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UK Prime Minister David Cameron welcomed Chinese Vice-Premier Li Keqiang to Number 10 Downing Street, as part of a four-day visit to the UK, Jan 10, 2011.
foreign-exchange reserves rose to a new record in the fourth quarter of 2110
according to the Peoples's Bank of China today.
The currency holdings, reported by the central bank on its website, added $199bn
in the quarter to to US$2.85trn - - the biggest quarterly gain since Bloomberg
data began in 1996.
In 2005, China's foreign exchange reserves were valued at $769bn and in 1995
were valued at $74bn.
Global accord targets credit bubbles:
The Financial Times
reports that banking regulators have quietly taken a major step towards
harmonised global regulation by agreeing to raise worldwide capital requirements
whenever an individual country declares a credit bubble.
The FT says part of the larger “Basel III” banking reform package, the
“countercyclical capital buffer” heralds a step change in the way national
banking regulators interact and is the first concrete example of
“macroprudential” regulation that seeks to moderate the economic cycle.
Poor UK retail sales in December: Davy economist, Conall Mac
Coille, comments - - "Today's report from the British Retail
Consortium (BRC) suggests that December was a gloomy month for the
retail sector. On an annual basis, the BRC report indicates that
retail sales fell in nominal terms by 0.3% compared with a year
earlier, down considerably from the 0.7% rise reported in November.
The BRC indicated that the unusually poor weather in December may
have held back consumers during the Christmas period so that retail
However, it is not clear if all of the weakness in retail
sales can be attributed to poor weather. Consumers will have been
aware that the rate of value added tax was scheduled to rise to 20%
in January and may therefore have brought forward some of their
spending. This makes the weak numbers from the BRC report all the
more surprising. Also, the BRC numbers follow the release of the
Census of Industrial Production figures for services (excluding
retail sales) and construction which indicate that overall output in
the UK economy may have contracted in December.
So it may be that the softening in UK growth that is expected
in 2011 is now being reflected in the BRC numbers as households
begin to realise that the impact of the coalition government's
fiscal adjustment will be felt in 2011. This probably means that the
Monetary Policy Committee of the Bank of England is more likely to
leave policy rates on hold this week at its next meeting."
Stephen King, global chief economist at HSBC, discusses the Fed's role in fueling inflation outside of the United States, with CNBC's Oriel Morrison:
Economic View; Been here before; Goodbody chief economist, Dermot O’Leary,
comments -- "We are getting a deep sense of deja-vu with the emerging
situation in Portugal. Prior to Ireland applying for aid from the IMF/EU last
November, market rumours were rife that Ireland was about to avail of external
aid, but this was strenuously denied by Irish and European policymakers.
Speculation has been building in the market at the start of this year that
Portugal will be next in line to request aid, with the major trigger for that
speculation the continued rise in Portuguese bond yields to well above rates
that would be paid on an aid package from the IMF/EU (although Portuguese
10-year yields did fall to 6.94% yesterday). The response from the Portuguese
government has, unsurprisingly, been to deny that any aid request is
It is not Ireland, they say. Ireland was not Greece! German Chancellor
Merkel weighed in yesterday saying that nothing will be imposed on any country
and that it is a 'free decision for each country' to request the funding that is
available. This comes to the nub issue. The structure of the European Financial
Stability Fund (EFSF), in particular, dictates that countries need to request
the aid themselves. In the Irish case, it was effectively the ECB putting its
foot down in relation to the amount of funding it was giving to the Irish banks
that forced Ireland into requesting the aid package.
The funding problems for the Portuguese banks are not as acute so it is
possible that Portugal can muddle through for longer, while paying high interest
rates for its sovereign funding. A test of this will be the auction tomorrow.
Although the reports of ECB buying sent bond yields in all the peripherals down
yesterday, the experience of Ireland and Greece in 2010 suggests that this may
be just temporary relief."
Insight on whether the crash of Bangladesh stock exchange will continue to cause fear in emerging markets, with Ronald Weiner, RDM Financial Group and Tom Lydon, ETF Trends:
The Dow closed down 37.31 points, or 0.3%, at 11637.4 on Monday. Chemical
giant DuPont fell 1.5% after agreeing to acquire Denmark's Danisco, an enzyme
and food-ingredients company, in a $6.3bn deal.
The Nasdaq Composite rose 4.63, or 0.2% to 2707.80. The Standard & Poor's 500
stock index fell 1.75, or 0.1% to 1269.75.
Aluminum giant Alcoa kicked-off the fourth quarter earnings season with earning
per share (EPS) of 21 cents, beating the consensus expectations of 19 cents.
"China and the United States realize their bilateral relationship is a very important bilateral relationship, they certainly do not want to see a sharp deterioration in their ties," Joseph Y.S. Chang, professor at City University of Hong Kong told CNBC:
The MSCI Asia Pacific
was little changed Tuesday, gaining less than 0.1%.
Nikkei 225 dipped 0.29%; China's Shanghai Composite rose 0.44%; Australia's S&P/ASX
200 Index fell 0.03% and India's Sensex added 0.73%.
spot price of an oz of gold is trading in New York at $1,377.10, up $1.10 from
Bank of Ireland (Closing Price €0.31): BOI completes small
disposal/Possibly considering debt for equity swap;
Goodbody's Eamonn Hughes comments - -"Bank of Ireland yesterday announced that it has completed the disposal of its
asset management operation to State Street Global Advisors for a €57m cash
consideration. This follows the earlier October announcement of the transaction.
The sale generated €40m of equity tier 1 capital for the bank and while the bank
says the deal represents a significant milestone in relation to the execution of
its EU restructuring plan, we would categorise it as a more modest contributor
to capital , at less than 2% of the revised capital target set by the regulator.
In addition, we would envisage higher capital requirements again in the upcoming
Q1 PCAR assessment. Speaking of which, Bloomberg carried a story yesterday that
BOI is said to be considering a junior debt for equity swap. Presumably all
options on a capital raising exercise are on the table at the moment.
that BOI has about €0.7bn of junior subordinated debt outstanding and the
comments from “informed” sources appear to indicate possible capital generation
in the low hundreds. So lets say €100-200m, which compares to the €1.5bn
outstanding needed by the bank to reach its €2.2bn target after the senior
subordinated debt swap a few weeks ago which generated c.€0.7bn. As we have been
saying for some time, it implies more dilution for existing shareholders, but
the extent of which is hard to estimate given a large input in any NAV
calculation will be the price at which the equity will be raised. For that
reason, we pulled our recommendations and fair values on the banks after the
November capital assessment from the Financial Regulator."