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Japanese Prime Minister Naoto Kan (in blue overalls) meets Governor Sato of Fukushima Prefecture where the stricken nuclear power plant is located, April 21, 2011.
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.
The agency raised its forecast of net general government debt to GDP to 145% by
March 31, 2014, up from the previous forecast of 137%.
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.
The two companies said J&J will purchase Synthes for CHF 159 Swiss francs a
share, which is a premium of about 22% to where Synthes stock traded before
talks began in mid-April.
PlayStation: Sony has warned over 70m
users of its PlayStation Network that their personal information, including
credit card details, may have been stolen.
The company said that the data might have fallen into the hands of an "unauthorised
person" following a hacking attack on its online service.
In a statement posted on the official PlayStation blog, Nick Caplin, the
company's head of communications for Europe, said: "There’s a difference in
timing between when we identified there was an intrusion and when we learned of
consumers’ data being compromised. We learned there was an intrusion 19th April
and subsequently shut the services down. We then brought in outside experts to
help us learn how the intrusion occurred and to conduct an investigation to
determine the nature and scope of the incident. It was necessary to conduct
several days of forensic analysis, and it took our experts until yesterday to
understand the scope of the breach. We then shared that information with our
consumers and announced it publicly yesterday evening."
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.
Barclays reported a pre-tax profit of £1.66bn down from £1.82bn a year ago.
Adjusted profit, stripping out movement in its own credit, was £2bn, up 10%.
The Barclays Capital investment bank unit contributed underlying profit of
£1.3bn, down 15% on a year ago, as revenue also dipped 15% to £3.3bn.
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.
Net profit attributable to shareholders rose to CHF 1.1bn Swiss francs in the
Credit Suisse reported a slowdown in the growth of new money flowing into the
bank, in contrast with rival UBS, which reported on Monday. Net new money coming
in fell by 26.5% from a year earlier.
First-quarter net revenues jumped by 13% to CHF 7.8bn Swiss francs and the bank
was also hit by the strong Swiss franc.
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
Excluding one-time items and inventory changes, earnings fell to $5.37bn from
$5.6bn a year earlier. Production in the quarter dipped 11% to the equivalent of
3.58m barrels a day after the field disposals.
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.
While Greece is a special case, debt levels in Ireland and Portugal are not that
much above the euro-area average of 85%. However, the key concern is around the
ability for these economies to grow over the coming years to stabilise debt
levels in the context of the massive fiscal consolidation strategies that they
have to implement. This is not something that is going to be resolved in the
near future, but the markets continue to try to push for a solution sooner
rather than later.
As we have learned from the lessons of the bail-out of Greece almost a year ago,
solutions employed for one country often get forced upon others by the market in
a domino effect. Therefore, although circumstances are different in each
country, what happens in Greece (where some believe a restructuring event in
imminent) could have important implications for Ireland and Portugal."
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:
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
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
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%.
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.
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.
Thursday, July 15, 2010, the index fell for the 35th straight session, by 9
points, or 0.537%, to 1,700 points,
On Friday July16th, the BDI rose 20
points or 1.12% to 1,700 to break the 35-session losing streak.
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.
said in early February that a surge in oil inventories in Cushing, Oklahoma,
where WTI is delivered into America’s pipeline system, has depressed the value
of the benchmark against other yardsticks. The
International Energy Agency said on Thursday that with “few relief valves” to
cut the stock overhang in Cushing, the price dislocation “may persist for months
[or years] to come”.