Monday, March 25, 2013

Japan 10-Year Bond Yield lowest in almost a decade

Japan’s bonds rose, sending 10-year and 20-year yields to the lowest in almost a decade, amid speculation Bank of Japan (8301) Governor Haruhiko Kuroda will use parliament testimony tomorrow to outline new easing steps.

The extra yield investors demand to hold 10-year bonds instead of 3-year notes narrowed to the least since June 2003 on prospects the BOJ will buy longer-dated securities. At his inaugural press conference as BOJ chief last week, Kuroda reiterated a pledge to achieve a 2 percent price target. The 30- year yield dropped to a 2 1/2-year low.

The yield on the benchmark 10-year note touched 0.55 percent, the lowest since June 2003, before trading unchanged at 0.555 percent as of 3:30 p.m. in Tokyo, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The all-time low for the 10-year rate is 0.43 percent, also reached in June 2003.

The 20-year rate fell 4 1/2 basis points, or 0.045 percentage point, to 1.44 percent, after earlier touching 1.43 percent, the least since July 2003. Yields on 30-year bonds dropped six basis point to 1.55 percent, a level unseen since August 2010.

Fewer US tax payer expect refunds this year

CNN reported that fewer Americans are expecting the financial boost of a tax refund this year.

About 1,500 adults were surveyed by American Express, 59% of respondents said they expect a refund check this year, down from 64% last year. Also, 19% expect to owe money come tax time, it was just 13% in 2012. And nearly 30% of respondents with a household income greater than $100,000 said they expect to owe the IRS this year.

The growing number of people who owe taxes is likely a sign that the economy is improving, said Will McBride, chief economist at the Tax Foundation, a nonprofit research group.

Of those who will owe money, most said they would pay with cash from their checking or savings account. But nearly 15% said they would pay with a credit card, up from 7% last year.

Of those expecting a refund, 37% plan to use it to pay down debt or bills, while 26% plan to save the money. Only 28% said they expect to spend their refund check on themselves or family, travel, home improvements or a big-ticket item.

The coveted refund checks, which averaged about $2,700 last year, should come in handy as consumers deal with smaller paychecks after a two-year payroll tax "holiday" expired this year.

Monday, March 18, 2013

Oil plunges as dollar gains on Cyprus news

LOS ANGELES — Crude-oil futures tumbled in electronic trading Monday, slapped lower by a surge in the dollar as worries spiked over a Cyprus bank levy and its implications for Europe.

Crude oil for April delivery  plunged $1.04, or 1.1%, to $92.41 a barrel during East Asian trading hours, more than erasing its 42-cent gain Friday on the New York Mercantile Exchange.

Similarly, London-traded rival benchmark Brent crude saw its May contract  retreat $1.27, or 1.2%, to $108.55 a barrel, burying its 86-cent advance on Friday.

The moves followed a surprise announcement Saturday by the government of Cyprus that a levy will be imposed on private bank deposits at the nation’s lenders as part of the country’s bailout program.

The move — and its possible implications for other financially strapped euro-zone nations — sent global financial markets into a frenzy, with Asian stocks and U.S. index futures dropping sharply while the dollar surged.

By midday in East Asia, the ICE dollar index  — a measure of the greenback against six rival units — had risen to 82.791, up significantly from 82.277 in North American trade on Friday.

A rising dollar tends to depress crude-oil prices, which are denominated in the U.S. currency, as it makes the commodity more expensive for holders of euros, yen and other units.

While some analysts had tied oil’s moves earlier in the year to the performance of equity markets, particularly in the U.S., Citi Futures analysts said in note late Friday that action for the dollar had now become a bigger factor for crude.

“In terms of the oil market’s habitual correlations, the recent price action — both on the way down and in Friday’s recovery — was the inverse relationship with the U.S. dollar rather than the leadership of the S&P 500.” they wrote.

Other energy futures mostly tracked the selloff in crude, as April gasoline  gave up 4 cents for a 1.2% drop to $3.13 a gallon, while April heating oil  saw a 3-cent retreat, about 1%, to $2.91 a gallon.

April natural gas  went the other way, however, rallying 5 cents, or 1.2%, to $3.92 per million British thermal units. The gain extended a 6.7% advance the previous week, helped by a larger-than-expected drop in U.S. natural-gas inventories for the week ended March 8.

China to invest $2 billion in IADB Latin America investment fund

(Reuters) - China will invest $2 billion to back Interamerican Development Bank (IADB) public and private sector projects in Latin America and the Caribbean, the development bank said on Saturday.

The contribution by the People's Bank of China will be used to co-finance up to $500 million in IADB public sector loans and up to $1.5 billion in private sector credit, available over the next three to six years, the IADB said in a news release.

The goal of the fund was to alleviate poverty and boost competitiveness.

China has invested tens of billions of dollars in the region, from Mexico to Argentina, over the last decade to acquire strategic assets or companies in sectors such as oil, minerals and food products.

Last March, China's export-import bank and the IADB announced a joint $1 billion dollar fund for private and public sector investment in the region, reflecting the country's eagerness to link up with prominent institutions in the region.

(Writing by Tomas Sarmiento and Alexandra Alper; Editing by Doina Chiacu)

Tuesday, March 12, 2013

Illinois Is Accused of Fraud by S.E.C.

For the second time in history, federal regulators have accused an American state of securities fraud, finding that Illinois misled investors about the condition of its public pension system from 2005 to 2009.

In announcing a settlement with the state on Monday, the Securities and Exchange Commission accused Illinois of claiming that it had been properly funding public workers’ retirement plans when it had not. In particular, it cited the period from 2005 to 2009, when Illinois also issued $2.2 billion in bonds.

full story:

Euro Weakens

Euro Weakens

The euro weakened and European stocks extended a retreat from a 4 1/2-year high before reports forecast to show weaker manufacturing data in the region.

The euro declined 0.3 percent versus the dollar as of 8:18 a.m. in London, and fell against most of its 16 major peers. The Stoxx Europe 600 Index slid for a second day, down 0.1 percent.

European Union leaders will meet in Brussels for a summit on March 14-15 to discuss rescue plans for Cyprus.

Tuesday, March 5, 2013

Facebook new lawsuit

Facebook has been hit with a new IPO suit. An early investor files a new case against the social network saying, "The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors."

Reuters reported that Investor Gaye Jones filed a new case against Facebook Chief Executive Mark Zuckerberg and the company's underwriters.

Facebook said in a statement that "we believe this lawsuit is without merit and will defend ourselves vigorously."

Shares in Facebook's highly anticipated IPO fell from the initial price of $38 to about $25 within a month. The stock closed on Monday at $27.72 on Nasdaq, down 6 cents.

Soon after the IPO, which was also marked by technical glitches on the Nasdaq exchange, more than 50 investor lawsuits were filed. A proposed class action is being heard in federal court in Manhattan.

The lawsuit was filed in the Court of Chancery in Delaware, where Facebook is incorporated, and also named as defendants the IPO underwriters - units of JPMorgan Chase & Co, Morgan Stanley and Goldman Sachs Group Inc.