with market expectations of $3.925 billion. The last time that FDI at least covered the current account deficit was in November of 2013. The country's current account gap has widened sharply over the last two years due to a dwindling trade surplus that had its weakest result in a decade in 2013. The current account gap as percentage of GDP dropped slightly to 3.58 percent in June from 3.61 percent the previous month. (Reporting by Alonso Soto; Editing by Meredith Mazzilli and W Simon) ((alonso.soto@thomsonreuters.com)(+55 61 34267027)(Reuters Messaging: alonso.soto.thomsonreuters.com@reuters.net)) Keywords: BRAZIL ECONOMY/EXTERNAL

TLTRO to stall bank funding plans

July 25, 2014 - reuters.com

* Senior unsecured bond issuance to fall off a cliff * TLTRO to have same impact as UK's Funding for Lending * Declining funding costs unable to compensate investors for bail-in threat By Aimee Donnellan and Gareth J Gore LONDON, July 25 (IFR) - Banks are likely to shelve plans to sell senior unsecured bonds, with bosses opting to save money by replacing private funding with much cheaper emergency loans from the European Central Bank designed to spur lending. Under the so-called targeted longer-term refinancing operations launched by the central bank last month, eurozone banks will be able to borrow up to 400bn starting in September, paying just 0.25% a year for the privilege - well below what they would pay to borrow in the markets. This bargain-basement funding is likely to lead banks to pull plans for bond issues. "The introduction of another LTRO means that unsecured funding levels will drop," said Damian Saunders, a DCM syndicate official at BNP Paribas. When the ECB launched the first two LTRO exercises in December 2011 and February 2012, bank bond issuance initially stalled but reignited as spreads tightened. But this time around investors say they are expecting investment opportunities from eurozone banks to dry up for a longer period of time, leaving the UK and Nordics to carry the primary issuance load. According to market sources, UniCredit and another peripheral national champion are not planning on issuing senior unsecured debt until next year. Bankers say that financial institutions are likely to grab as much cash as they can from the first two auctions as there will be no stigma attached to reducing their overall funding costs. "When the news first came out, the consensus among issuers was that they were not going to use it. However, as time has gone on, we get the sense that more will use it than first thought," said a DCM syndicate banker. "I would imagine the ECB is very keen for banks to use the TLTRO and will be going on a marketing offensive." DASH FOR CASH The ECB's attempt to encourage banks to lend to small and medium enterprises by providing cheap loans with no strings attached comes at a time when investors are already battling for allocations on rare unsecured bank bonds. Since the middle of June, only one European bank has issued a benchmark senior unsecured deal, compared with four that came to the market during the same period last year. And these figures are reflective of a greater trend of declining senior unsecured funding since the onset of the financial crisis as banks aggressively deleverage and lean on the ECB for cheap loans. The slump has dented revenues for investment banks running such deals. According to Thomson Reuters data, European banks have so far issued about 147bn equivalent of senior unsecured bonds, a slightly higher run rate compared with last year's total but dramatically lower than supply seen at the height of the credit bubble. In 2007, issuance of senior bank debt reached 318bn equivalent. BAIL-IN RISK This decline in issuance, along with the ECB's pledge to do "whatever it takes" to support the eurozone, has driven senior unsecured spreads down by more than 100bp in less than a year. And that move will be accentuated if senior issuance dries up even further and a lack of supply distorts prices. "The financials sector is extremely strong at the moment and could grind tighter as a result of these programmes," said Neil Williamson, head of EMEA credit research at Aberdeen Asset Management. "It should help cement the levels we have been seeing over the past few months but that's not to say that these programmes will somehow fix the market in a way that it won't experience corrections." Over the past year the cost of insuring bank debt as measured by the iTraxx Senior index has more than halved to 66bp (from 135bp). However, this marked improvement in funding costs is eroding the buffer investors are seeking to cushion them from the risk of bail-ins that could leave them holding nothing. The recent situation surrounding BES, when the Portuguese government said that a private solution had to be found for a private sector problem, should serve as a stark reminder that senior debt could be on the chopping block in a worst-case scenario. But in the face of the ECB backstop, European investors say they have little choice but to buy bonds with tighter spreads as redemptions are piling up and they would otherwise miss out on much-needed returns. FUNDING GAP One factor that could provide a temporary boost to senior issuance later this year is that banks will soon need to prepare to repay the three-year money they borrowed in late 2011 and early 2012. While some banks have repaid the money early to rate their financial strength, Spanish and Italian lenders still owe about 350bn borrowed under the first LTROs, which will need to be paid back. Because of the terms of the new TLTRO, however, many peripheral banks will not simply be able to transfer their borrowing from the old programme to the new. New money is linked to existing lending to the economy, meaning Spanish and Italian banks will only be able to borrow 54bn and 75bn respectively - leaving them with a gap to fill. (Reporting by Aimee Donnellan and Gareth J Gore, additional reporting by Helene Durand; Editing by Matthew Davies) ((aimee.donnellan@thomsonreuters.com)(+44 207 542 2952)(Reuters Messaging: aimee.donnellan.reuters.com@reuters.net)) Keywords: ECB BANKS

With eye on sanctions, foreigners slash Russia stock, bond investments

July 25, 2014 - reuters.com

By Sujata Rao LONDON, July 25 (Reuters) - Foreign equity and bond investors who had tentatively ventured back into Russia after a huge early-2014 selloff are again slashing their holdings for fear of being caught in the crossfire of Western sanctions. Russia has fared worst among the big emerging equity markets this year, with dollar-based losses of 13 percent. The rouble is down 5 percent against the dollar RUB= , second only to the Argentine peso, and investors are demanding a 2.8 percentage point premium to U.S. Treasuries to hold Russian dollar bonds, 80 bps higher than January. While sanctions already bar some Russian firms from Western capital markets, Washington's assertion that the Kremlin supplied artillery to Ukrainian rebels who are blamed for last week's shooting-down of a Malaysian passenger jet may bring another wave of sanctions that could cripple the economy. Some analysts say sanctions may not in the end be tightened, but many investors have not waited to find out. "We took a decision to sell up our position. It's more to do with risk management rather than fundamentals," said Aymeric Forest, who runs a $5 billion multi-asset fund at Schroders. That's a U-turn for Forest, who added to his Russia position after the Crimea crisis earlier this year because of high corporate dividends and cheap valuations. He said the decision to sell was made as soon it became clear Washington would ratchet up the sanctions. Under existing sanctions, both U.S. and European investors are barred from buying new securities issued by some Russian companies that have a significant state shareholding or are seen as close to the Kremlin. Many such as Forest fear these restrictions may soon extend to existing stocks and bonds, forcing investors into a firesale of the assets. "Legal and political risks have escalated ... we had a small position and we liquidated completely," he added. On Russian equity markets, where freely traded shares make up 29 percent of the capitalisation, foreigners' share is 19 percent, down from 21 percent in December, according to the Macro-Advisory consultancy in Moscow. June fund flows data from Boston-based fund tracker EPFR showed emerging market investors who had been pessimistic on Russia since the start of the year had actually swung to a big overweight - meaning they held more Russian stocks than the country's 5.4 percent weight in the MSCI index .MSCIEF . That was due to easing tensions since end-May when Russia struck a more conciliatory tone towards Kiev. But many of those positions will have been washed out in July as the crisis escalated, said Bank of America Merrill Lynch equity strategist Wesley Fogel. EPFR data for the past week showed investors pulled $172 million from Russia funds, the biggest outflow in six months. Fogel advises clients to buy Russian equities at current prices -- relative to expected earnings over the next 12 months they trade at about half the emerging markets average. But his view hinges on a positive outcome to the crisis, without further sanctions. "People are underweight Russia but that doesn't mean more selling cannot happen, because investor confidence is quite fragile," said Michel Danechi, portfolio manager at Swiss fund manager EI Sturdza. While share valuations and dividends are attractive in Russia, Danechi says he is staying away from companies that are under sanction, such as energy firms Rosneft and Novatek. THERE ARE ALTERNATIVES Salman Ahmed, global fixed income strategist at Lombard Odier, also reckons both sides will take a step back, meaning sanctions are unlikely to be tightened further. But his fund remains underweight in Russian rouble debt relative to its 10 percent weight in the benchmark GBI-EM index for local currency emerging debt. Rouble debt was until recently seen as attractive because of its 8 percent-plus yields - boosted further by the central bank's half point rate rise on Friday - and JPMorgan's latest client survey, conducted before the air disaster, showed a tiny 0.7 percent overweight. On dollar debt and the rouble, most funds are underweight, JPM found. The bank advised clients not to exceed index weight on rouble bonds and to use credit default swaps to hedge risk. Similarly Morgan Stanley said it was downgrading Russian corporate and local bonds to underweight. "Anyone involved in Russia must be cognizant that there will be periodic blow-ups and short squeezes," Ahmed said. "If you look at it from a relative asset angle, you will be giving up 8.5 percent yield, but in South Africa or Turkey you can capture similar yield with lower volatility." LONG-TERM Like Ahmed, many others see the West as reluctant to hurt their economic interests by cutting off trade and investment ties with Russia. President Vladimir Putin too will seek to avoid conflict that may wreck Russia's economy, they say. But that does not make them keen to venture in. For one, Russian firms must repay $160 billion in the next year. Morgan Stanley calculates. State-owned banks, that the EU is proposing to ban from capital markets, have around $33 billion coming due. Few expect default but the situation carries risks for Russia's $475 billion reserves war chest. Second, the economy is flirting with recession and capital flight has already hit $75 billion this year. Michael Cirami, co-director and portfolio manager at Eaton Vance Investment Managers' global fixed income division, believes the EU is unlikely to take any drastic measures but that has not changed his pessimistic view on Russia. "Ukraine is not the problem. Ukraine is the symptom of the problem," Cirami said. "We've been bearish on Russia since 2010. Oil dependency is huge...there is a broken growth model." (Additional reporting by Chris Vellacott; editing by Philippa Fletcher) ((sujata.rao@thomsonreuters.com)(44 20 7542 6176)(Reuters Messaging: sujata.rao.thomsonreuters.com@thomsonreuters.net)) Keywords: UKRAINE CRISIS/RUSSIA INVESTORS

INVESTMENT FOCUS-With eye on sanctions, foreigners slash Russia stock, bond investments

July 25, 2014 - reuters.com

By Sujata Rao LONDON, July 25 (Reuters) - Foreign equity and bond investors who had tentatively ventured back into Russia after a huge early-2014 selloff are again slashing their holdings for fear of being caught in the crossfire of Western sanctions. Russia has fared worst among the big emerging equity markets this year, with dollar-based losses of 13 percent. The rouble is down 5 percent against the dollar RUB= , second only to the Argentine peso, and investors are demanding a 2.8 percentage point premium to U.S. Treasuries to hold Russian dollar bonds, 80 bps higher than January. While sanctions already bar some Russian firms from Western capital markets, Washington's assertion that the Kremlin supplied artillery to Ukrainian rebels who are blamed for last week's shooting-down of a Malaysian passenger jet may bring another wave of sanctions that could cripple the economy. Some analysts say sanctions may not in the end be tightened, but many investors have not waited to find out. "We took a decision to sell up our position. It's more to do with risk management rather than fundamentals," said Aymeric Forest, who runs a $5 billion multi-asset fund at Schroders. That's a U-turn for Forest, who added to his Russia position after the Crimea crisis earlier this year because of high corporate dividends and cheap valuations. He said the decision to sell was made as soon it became clear Washington would ratchet up the sanctions. Under existing sanctions, both U.S. and European investors are barred from buying new securities issued by some Russian companies that have a significant state shareholding or are seen as close to the Kremlin. Many such as Forest fear these restrictions may soon extend to existing stocks and bonds, forcing investors into a firesale of the assets. "Legal and political risks have escalated ... we had a small position and we liquidated completely," he added. On Russian equity markets, where freely traded shares make up 29 percent of the capitalisation, foreigners' share is 19 percent, down from 21 percent in December, according to the Macro-Advisory consultancy in Moscow. June fund flows data from Boston-based fund tracker EPFR showed emerging market investors who had been pessimistic on Russia since the start of the year had actually swung to a big overweight - meaning they held more Russian stocks than the country's 5.4 percent weight in the MSCI index .MSCIEF . That was due to easing tensions since end-May when Russia struck a more conciliatory tone towards Kiev. But many of those positions will have been washed out in July as the crisis escalated, said Bank of America Merrill Lynch equity strategist Wesley Fogel. EPFR data for the past week showed investors pulled $172 million from Russia funds, the biggest outflow in six months. Fogel advises clients to buy Russian equities at current prices -- relative to expected earnings over the next 12 months they trade at about half the emerging markets average. But his view hinges on a positive outcome to the crisis, without further sanctions. "People are underweight Russia but that doesn't mean more selling cannot happen, because investor confidence is quite fragile," said Michel Danechi, portfolio manager at Swiss fund manager EI Sturdza. While share valuations and dividends are attractive in Russia, Danechi says he is staying away from companies that are under sanction, such as energy firms Rosneft and Novatek. THERE ARE ALTERNATIVES Salman Ahmed, global fixed income strategist at Lombard Odier, also reckons both sides will take a step back, meaning sanctions are unlikely to be tightened further. But his fund remains underweight in Russian rouble debt relative to its 10 percent weight in the benchmark GBI-EM index for local currency emerging debt. Rouble debt was until recently seen as attractive because of its 8 percent-plus yields - boosted further by the central bank's half point rate rise on Friday - and JPMorgan's latest client survey, conducted before the air disaster, showed a tiny 0.7 percent overweight. On dollar debt and the rouble, most funds are underweight, JPM found. The bank advised clients not to exceed index weight on rouble bonds and to use credit default swaps to hedge risk. Similarly Morgan Stanley said it was downgrading Russian corporate and local bonds to underweight. "Anyone involved in Russia must be cognizant that there will be periodic blow-ups and short squeezes," Ahmed said. "If you look at it from a relative asset angle, you will be giving up 8.5 percent yield, but in South Africa or Turkey you can capture similar yield with lower volatility." LONG-TERM Like Ahmed, many others see the West as reluctant to hurt their economic interests by cutting off trade and investment ties with Russia. President Vladimir Putin too will seek to avoid conflict that may wreck Russia's economy, they say. But that does not make them keen to venture in. For one, Russian firms must repay $160 billion in the next year. Morgan Stanley calculates. State-owned banks, that the EU is proposing to ban from capital markets, have around $33 billion coming due. Few expect default but the situation carries risks for Russia's $475 billion reserves war chest. Second, the economy is flirting with recession and capital flight has already hit $75 billion this year. Michael Cirami, co-director and portfolio manager at Eaton Vance Investment Managers' global fixed income division, believes the EU is unlikely to take any drastic measures but that has not changed his pessimistic view on Russia. "Ukraine is not the problem. Ukraine is the symptom of the problem," Cirami said. "We've been bearish on Russia since 2010. Oil dependency is huge...there is a broken growth model." (Additional reporting by Chris Vellacott; editing by Philippa Fletcher) ((sujata.rao@thomsonreuters.com)(44 20 7542 6176)(Reuters Messaging: sujata.rao.thomsonreuters.com@thomsonreuters.net)) Keywords: UKRAINE CRISIS/RUSSIA INVESTORS

FOREX-U.S. dollar gains on durable goods data, dip in German sentiment

July 25, 2014 - reuters.com

* U.S. dollar hits new eight-month high against euro * U.S. durable goods data, weak German Ifo underpin dollar * Geopolitical tensions weigh on euro (Updates prices, adds comment, changes byline, dateline, previous LONDON) By Sam Forgione NEW YORK, July 25 (Reuters) - The U.S. dollar hit new eight-month highs against the euro on Friday after stronger-than-expected data on U.S. durable goods orders boosted the greenback, while weak German business sentiment heightened concerns about the euro zone. The Commerce Department said Friday that orders for long-lasting U.S. manufactured goods rose 0.7 percent in June, beating economists' expectations for a 0.5 percent rise. The data pointed to momentum in the U.S. economy and underpinned the dollar, which had earlier gained on a drop in Germany's Ifo survey of business sentiment. ID:nL2N0Q00MM "U.S. data has been good or better than expected, whereas European data continues to point to a slowdown," said Boris Schlossberg, managing director in FX strategy at BK Asset Management in New York. Germany's Ifo survey of business sentiment based on a monthly survey of some 7,000 firms fell to 108.0 in July, marking its third consecutive monthly decline and missing estimates of 109.4, according to a Reuters poll of economists. The euro hit a new eight-month low against the dollar of $1.3427 in the wake of the U.S. durable goods orders data, which came on the heels of more positive U.S. jobless data Thursday. The euro fell against the dollar partly on geopolitical tensions between Russia and Ukraine, which could hurt European growth given trade between Russia and Germany, analysts said. European Union ambassadors reached preliminary agreement on Friday to push ahead with hard-hitting sanctions against Russia but details have yet to be worked out, diplomats said. ID:nL6N0Q02VT "There's some perception that if geopolitical tensions escalate, the euro zone economy would be the most potentially vulnerable economy in the G10, and that hurts the euro," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. The euro was last down 0.2 percent against the dollar to trade at $1.34365. The dollar was flat against the Japanese yen JPY= at 101.8 yen, and was up 0.19 percent against the Swiss franc CHF= to trade at 0.90435 franc after hitting a fresh five-month high of 0.90485. The U.S. dollar index .DXY , which measures the dollar against a basket of six major currencies, was last up 0.14 percent at 80.982. While the U.S. and European data helped lift the dollar, a drop in U.S. government bond yields limited the dollar's gain. Benchmark 10-year U.S. Treasury notes US10YT=RR were last up 8/32 in price to yield 2.478 percent, with fixed-income traders disappointed by soft spots in the U.S. durable goods data including weaknesses in airlines and other sectors. (Reporting by Sam Forgione; Editing by James Dalgleish) ((Sam.Forgione@thomsonreuters.com)(646-223-6189)(Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

Sterling firmer vs euro as GDP data highlights diverging fortunes

July 25, 2014 - reuters.com

(Adds gilts) By Jemima Kelly LONDON, July 25 (Reuters) - Sterling rose against the euro on Friday after data showed Britain's economy is bigger than it was before the financial crisis six years ago, highlighting the increasingly divergent economic and policy outlooks for the UK and euro zone. Gross domestic product (GDP) expanded by 0.8 percent in the April-June period, the same strong pace as in the first three months of the year and in line with forecasts in a Reuters poll of economists. ID:nL9N0KU02Q The data came a day after the International Monetary Fund (IMF) cited Britain as a bright spot while it cut its forecast for total global economic growth in 2014. ID:nL2N0PZ1PB Earlier on Friday data showed German business sentiment falling for the third consecutive month, with the Ifo think-tank citing geopolitical tensions as affecting the business climate. Germany has strong trade links with Russia and so could be affected by tougher sanctions over the situation in Ukraine. ECONDE That followed healthier German data on Thursday showing German business activity expanding more rapidly than expected in July, with the services sector growing at its fastest in three years. That gave a boost to the euro, which had hit a 23-month low against the pound on Wednesday. But the euro fell to 79.10 pence, down 0.2 percent on the day EURGBP=D4 and on track for its second straight week of losses. "The GDP report was bang in line with expectations, and as such it doesn't change the outlook policy significantly," said Adam Cole, G10 head of currency strategy at RBC Capital Markets, He expected the Bank of England to hike interest rates by the end of the year. In contrast, the European Central Bank is likely to maintain loose monetary conditions, with many expecting it to opt for quantitative easing later this year. QE is seen negative for the currency as it increases supply and drives down its value. Sterling pared some losses against the dollar after the data and was flat on the day at $1.6985 GBP=D4 . The pound slipped below $1.70 on Thursday for the first time since June after weaker-than-expected retail sales numbers cast some doubt on the case for a swift rise in interest rates. Although the British economy has looked to be recovering strongly this year, June's retail sales added to a run of slightly weaker data. Significantly, wage growth - a key issue for central banks considering raising interest rates - was shown earlier in the month to be lagging inflation. "It doesn't do too much for rate hike expectations though, with some investors recently pushing back their calls for a rate hike to first-quarter 2015," said Alex Edwards, head of corporate desk at UKForex. "The headlines indicate that all is rosy again but it isn't quite with average earnings struggling to keep pace with the improving jobs numbers. It indicates that there is still quite a lot of slack in the economy." GILTS UK gilt futures FLGcv1 were up 40 ticks on the day at 111.17 at 1354 GMT, in line with German Bunds. Ten-year yields GB10YT=RR were 3.8 basis points lower at 2.57 percent and thirty-year yields GB30YT=RR were 2.1 bps lower at 3.29 percent. "We are seeing the long-end give up a bit of ground so we would argue there are some sings of a concession, (that the market is) making room for the linker deal next week," one trader said. Britain's debt management office will next week sell an inflation-linked bond maturing in 2058, via syndication. "The geo-political noise out there is enough to keep us underpinned before the close," the trader said. The gilts market showed little reaction to the GDP data. (Additional reporting by Anirban Nag and Ana Nicolaci da Costa; Editing by Tom Heneghan) ((anirban.nag@thomsonreuters.com, +44 20 7542 8399, Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS STERLING/CLOSE

Energy group Enersis profit slips against strong comparative

July 25, 2014 - reuters.com

SANTIAGO, July 25 (Reuters) - Net profit at Latin American energy group Enersis SA ENE.SN fell more than 40 percent in the first half of 2014, roughly in line with market estimates, against a strong numbers a year ago and currency headwinds. Net profit for the six months to end-June was 191 billion Chilean pesos ($339 million), compared with 322 billion pesos a year earlier and a Reuters estimate of 204 billion pesos. Enersis, which distributes electricity in Chile, Argentina, Peru, Colombia and Brazil, benefited in 2013 from a one-time payment from the Argentine government. A devaluation of the Argentine peso also had a negative impact in 2014, the group said late on Thursday. The Chile-based company, which is controlled by Spain's Endesa ELE.MC , has said it plans to invest $9 billion in South America over the next five years. Its listed energy generation subsidiary, Endesa Chile, END.SN , reported a net profit of 93 billion pesos in the first half, down 7 percent from a year ago, largely because of rising energy costs in Chile. Chile is facing a power crunch, as supply struggles to meet the demands of its crucial energy-hungry copper mining industry. ($1 = 563.6500 Chilean Pesos) (Reporting by Rosalba O'Brien and Anthony Esposito; Editing by Steve Orlofsky) ((anthony.esposito@thomsonreuters.com)(Twitter: @ReutersChile)(+562-2370-4253)(Reuters Messaging: anthony.esposito.thomsonreuters.com@reuters.net)) Keywords: ENERSIS RESULTS/

Sterling firmer vs euro as GDP data highlights diverging fortunes

July 25, 2014 - reuters.com

(Adds quotes, background) By Jemima Kelly LONDON, July 25 (Reuters) - Sterling rose against the euro on Friday after data showed Britain's economy is finally bigger than its pre-crisis size, highlighting the increasingly divergent economic and policy outlooks for the UK and the fragile euro zone. Gross domestic product (GDP) expanded by 0.8 percent in the April-June period, the same strong pace as in the first three months of the year and in line with forecasts in a Reuters poll of economists. ID:nL9N0KU02Q The data came a day after the International Monetary Fund (IMF) cited Britain as a bright spot while it cut its forecast for total global economic growth in 2014. ID:nL2N0PZ1PB Earlier on Friday data showed German business sentiment falling for the third consecutive month, with the Ifo think-tank citing geopolitical tensions as affecting the business climate. Germany has strong trade links with Russia and so could be affected by tougher sanctions on it. ECONDE That followed healthier German data on Thursday showing business activity in Europe's largest economy expanding more rapidly than expected in July, with the services sector growing at its fastest in three years. That gave a boost to the euro, which had hit a 23-month low against the pound on Wednesday. But the euro fell to 79.10 pence on Friday, down 0.2 percent on the day EURGBP=D4 and on track for its second straight week of losses. QE FOR EUROZONE? "The GDP report was bang in line with expectations, and as such it doesn't change the outlook policy significantly," said Adam Cole, G-10 head of currency strategy at RBC Capital Markets, who expects the Bank of England to hike interest rates by the end of the year. In contrast, the European Central Bank is likely to maintain loose monetary conditions and many expect it to opt for quantitative easing later this year. QE is seen as negative as it increases the currency's supply and drives down its value. Sterling pared some losses against the dollar after the data and was flat on the day at $1.6985 GBP=D4 . The pound slipped below $1.70 on Thursday for the first time since June after weaker-than-expected retail sales numbers cast some doubt on the case for a swift rise in UK interest rates. Although the British economy has looked to be recovering strongly this year, June's retail sales added to a run of slightly weaker data. Significantly, wage growth - a key issue for central banks considering raising interest rates - was shown earlier in the month to be lagging inflation. "It (the GDP data) doesn't do too much for rate hike expectations though, with some investors recently pushing back their calls for a rate hike to first-quarter 2015," said Alex Edwards, head of corporate desk at UKForex. "The headlines indicate that all is rosy again but it isn't quite, with average earnings struggling to keep pace with the improving jobs numbers. It indicates that there is still quite a lot of slack in the economy." (additional reporting by Anirban Nag; Editing by Gareth Jones) ((anirban.nag@thomsonreuters.com, +44 20 7542 8399, Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS STERLING/CLOSE

Ugandan shilling rises slightly, more gains seen

July 25, 2014 - reuters.com

KAMPALA, July 25 (Reuters) - The Ugandan shilling UGX= edged up on Friday on the back of banks selling dollars and market participants said it could rise further next week due to inflows from charity groups. At 0952 GMT, commercial banks quoted the shilling at 2,623/2,633, slightly up from Thursday's close of 2,627/2,637. "In the interbank we've seen some significant (dollar)selling which has strengthened the shilling," said Benon Okwenje, trader at Stanbic Bank. "I am expecting strong inflows as we approach the end of month so the shilling should trade marginally stronger next week," he said, citing dollar inflows from non-governmental organisations operating in the country. The shilling is down 3.9 percent against the greenback in the year to date, under pressure from a range of factors, including aid stoppages by donor nations who were angered by the enactment of an anti-gay law earlier in the year. Daniel Muganza, trader at Centenary Bank, said the shilling could benefit from tighter liquidity in the markets after the central bank mopped up excess liquidity on Friday. He said the central bank removed a total of 149 billion shillings ($56.83 million) from the interbank market via a seven-day repurchase agreement (repo). UGX Spot Rate..... UGX= Ugandan Shilling Money Guide.... UGX/1 Calculated Cross Rates.......... UGXX= Deposits..................... UGXDEPO= Deposits & Forwards............. UGXF= Uganda Equities Guide....... UG/EQUITY Uganda All Share Index........ .ALSIUG Shilling background ..... UGX/BKGDINFO Ugandan Debt Guide............ UG/DEBT All Uganda Bonds............. 0#UGTSY= Uganda T-Bills.............. 0#UGTSYS= Uganda Benchmark............. 0#UGBMK= Central Bank ................ BOUGINDEX Ugandan Contributor Index.... UG/CONT1 Uganda Coffee Prices....... COFFEE/UG01 ($1 = 2622.0000 Ugandan Shillings) (Reporting by Elias Biryabarema; Editing by Duncan Miriri and Raissa Kasolowsky) ((Email:elias.biryabarema@thomsonreuters.com)(Tel: +256772887571)(Reuters Messaging: elias.biryabarema.thomsonreuters.com@reuters.net)) Keywords: UGANDA CURRENCY/

EURO DEBT SUPPLY-Italy is the only euro zone bond issuer next week

July 25, 2014 - reuters.com

LONDON, July 25 (Reuters) - Italy will be the only euro zone sovereign bond issuer next week, when it holds two separate auctions on July 28 and July 30. * The first Italian auction will offer up to 4.25 billion euros of 2018 and 2026 inflation-linked bonds and 2016 zero-coupon bonds. Details of the second sale are yet to be released. ID:nR1N0OX01F * The Italian Treasury has cancelled its mid-August auction, as well as its offering of inflation-linked bonds at the end of next month as it sits on ample cash, having completed more than 60 percent of its 2014 funding target. * About 60 billion euros of Spanish and Italian coupon and debt repayments will return to the market next week. (Compiled by Marius Zaharia, editing by Nigel Stephenson) ((marius.zaharia@thomsonreuters.com, +44 207 542 0950, Reuters Messaging: marius.zaharia.thomsonreuters.com@reuters.net)) Keywords: EUROZONE DEBT/OUTLOOK

Belgian business sentiment at nine-month low in July

July 25, 2014 - reuters.com

BRUSSELS, July 25 (Reuters) - Belgian business confidence, a bellwether for the euro zone, fell by more than expected to a nine-month low in July, as confidence among managers in the trade industry fell sharply. The business confidence index, often referred to as the leading indicator, fell to -7.5 from -6.2 in June, the central bank said on Friday, below the average forecast of -6.5 in a Reuters poll of 10 economists. The increase removed the gains made in June, with demand forecasts worse for trade, manufacturing and construction, but up for business-related services, the reverse of what happened the previous month. "The opinion indicators deteriorated sharply in trade, especially demand forecasts and, to a lesser extent, the outlook for orders placed with suppliers and expectations on the employment front," the national bank said in a statement. The fall of confidence among managers in the construction and manufacturing industries was less pronounced. The Belgian number comes just hours after the closely watched German Ifo business climate index also fell to its lowest level in nine months, suggesting firms there are worried about geopolitical tensions. ID:nL6N0Q024K Belgium, the euro zone's sixth-biggest economy and one of its most open, exports a large number of semi-finished goods to Germany. Consumer sentiment in Belgium dropped to its lowest level in 11 months, figures showed last week, with greater fears over the labour market after Belgian food retailer Delhaize DELB.BR announced job cuts. ID:nB5N0MH00F (Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop) ((robertjan.bartunek@thomsonreuters.com)(+32 2 2876850)(Reuters Messaging: robert-jan.bartunek.thomsonreuters.com@reuters.net)) Keywords: BELGIUM ECONOMY/LEADING

UPDATE 2-Russia raises rates in move seen as arming for sanctions

July 25, 2014 - reuters.com

* Key rate hiked by 50 bps to 8 pct * Move said governed by high inflation, geopolitical risks * Russia anticipates more sanctions over Ukraine-analysts (Add analysts' comments, detail) By Alexander Winning and Lidia Kelly MOSCOW, July 25 (Reuters) - The Russian central bank unexpectedly raised interest rates on Friday, apparently preparing for possible further Western sanctions over Ukraine that could speed up capital flight from Moscow's already battered markets. The 28-nation EU has warned it may curb Russian access to capital markets, arms and energy technology in response to last week's downing of a Malaysian airliner in an area of eastern Ukraine held by Russian-backed separatists. ID:nL6N0PZ510 The central bank, in one of its most hawkish decisions in recent years, said the 50-basis points rate hike was governed by concerns about high inflation and geopolitical tensions - an apparent reference to Ukraine. "Inflation risks have increased due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the rouble exchange rate dynamics," the central bank said in a statement. The $2 trillion economy is flirting with recession, recording zero growth in the second quarter, the rouble remains shaky and capital flight has already hit $75 billion this year. "This has nothing to do with inflation - with the economy failing to fire, the central bank should be cutting rates," said Timothy Ash, head of emerging markets strategy at Standard Bank in London. "This is more to do with the central bank raising the defences on the assumption that further Western sanctions are going to follow, hiking capital flight and likely putting downward pressure on the rouble. The bank's decision brings the central policy rate, the one-week minimum auction repo rate, to 8.0 percent, after cumulative rate hikes of 200 basis points in March and April when the rouble and stocks tumbled after the first wave of Western sanctions on Moscow for the annexation of Ukraine's Crimea. "I counted three mentions of the word geopolitical in the central bank statement, I think we can read something into that," said Neil Shearing, chief emerging markets economist at Capital Economics in London. THE MUDDY FUTURE The decision to raise rates is seen as another headwind for domestic investment activity, as it makes borrowing more expensive, and dampens gross domestic product growth, which most analysts envisage at barely above zero this year. But it shows the risks and the price Russia is paying for continued involvement in the Ukrainian conflict, with investment by domestic firms already in decline for most of recent months. Government officials rushed to describe the sanctions impact as "peanuts," but former Finance Minister Alexei Kudrin, esteemed by investors, warned this week Russia had already lost 1 percent GDP growth and might lose more in coming years. "Russia is yet to choose its decision, which it will announce to the world in regard to settling the conflict in Ukraine," Kudrin said in a rare criticism of the conservative policies of the Kremlin. The rouble, which lost 10 percent against the dollar RUBUTSTN=MCX earlier in the year but since recovered, firmed briefly on the central bank's decision, but later traded down 0.2 percent on the day. Stocks on rouble-denominated MICEX .MCX were down 1.5 percent, losing 2.5 percent this week. ID:nL6N0Q01E0 "The move is marginally supportive for the rouble, even though it won't be able to stop foreign capital repatriation if bolder sanctions are approved, while reignited pressure from potential household demand for hard currency would only be addressed if banks continue raising their deposit rates," Dmitry Polevoy, chief economist at ING in Moscow, said in a note. The rouble's spring decline contributed 0.8 of a percentage point to annual inflation, which remains the main worry for President Vladimir Putin's electorate, according to opinion polls. Inflation hit 7.8 percent in June - well above the central banks' forecast of up to 6.5 percent for the whole of 2014. "If high inflation risks persist, the Bank of Russia will continue raising the key rate," the central bank said. "Basically ... we can expect the key rate to go higher if new risks materialise (for, example, introduction of level III sanctions on Russia and the rouble getting seriously hit), which is not beyond imagination," analysts at Gazprombank said in a note. The decision indicates Russia is preparing for what may lie ahead, analysts said. "Maybe the central bank has been given the nod by their political masters in the Kremlin that this crisis is still going to get worse before it gets better," Ash, of Standard Bank said. (Additional reporting by Oksana Kobzeva, Elena Orekhova, Vladimir Abramov, Dasha Korsunskay; Writing by Lidia Kelly; Editing by Timothy Heirtage and Philippa Fletcher) ((lidia.kelly@thomsonreuters.com)(+7 495 775 1242)(Reuters Messaging: lidia.kelly.reuters.com@reuters.net)) Keywords: RUSSIA CENBANK/RATES

UPDATE 2-Russian assets slide as EU sanctions threat looms large

July 25, 2014 - reuters.com

* Stocks, rouble down on concerns of new EU sanctions * Central bank surprises with hawkish rate rise (Recasts to reflect further falls, c.bank rate hike) By Alexander Winning MOSCOW, July 25 (Reuters) - Russian assets slipped on Friday as investors took the view that a possible new wave of European Union sanctions over Moscow's involvement in the Ukraine crisis could cause severe damage to whole sectors of the Russian economy. In a sign policymakers are nervous about the impact of sanctions - which are also being ratcheted up by the United States - the central bank unexpectedly raised its key interest rate by 50 basis points. ID:nL6N0Q02PZ "It's clear that the key factor for market dynamics today is the expectation of EU sanctions. ... All other information is for the moment beyond the border of what's influencing trades," said Artyom Argetkin from BCS brokerage. The dollar-denominated RTS index .IRTS was down 1.5 percent at 1248.3 points at 1200 GMT, while the rouble-based MICEX .MCX traded 1.4 percent lower at 1389.9 points. Russian sovereign dollar bonds fell across the curve on the sanctions fears, while the rouble weakened slightly against the dollar, despite being boosted by the central bank rate decision and the end-of-month tax period. Ambassadors of the 28-nation EU are discussing options to curb Russian access to capital markets, arms and energy technology in response to last week's downing of a Malaysian airliner in an area of eastern Ukraine held by Russian-backed separatists. ID:nL6N0PZ510 The EU is also expected to expand its list of those targeted by sanctions including asset freezes on Friday due to Moscow's perceived backing of the pro-Russian separatists fighting Ukrainian government forces. Earlier, the United States said Russia was firing artillery across its border, targeting Ukrainian military positions, and that Moscow intends to deliver heavy weapons to separatist forces. ID:nL2N0PZ2AH Russia's $1.5 billion 2043 dollar bond 78307ADH3= fell almost 2 cents while the 2030 issue XS011428878=TE fell half a cent. Russian yield spreads over U.S. Treasuries widened 7 basis points to 285 bps on the EMBI Global index 11EML . ID:nL6N0Q038D The rouble, meanwhile, was down 0.08 percent against the dollar RUBUTSTN=MCX to trade at 35.07 but strengthened 0.08 percent versus the euro EURRUBTN=MCX to 47.16. "Markets-wise, the [central bank] move is marginally supportive for the rouble, even though it won't be able to stop foreign capital repatriation if bolder sanctions are approved," Dmitry Polevoy, chief economist for Russia and CIS at ING bank. The Russian currency was 0.03 percent weaker at 40.51 against the dollar-euro basket RUS=MCX the central bank uses to gauge the rouble's nominal exchange rate. Investors pulled $172 million from Russia-dedicated funds between July 17 and 23, the largest outflow since January, analysts at VTB Capital said in a note, citing data from Emerging Portfolio Fund Research released on Friday. For rouble poll data see FXRUB FXEURRUB FXRUS For Russian equities guide see RU/EQUITY For Russian treasury bonds see 0#RUTSY=MM Russia in graphics: http://link.reuters.com/dun63s (Additional reporting by Olga Popova in Moscow and Sujata Rao in London; Editing by Lidia Kelly and John Stonestreet) ((alexander.winning@thomsonreuters.com)(+7 495 775 1242)(Reuters Messaging: alexander.winning.thomsonreuters.com@reuters.net)) Keywords: RUSSIA MARKETS/

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

July 25, 2014 - reuters.com

STOCKS .BSESN .NSEI ----------------------- The benchmark BSE index ended down 0.55 percent and the broader NSE index 0.51 percent lower, as investors took profits in blue-chips. .BO GOVERNMENT BONDS IN088323G=CC -------------------------------- The benchmark 10-year 2023 bond yield ended 2 bps higher at 8.67 percent, compared with its previous close, as dealers prepared to shift to the new 10-year benchmark paper, while concerns remained about tight liquidity conditions. IN/ RUPEE INR=D2 -------------- The partially convertible rupee ended higher at 60.1025/1125, compared with Thursday's close of 60.12/13, as heavy dollar demand from importers to meet month-end commitments was offset by greenback sales from custodian banks, continuing a pattern of largely range-bound trading. INR/ INTEREST RATE SWAPS INROIS MIOIS= ------------------------------------- The benchmark five-year swap rate ended up 2 bps at 7.89 percent, while the one-year rate closed unchanged at 8.40 percent. CALL MONEY INROND= --------------------- India's cash rate ended at 8.40/8.45 percent compared with Thursday's close of 9.00/9.10 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)(Reuters Messaging: dipika.lalwani.thomsonreuters.com@reuters.net)) Keywords: INDIA SNAPSHOT/

UPDATE 2-Ireland keen to repay bailout loans early - minister

July 25, 2014 - reuters.com

* Paying loans back early attractive for Ireland - minister * Ireland borrowing on markets at lower rate than IMF loans * Irish finance ministry says all options being looked at (Recasts with comments from minister) By Padraic Halpin DUBLIN, July 25 (Reuters) - Ireland would like to secure agreement from its European Union partners to allow it to repay some of its bailout aid early and reduce the cost of carrying its debt, a government minister said on Friday. Enterprise Minister Richard Bruton made the comments after the Irish Times reported that Ireland was taking soundings on whether its EU partners would allow it to repay the loans provided by the International Monetary Fund ahead of schedule. "That certainly would be attractive. Ireland is able to borrow at very low rates and if we can take advantage of that to reduce the cost of carrying debt that would be in Ireland's interests," Bruton told reporters when asked if Dublin was looking to pay off some of its loans early. "That's what we do at every opportunity - seek to find the cheapest possible lending sources and no doubt we would like to secure that agreement." Paying off the IMF portion of the bailout debt early would allow Ireland to cut its debt servicing costs but could in theory penalise other EU states by making them wait longer for repayment of funds they granted. Irish Finance Minister Michael Noonan said earlier this month he was considering how Ireland could repay the IMF loans early, but that such a move would also trigger early repayment of EU funds. Ireland, which completed its three-year EU/IMF aid programme last year, returned to bond markets in January 2012 and borrowed 10-year debt at a record low of 2.32 percent last month. ID:nL6N0PL26B Its IMF loans have an average maturity of seven years and are due to be paid back in instalments from July 2015 to December 2023. Their average interest rate exceeds 4 percent. The repayment schedule on the EU loans, which carry lower rates of interest, was initially similar. But member states agreed to extend the maturities last year. Officials in Dublin have been assessing the appetite among member states to sanction early repayment of only the IMF funds before a formal application seeking a sign-off from EU countries is made, the Irish Times said, without citing sources. The possible benefit to Ireland of such a refinancing could be up to 600 million euros, Goodbody Stockbrokers chief economist Dermot O'Leary said in a note. The finance ministry said all options were being looked at regarding debt sustainability but no decision had been made. "Technical issues are considered as a matter of course," a ministry spokesman said in a statement. "This review process can include contact with other authorities to assess that their understanding of the position on the loans is the same as ours." A spokesman for the European Commission said Ireland had so far not submitted any request for early repayment of loans granted under the EFSM rescue fund. (Additional reporting by Julia Fioretti in Brussels, editing by John Stonestreet and Raissa Kasolowsky) ((padraic.halpin@thomsonreuters.com)(+353 1 500 1529)(Reuters Messaging: padraic.halpin.thomsonreuters.com@reuters.net)) Keywords: IRELAND EU/IMF

UPDATE 2-African Barrick Gold looks beyond savings target

July 25, 2014 - reuters.com

* Raises full-year production target to more than 700,000 ounces * Aims to save more than $185 mln by year-end - CEO * First-half net profit $40.8 mln vs year-earlier loss * Shares rise as much as 5 pct (Adds CEO comments, background, updates share price) By Karen Rebelo July 25 (Reuters) - African Barrick Gold Plc ABGL.L expects to push beyond its savings target of $185 million by the end of the year as it cuts costs at its Tanzanian mines in response to low gold prices. African Barrick's shares, which have more than doubled in the last year, rose as much as 5 percent on Friday after the FTSE-250 company also raised its full-year production forecast. Many gold and silver miners were forced to shelve new projects and slash costs last year after prices of the precious metals fell to their lowest in a decade. Gold XAU= fell 28 percent and silver XAG= plunged 36 percent in 2013. "The new norm for the industry is cost control," African Barrick Chief Executive Brad Gordon told Reuters in an interview. African Barrick launched an operational review in early 2013, focusing on boosting output and cutting costs after its majority owner, Barrick Gold Corp ABX.TO , was unable to sell the business to a Chinese company. Gordon said the company was on track to meet, or possibly surpass, its publicly stated cost-savings target of $185 million without the need to sell any of its three operating mines. "We're on a run rate of $175 million by the end of this year. We expect that that will continue to improve," he said. "The number we are targeting internally is $200 million of saving by the end of this calendar year." Cost cuts will continue beyond this year. "There are still some opportunities to reduce our overall workforce," Gordon said. "There are still improvements to gain from changing the mining methods ... particularly at Bulyanhulu, where we're changing the mine completely to a mechanised system rather than a hand-held system, which is a lot safer." Expected production from the upper east zone at Bulyanhulu, one of African Barrick's three mines in northern Tanzania, was a factor in the company raising its full-year production forecast to more than 700,000 ounces from 650,000-690,000 ounces. Production rose 13 percent to 346,581 ounces in the six months ended June 30. The average realised gold price for the six months fell to $1,290 per ounce from $1,480 per ounce a year earlier. ID:nPRrP1710a African Barrick posted a profit of $40.8 million for the first half of 2014, compared with a year-earlier loss, when it took a writedown of $727 million on the value of some of its mines. ID:nL6N0G01EP The company declared an interim dividend of 1.4 cents. African Barrick's shares were up 3.9 percent at 263.8 pence at 1130 GMT on the London Stock Exchange. (Editing by Ted Kerr, Gopakumar Warrier and Robin Paxton) ((karen.rebelo@thomsonreuters.com)(within UK +44 20 7542 1810)(outside UK +91 80 6749 1136)(Reuters Messaging: karen.rebelo.thomsonreuters.com@reuters.net)) Keywords: AFRICAN BARRICK GOLD RESULTS/

London gold fix company appoints committee to oversee benchmark

July 25, 2014 - reuters.com

* Gold fix company to detail new code of conduct * New administrator, chairperson sought for gold fix * RFP process unlikely to be launched before new silver fix starts By Clara Denina LONDON, July 25 (Reuters) - The company operating the gold price 'fix' has appointed a supervisory committee to oversee the century-old system of benchmarking gold prices ahead of the implementation of stricter regulations, its website showed on Friday. The London Gold Market Fixing Ltd's new board is made up of compliance officers at the four banks that currently set the twice-daily auction process over the telephone. The appointment of the committee comes after the company said this month it was seeking a third party to take over administration of the process. ID:nL6N0PR2OF Other changes, which will include a new code of conduct for participants and the appointment of an independent chairperson, are widely seen as the first steps toward a move to an electronic platform which will broadcast it to a wider audience. A similar process to find a new price benchmark administrator recently took place in the silver market. That yielded an electronic auction mechanism to replace a daily conference call with just three banks. ID:nL6N0PL4ZL The gold fixing company said it would launch a request for proposal (RFP) process to find the new administrator for the benchmark. Two sources close to the matter said that this is unlikely to start before market participants see the new silver process get under way from August 15. Bank of Nova Scotia BNS.TO , HSBC HSBA.L , Societe Generale SOGN.PA , and Barclays BARC.L operate the gold fixing, while Deutsche Bank DBKGn.DE stopped in May after two decades. The new committee will promote the implementation of a code of conduct and will devise a process for reviewing the conduct of the fixing by including post review of the recordings and scrutiny of the submission process, the company said on its website. It will also be responsible for assessing any potential conflict of interest or complaints about the fixing process. SCRUTINY INCREASES Regulators across Europe and the United States have scrutinised financial benchmarking processes following the Libor manipulation case in 2012 and firms have been fined billions of dollars. ID:nL5N0JJ1NE Although market participants view many aspects of the existing gold process favourably, reforms still need to comply with the 19 principles on financial benchmarks outlined in July 2013 by the International Organization of Securities Commissions (IOSCO), an umbrella group of market regulators. The first phase of the IOSCO principles, which all benchmarks should follow, ends in July. IOSCO has six months to decide if any further action is appropriate, based on the take-up of the benchmark administrators to these principles, the regulator said. The new committee will recommend reviews of the gold fixing process to make sure it is compliant with the IOSCO principles, it said. The London Gold Market Fixing Ltd was founded in 1994 but only since 2011 have organisations wishing to reproduce or utilise gold fixing data been required to purchase a licence from the company. (Editing by Susan Thomas and Jason Neely) ((clara.denina@thomsonreuters.com)(+44 207 542 9420)(Reuters Messaging: clara.denina.thomsonreuters.com@reuters.net)) Keywords: GOLD FIX/

Asia Gold-Indian premiums drop on excess supply, weak demand

July 25, 2014 - reuters.com

By Siddesh Mayenkar and A. Ananthalakshmi MUMBAI/SINGAPORE, July 25 (Reuters) - Premiums on gold in India nearly halved in the latest week as higher supplies and low domestic demand in a seasonally slack period weighed, while appetite for the precious metal in rest of Asia picked up slightly as prices dipped below $1,300 an ounce. Premiums in India, the world's second-biggest gold buyer, fell on Friday to $5-$6 an ounce on London prices, against $10 quoted last week, traders said. Premiums struck a record $160 an ounce in December last year. "There's carry forward stock from June, and because of low demand, supply is available," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation. Demand is generally low during the monsoon period. Festivals will re-start in September and continue till November. India is estimated to have imported 100 tonnes of gold in June, about twice the normal average after private agencies were allowed to import the metal. Imports may be about 40-50 tonnes in July and August, Bamalwa said. However, traders will have to live with a record 10 percent import duty, as the government does not have a proposal to end it currently under consideration, the country's junior finance minister has said. ID:nD8N0PQ03O India, desperate to trim a gaping current account deficit, took several measures last year to curb demand for bullion, its second-biggest import after oil. Besides the duty imposed by the finance ministry, the Reserve Bank of India also imposed the so-called 80-20 rule that requires a fifth of all bullion imports to be re-exported. REST OF ASIA Buying interest for physical gold picked up slightly in Asia this week as prices dipped below $1,300 an ounce. "We saw some interest once prices fell below $1,300," said one dealer with a bullion bank in Singapore. "However, the volumes were not big as buyers believe there are more declines to come. There are no issues with supply right now as demand is quiet, so premiums have been very stable," the dealer said. Premiums to the global benchmark were steady at around $1 in Hong Kong and Singapore. Tokyo prices swung to a small premium from a discount earlier this month. GOLD/ASIA1 In top buyer China, prices were at a premium of about $3, up from flat rates last week. (Editing by Muralikumar Anantharaman) ((siddesh.mayenkar@thomsonreuters.com)(+91-22-61807163)(Reuters Messaging: siddesh.mayenkar.thomsonreuters.com@reuters.net)) Keywords: GOLD PHYSICALS/ASIA

INDICATORS - Kazakhstan - July 25

July 25, 2014 - reuters.com

Vietnam domestic market commodity prices-July 25

July 25, 2014 - reuters.com

July 25 (Reuters) - Following are domestic prices of Vietnam's key commodities. Unit: million dong VND= per tonne. Item July 21-25 July 14-18 Location Robusta beans 38.9-40.3 38.8-40.0 Central Highlands Cocoa 57.7-58.2 57.8-58.4 Daklak Black pepper 180.0-185.0 172.0-177.0 Southern region Refined sugar 13.0-15.5 13.0-15.5 Southern region Summer-autumn paddy 5.20-6.30 5.40-5.90 Mekong Delta ___________________ SJC gold 3.668-3.687 3.672-3.695 Hanoi, HCM City NOTES: Gold prices are low/high selling prices quoted in million dong during the week by top manufacturer SJC per 3.75-gram ingot. Coffee export prices COFFEE/ASIA1 Rice export prices RICE/ASIA1 Historical data VNCOMM01 Central bank's gold auction SBVGOLD2013 ($1=21,200 dong) (Compiled by Hanoi Newsroom) ((ho.minh@thomsonreuters.com; +844 3825 9623)) Keywords: VIETNAM COMMODITIES/PRICES

India Morning Call-Global Markets

July 25, 2014 - reuters.com

EQUITIES NEW YORK - U.S. stocks finished a quiet session mostly flat on Thursday as earnings painted a mixed picture of the economy, though the S&P 500 set another record closing high. The Dow Jones industrial average .DJI dipped 2.83 points or 0.02 percent, to close at 17,083.80. The S&P 500 .SPX gained 0.97 of a point or 0.05 percent to end at 1,987.98, its second record closing high in a row. The Nasdaq Composite .IXIC shed 1.59 points or 0.04 percent, to finish at 4,472.11 For a full report, click on .N - - - - LONDON - Britain's main equity index pushed forward on Thursday, as gains at media company Reed Elsevier REL.L helped offset a slump in home improvements retailer Kingfisher KGF.L . The FTSE 100 .FTSE closed up 0.3 percent, or 23.31 points, at 6,821.46 points. For a full report, click on .L - - - - TOKYO - Japan's Nikkei share average rose on Friday after the S&P 500 set another record closing high and as index heavyweight Fanuc Corp 6954.T jumped after reporting strong profits. The Nikkei .N225 rose 0.6 percent to 15,377.00 points by mid-morning, after falling 0.3 percent on the previous day. For a full report, click on .T - - - - HONG KONG - Hang Seng Index .HSI set to open up 0.4 percent. For a full report, click on .HK - - - - FOREIGN EXCHANGE SYDNEY - The dollar held gains versus the yen on Friday and the euro stood steady after rebounding from an eight-month low against the greenback as data painted a brighter picture of the U.S. and eurozone economies. The dollar was little changed at 101.76 yen JPY= after gaining more than 0.3 percent overnight to a two-week high of 101.86 after weekly U.S. filings for first-time jobless benefits fell to the lowest level since early 2006. For a full report, click on USD/ - - - - TREASURIES NEW YORK - U.S. Treasury debt prices fell on Thursday after data showed jobless claims in the world's largest economy dropped to their lowest in more than eight years, although losses may be limited by safe-haven buying given tensions in the Middle East and Ukraine. Yields, which move inversely to prices, on benchmark U.S. 10-year notes and 30-year bonds rose to one-week highs after the data, with the 10-year climbing above a pivotal 2.50 percent. For a full report, click on US/ - - - - COMMODITIES GOLD SINGAPORE - Gold retained sharp overnight losses to trade near a five-week low on Friday and was headed for a second straight week of losses, as strong global economic data offset the metal's safe-haven appeal. Spot gold XAU= was little changed at $1,292.10 an ounce by 0243 GMT, after losing nearly 1 percent on Thursday. The metal hit $1,287.46 in the previous session - its lowest since June 19 - before recovering slightly. For a full report, click on GOL/ - - - - BASE METALS SYDNEY - London copper edged down on Friday but was still set to log its fifth weekly advance in six, as investors grow more positive towards metals given encouraging signs of economic revival and a brighter outlook for China in particular. Three-month copper on the London Metal Exchange CMCU3 edged down by 0.2 percent to $7,155.75 a tonne by 0049 GMT, after gains of 1.7 percent in the previous session when it hit its loftiest level since July 14 at $7,175 a tonne. For a full report, click on MET/L - - - - OIL NEW YORK - Oil futures prices fell on Thursday as unseasonably weak demand and plentiful supplies of crude and refined products offset strong Chinese factory data that could presage higher energy demand in the world's No. 2 oil consumer. Brent for September delivery LCOc1 lost 96 cents to settle at $107.07 a barrel, after closing 70 cents higher on Wednesday. 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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