Japan: Standard & Poor's today cut the outlook on its long-term rating on Japan to negative from stable, citing the risk of a downgrade if the country's massive earthquake causes its fiscal situation to deteriorate substantially more than it expects.
S&P said it estimated reconstruction costs after
the March 11 devastating earthquake, tsunami and nuclear disaster at ¥20trn to
¥50trn ($245bn to $613bn), with a central forecast of ¥30trn.
Johnson & Johnson: The US healthcare
products firm is to acquire Swiss medical-device maker Synthes for $21.3bn,
giving J&J a big lead in the global market for surgical devices used to treat
fractures and traumatic injuries.
PlayStation: Sony has warned over 70m
users of its PlayStation Network that their personal information, including
credit card details, may have been stolen.
Barclays Bank: UK bank Barclays today reported profit in Q1 2011 dipped 9% from
a year ago as income at its investment banking arm dropped.
Japan Will See A V-Shaped Recovery: Takuji Okubo, Japan chief economist, global economics research at Société Générale thinks that the Bank of Japan will only hike rates in 2015:
Credit Suisse: Switzerland's No. 2 banking giant today reported a 45% drop in Q1
earnings as it took a CHF 617m Swiss francs charge (€481m) for valuation losses
on debt and derivative liabilities.
BP: BP Plc,
Europe’s second-biggest oil company, reported today that profit declined 4% in
Q1 after it sold off more than $24bn of assets to help pay for the Gulf of
Economic View: Bond markets continue to take a dim view of peripheral prospects; Goodbody chief economist, Dermot O’Leary, comments - - "Bond markets continue to give a resounding negative reaction to the rescue efforts for Greece, Ireland and Portugal, with yields hitting record highs again yesterday. The most notable moves have been in Greece, where the two-year yield is now standing at 24.3%.
However, the Irish two-year yield rose to over 12% for the first time yesterday, while the Portuguese two-year stands at 11.3%. All rates are a long way from being described as sustainable which captures the market’s perception of the sustainability (or unsustainability) of debt levels in these countries. Although volumes are thin over the Easter holidays, the latest deterioration was triggered by comments to the effect that a Greek restructuring is inevitable by an advisor to Chancellor Merkel (Lars Feld) and the release of the official debt/deficit data for 2010 by Eurostat yesterday.
Not for the first time, the Greek deficit came
in higher than expected at 10.5% of GDP, with debt levels now standing at 143%
of GDP. The Irish deficit stood at 32.4% of GDP last year, or 12.2% when one
excludes the cost of the banking recapitalisations. The debt level stood at 96%
of GDP at the end of last year. Portugal’s deficit and debt level stood at 9.1%
and 93% of GDP, respectively.
Brazil: Inside the World's Biggest Brewer :CNBC's Maria Bartiromo goes inside the world's biggest brewery, with Carlos Brito, AB InBev CEO, in a wide-ranging conversation on Brazil's economic outlook:
UK GDP to expand in Q1, but underlying growth remains weak: Davy economist, Conall Mac Coille, comments -- "UK GDP for the first quarter of 2011 will be released at 09.30 this morning. The market expects the data to show that the UK economy expanded by 0.5% in the first quarter. This is clearly a robust rate of growth, but UK GDP fell by 0.5% in the final quarter of 2010. The UK Office for National Statistics estimated that bad weather in December pushed down on UK GDP in Q4 by 0.5%. If correct, this means that the underlying GDP growth rate, excluding the impact of the weather, was zero. Hence, the temporary negative impact of the bad weather onto the level of UK in Q4 will flatter the Q1 GDP growth rate released today.
So the market's expectation for Q1 GDP growth of 0.5% implies that activity in the UK economy was flat across Q4 2010 and Q1 2011. The Purchasing Managers Indices for the UK indicate that GDP growth was a little stronger at around 0.6% on the quarter. However, if there is a stronger weather-related bounce-back, growth could be considerably stronger. It is worth remembering that even if UK GDP increased by 1% in Q1, this would still imply a weak underlying growth rate across Q4 2010 and Q1 2011.
All in all, there is considerable uncertainty around today's GDP release because of the impact of the bad weather in Q4, but the market's expectation is a relatively pessimistic one. If the market's expectation is disappointed, this would imply that the UK economy contracted across the last two quarters. A poor number would clearly push out expectations for a rate rise by the Bank of England and put downward pressure on the pound.
Markets will also focus on Federal Reserve Chairman Ben Bernanke's first press conference at 19.15 this evening following the Federal Open Market's Committee meeting. It is likely that Bernanke will reinforce expectations that a tightening monetary policy is not likely in the near future from the Fed. If so, there may be positive market reaction once markets open in Europe tomorrow morning."
In New York Tuesday, the Dow rose 115 points or 0.93% to 12,595.
The S&P 500 added 0.90% and the Nasdaq advanced 0.77%.
The MSCI Asia Pacific Index rose 0.7% Wednesday.
Japan's Nikkei 225 gained 1.39%; China's Shanghai composite index fell 0.49%; Australia's S&P/ASX 200 dipped 0.83% and the Bombay Stock Exchange's Sensex index dropped 0.25% in Mumbai.
In Europe, the Dow Jones Stoxx 600 is up 0.04% in early trading Wednesday.
The ISEQ has risen 0.18% in Dublin.
CRH is up 0.48%; Elan has dipped by 1.56%; AIB is off 1 cent or 4.17% while IL&P is up 1 cent or 5.63%.
The euro is trading at $1.4663 and at £0.8910.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
On Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session losing streak.
On Tuesday this week, the BDI slipped 4 points or 0.32% at 1,250.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is almost $12.
The spot price of an oz of gold is trading in New York at $1,505.50, down $1.60 from Tuesday's close.
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