Foreign brokers set to sell Japan stocks for first time in 18 days
Foreign brokers were set to sell Japanese stocks for the first time in 18 sessions, according to pre-market orders placed through six foreign securities houses before the start of trade on Tuesday.
. SELL 14.3 million shares
. BUY 11.6 million shares
. SELL 2.7 million shares
Asian shares drop on euro zone worry, soft US data
Asian shares slid on Tuesday as investors saw opportunities to cash in from recent strong rallies in the face of weak U.S. data and worries that a potential political shake-up could disrupt the eurozone's efforts to resolve its debt crisis.
The MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.8 percent, dragged lower by a steep 1.8 percent fall in Hong Kong shares.
The euro took the brunt of renewed focus on the euro zone problems, having risen 2.3 percent so far this year against the U.S. dollar, up about 5.4 percent against sterling and 1.8 percent higher against the Australian dollar.
The euro eased 0.1 percent to $1.3496, retreating further from Friday's 14-1/2-month peak of $1.3711, ahead of the European Central Bank's policy meeting on Thursday.
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Italiy - record decrease in services employment in January
Italy’s services workforce shrank at a survey-record pace in January, as business activity also decreased at an accelerated rate. New work levels fell more slowly, however, with firms increasing in confidence about growth in output over the coming year. Elsewhere, there was dip in cost inflation from December’s four-month high, while output prices fell at a modest and slightly slower pace.
January saw Italy’s service sector output contract at a faster rate, as highlighted by the seasonally adjusted Markit/ADACI Business Activity Index – which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago – falling from December’s post of 45.6 to 43.9 in the first survey period of the year. This latest reading was the lowest since last July, and signalled that the sector’s ongoing sequence of contraction extended into a twentieth straight month.
Reflecting the sustained (and accelerated) decrease in business activity, Italian service providers continued to slash staff numbers during January. Moreover, the decline in employment over the month was the most marked since data collection commenced over 15 years ago.
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Goldman Sachs Cohn Says That Europe Has Fundamental Weakness
Goldman Sachs Group Inc. (GS) President Gary Cohn said that Europe still faces “fundamental problems” and that policy makers don’t appear to have a plan for generating economic growth in the region’s southern nations.
“No one has solved the European economic issue for me yet,” Cohn, 52, said in an interview with Bloomberg Television’s Susan Li in Hong Kong today. “No one’s given me an explanation of how we’re really going to create growth in Greece, or in Spain, or in other peripheral countries.”
The region’s economy is set to contract 0.1 percent this year before returning to growth in 2014, according to Bloomberg surveys of analysts. European Central Bank President Mario Draghi’s measures, including injecting funds into banks and offering the lenders unlimited cash, aren’t enough to bolster growth, Cohn said.
“That is a good short-term solution to the problem,” he said. “It doesn’t create economic growth. It creates financial stability in the banking system, but as I said, no economic growth.”
Euro, shares recover as European worries recede
European shares, oil and the euro bounced back on Tuesday from a selloff caused by rising political risks in southern Europe, as data confirmed the region's economy is showing signs of recovery.
The euro, which had taken the brunt of the selling and fallen from a high of over $1.37 at the end of last week to under $1.35 on Monday, rose 0.3 percent to trade at $1.3560.
European shares followed a similar path, recovering from the Monday sell off, while U.S. stock index futures indicated Wall Street would rebound from its worst daily session since November when trading resumed later on Tuesday.
Analysts saw the market's gyrations as a necessary stage in a rally linked to signs of increasing euro zone economic stability and an improving global outlook, underpinned by the easier monetary policies of major central banks.
January 2013 Non-Manufacturing ISM Report On Business - NMI at 55.2%
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 55.2 percent in January, 0.5 percentage point lower than the seasonally adjusted 55.7 percent registered in December. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 56.4 percent, which is 4.4 percentage points lower than the seasonally adjusted 60.8 percent reported in December, reflecting growth for the 42nd consecutive month. The New Orders Index decreased by 3.9 percentage points to 54.4 percent, and the Employment Index increased 2.2 percentage points to 57.5 percent, indicating growth in employment for the sixth consecutive month. The Prices Index increased 1.9 percentage points to 58 percent, indicating prices increased at a faster rate in January when compared to December. According to the NMI™, eight non-manufacturing industries reported growth in January. Respondents' comments are mixed about the economy and business conditions; however, the majority of respondents are optimistic about the overall direction."
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C$ edges up vs US$, helped by stronger data
Canada's dollar gained against its U.S. counterpart on Tuesday, helped by better-than-expected euro zone and U.S. economic data, but the currency remained under pressure as political uncertainty in Spain and Italy weighed.
Traders were also looking ahead to Canadian employment data due at the end of the week and testimony from departing Bank of Canada chief Mark Carney to a British parliamentary committee on Thursday.
"We'll get a typical knee-jerk reaction if it (Friday's jobs data) is weaker, and if we see another outlier to the topside we'll probably see dollar-Canada trend down to the low 99s or high 98s," said Matt Perrier, managing director of foreign exchange sales at BMO Capital Markets.
The currency changed hands at C$0.9962 to the U.S. dollar, or $1.0038, at the end of Tuesday's North American session, compared with Monday's close of C$0.9986, or $1.0014.
The Canadian dollar rose after a survey showed business optimism in the euro zone at an eight-month high.
Yen slumps to 33-month low, euro rebounds
The yen slumped to a 33-month low against the dollar and the euro on Wednesday as investors piled back into the easy one-way trade on the view that a more dovish Bank of Japan governor will soon be installed to push through aggressive easing measures.
The euro resumed its uptrend despite a call from French President Francois Hollande to protect the currency from irrational movements, while the Australian dollar dropped to a six-week low after soft Australian retail sales data.
The Japanese currency came under renewed pressure after BOJ governor Masaaki Shirakawa on Tuesday announced he will step down on March 19, three weeks before his five-year term ends in April.
Markets Are Up Across Europe After A Gigantic Day In Japan
Stock markets are staging a nice rally early in the European trading session, following a 99 point rally in the Dow Jones Industrials and a 3.7 percent surge in Japan's Nikkei.
England's FTSE 100 is up 0.5%.
Germany's Dax is up 0.2%.
Spain's IBEX is up 0.4%.
France's CAC 40 is up 0.2%.
Germany's Dax is up 0.2%.
Spain's IBEX is up 0.4%.
France's CAC 40 is up 0.2%.
It's a particularly quiet day today with no major U.S. economic news being announced. Later this morning we'll get a German bond auction.
Tomorrow should be more interesting with an ECB meeting, initial jobless claims in the U.S., and the grilling of incoming Bank of England governor Mark Carney.
German Factory Orders Add to Signs of European Recovery
German factory orders rose in December as euro-area demand jumped, adding to signs that the region may be starting to recover from recession.
Orders, adjusted for seasonal swings and inflation, increased 0.8 from November, when they fell 1.8 percent, the Economy Ministry in Berlin said today. The median forecast in a Bloomberg News survey of economists was for a 0.7 percent gain. Factory orders from the euro area surged 7 percent.
The report is the latest to suggest the 17-nation euro economy is starting to improve after the sovereign debt crisis pushed it into recession last year. Spanish house prices halted a three-year decline in January and euro-area economic confidence rose to a seven-month high. Rising demand in the currency bloc would bolster growth in Germany and help it rebound from a contraction in the final quarter of 2012.
“It’s good news that the increase in euro-area orders was so big,” said Frederik Ducrozet, an economist at Credit Agricole SA in Paris. “It’s too early to declare a recovery in the euro area, but for Germany this could be the beginning of some good hard data in the first quarter.”