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Wednesday, August 1, 2012

Egypt foreign, finance ministers say to keep jobs - Reuters

Egypt foreign, finance ministers say to keep jobs - Reuters

CAIRO | Wed Aug 1, 2012 7:47am EDT

CAIRO (Reuters) - Egypt's finance and foreign affairs ministers said on Wednesday they were keeping their posts in a new government being formed by Prime Minister Hisham Kandil, who was appointed by President Mohamed Mursi last week.

Foreign Minister Mohamed Kamel Amr and Finance Minister Mumtaz al-Saeed confirmed they would stay on after emerging from a meeting with Kandil, who is due to formally unveil his cabinet on Thursday.

Osama Saleh, the head of the General Authority for Investment, said he had been appointed investment minister. Osama Kamal, head of the Egyptian Petrochemical Holding Co, said he had been appointed oil minister.

A little-known technocrat, Kandil was irrigation minister in the outgoing cabinet led by Prime Minister Kamal al-Ganzouri - who was appointed by the military council and a premier under ousted leader Hosni Mubarak. Kandil has said he would put qualifications before political allegiances when choosing his cabinet members.

The government formation ends a month long wait for the first administration of the Mursi era. The Muslim Brotherhood politician, who was sworn in on June 30, has been criticized for the amount of time it took him to name his prime minister.

Faced by an economy hit by 18 months of political instability, the new government will need to move fast to address acute economic problems including a looming balance of payments crisis and unaffordable state borrowing costs.

(Writing by Tom Perry, editing by Jon Boyle)



Sterling drops to two-week low vs euro after UK PMI data - Reuters India

Wed Aug 1, 2012 8:33pm IST

* Sterling falls after weak UK manufacturing PMI

* Euro/sterling rises, more gains may depend on ECB

* Weak data raises chances of more BoE easing in coming mths

* UK interest rates, QE target seen unchanged this week

By Jessica Mortimer

LONDON, Aug 1 (Reuters) - A drop in UK manufacturing activity pushed the pound to its lowest in more than two weeks against the euro on Wednesday as investors became nervous about the possibility of more monetary easing by the Bank of England.

Coming after recent data showing an unexpectedly sharp contraction in the UK economy during the second quarter, a survey showed Britain's manufacturing sector shrank at its fastest rate in more than three years in July.

The euro was up 0.5 percent against the UK currency to 78.94 pence, its strongest since mid-July as the survey dealt a blow to hopes the country may come out of recession over the summer.

Although the BoE is widely expected to leave interest rates and its quantitative easing target unchanged when it announces its next policy decision on Thursday, a raft of recent weak economic data have increased the chances of more easing in the coming months.

"The market is debating whether interest rates could come down in the UK and that is one route through which the raft of recent weak data is moving the currency," said Adam Cole, global head of currency strategy at RBC.

He said a recent change in the market's perception that the central bank was unlikely to take interest rates below their current record low 0.5 percent now means that the pound is now much more vulnerable to weak economic data than it was.

The minutes to the BoE's policy meeting in July showed policymakers were softening their stance on cutting interest rates, though any move was not likely to come for several months. Most analysts say any rate cut would not happen before November, when the current quantitative easing programme ends.

RBC's Cole added that sterling "seems to be losing its status as a safe haven status" and was no longer rallying when markets are more averse to taking on risk.

Against the dollar, sterling was down 0.35 percent at $1.5618, having hit a 6-day low of $1.5602.

Wednesday's weak purchasing managers index (PMI) on manufacturing followed figures from Nationwide showed British house prices fell at their fastest annual pace in nearly three years last month and added to sterling selling.

Morgan Stanley earlier revised their UK growth forecasts lower and now expect a 0.5 percent contraction in GDP during 2012. They forecast sterling to fall to $1.46 against the dollar in the first quarter of 2013.

FOCUS ON ECB

The euro was also supported by the possibility that the European Central Bank could take bold action to tackle the euro zone debt crisis this week, despite strong German opposition to the bank buying government debt in the secondary market to lower Spanish and Italian borrowing costs.

"The PMI numbers were awful and sterling got hit by that," said Richard Driver, currency strategist at Caxton FX. "But against the euro, we expect sterling's losses to be temporary as the common currency's rally will fade."

Analysts said most currencies were likely to trade in a tight range ahead of the ECB decision on Thursday. The meeting is expected to overshadow decisions by the BoE and the U.S. Federal Reserve (due later on Wednesday) after last week's pledge by ECB President Mario Draghi to do "whatever it takes" to protect the euro.

If the ECB delivers bold measures, it could boost investor appetite for taking on risk, helping sterling against the dollar, but if it disappoints it could lead to sharp falls in currencies perceived as higher-risk. The euro is also likely to weaken in that case. (Additional reporting by Anirban Nag; Editing by Toby Chopra)



Government consults on winding down non-bank finance firms - Reuters UK

LONDON | Wed Aug 1, 2012 2:30pm BST

LONDON (Reuters) - The government will give its regulators new powers to wind down failing investment firms and clearing houses to avoid wreaking havoc in the wider market, saying the timing of similar European Union rules was too uncertain for it to wait.

The government already has powers to force a deposit-taking bank to be wound down in an orderly way and without needing taxpayer help.

The financial services minister Mark Hoban said on Wednesday the government wants similar powers over parts of the non-banking financial system.

Sectors being looked at include insurers, investment firms, clearing houses and payments systems such as those provided by banks for credit and debit transfers.

The government published a consultation paper ahead of legislative proposals.

"This consultation underlines the government's commitment to maintaining the UK's position as a pre-eminent global financial centre, while also ensuring that the financial services sector is able to provide essential services to the wider economy without posing a risk to financial stability," Hoban said.

EU TOO SLOW

The EU is scrutinising a law for a resolution regime covering investment firms and banks but the timing of its adoption is uncertain. The UK government "intends to prepare to legislate domestically on a more accelerated timetable".

There will also be a full resolution regime for UK incorporated parent firms of systemic investment firms and deposit-taking institutions.

Britain only has a special administration regime for investment firms and the UK arm of U.S. broker MF Global was the first firm to be subject to this regime.

The Treasury said it would shortly start a separate review of obstacles to the timely return of client assets and money to investors from a failed firm. Investigators into MF Global are searching for $1.6 billion in missing customer funds.

The EU is due to propose a law giving supervisors powers to wind down a failing clearing house, but Britain said it wants to push ahead earlier and will legislate domestically first.

The UK law would allow the Bank of England to step in and ensure continuity in critical clearing services.

Central bankers published a draft blueprint on Tuesday to force clearing houses, such as LCH.Clearnet in London, to show how they could be wound down in an orderly way or kept going if they got into trouble.

LESS CLEAR CUT

Turning to insurers, the government said a failure in the sector currently leads to a "run-off", whereby a firms stops writing new business and existing policies mature over time.

The case for a specific resolution mechanism for insurers is not clear cut but the current insolvency framework should be reviewed, the consultation paper said.

Global insurance supervisors are thrashing out criteria for deciding which of the world's biggest insurers must undergo tighter supervision to avoid them getting into trouble in the first place.

The government said it was also undecided on whether a resolution regime was needed for other types of market infrastructure such as exchanges and trading platforms, trade repositories, payment systems or securities settlement systems.

The failure of even part of the payments system, as seen recently at Royal Bank of Scotland, affects millions of customers. The government suggests two approaches - strengthening existing insolvency rules or a new resolution framework - or possibly a mix of solutions.

(Reporting by Huw Jones; Editing by Helen Massy-Beresford)



FOREX-Euro little changed ahead of Fed and ECB decisions - Reuters UK

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.



Forex: EUR/USD drops after ADP report - NASDAQ

FXstreet.com (Córdoba) - EUR/USD edged lower after a stronger-than-expected ADP employment report for the US modestly lifted the greenback across the board on declining prospects of QE3.

EUR/USD dropped nearly 30 pips after the data, falling to the 1.2285 area where the 100-hour SMA offered some support to the cross. At time of writing, the pair is trading at the 1.2290 area, 0.1% below its opening price, as investors await the Federal Reserve policy announcement due at 18:15GMT.

In terms of technical levels, next supports are seen at 1.2280, 1.2250 and 1.2225, while on the other hand resistances could be found at the 1.2330/40 area, followed by 1.2390 and 1.2410.

The ADP report showed the US private sector added 163,000 new jobs in July, surpassing expectations of a gain of 120,000. Markets look to ADP's report on private sector payrolls to provide some guidance on the US Labor Department's jobs estimate, which will be released Friday.



Sailors Learn to Navigate Forex Markets as Alpari launches Skipper Trading Challenge - Yahoo Finance

Sailors Learn to Navigate Forex Markets as Alpari launches Skipper Trading Challenge - Yahoo Finance

LONDON--(BUSINESS WIRE)--

The Alpari companies, a leading association of global providers of online foreign exchange ("Forex", "FX") trading services and the title sponsor of the Alpari World Match Racing Tour (AWMRT), are encouraging sailors to compete in a new activity – Forex trading. The Alpari Skipper Trading Challenge, a demo Forex trading contest open to the nine tour card holding skippers competing in the AWMRT, will allow sailing fans worldwide to follow their sporting heroes as they compete in the global Forex markets.

The nine skippers, along with a little help from their teammates, will compete until Match Race France, Marseille, where the trading contest finale will take place on 26September. Each skipper will be equipped with a demo account on the popular MetaTrader 4 platform and given a whopping half a million pounds in virtual money to trade with. The winners will be determined by their account profit, or loss, at the end of the trading period. As on the water, competition will be fierce as the skippers and their teammates go head-to-head for a coveted TAG Heuer Aquaracer watch.

The Alpari Skipper Trading Challenge provides the perfect opportunity for Match Racers to demonstrate many of their sailing skills in a new way. The ability to identify opportunities, calculate risk and react with lightening speed will stand them all in good stead as they learn to navigate the Forex markets over the coming months.

James Hughes, Chief Market Analyst at Alpari (UK), said, “Match racing and Forex trading require a very similar skill set – both take dedication and the ability to balance information with instinct to form an optimum strategy. We hope the Alpari Skipper Trading Contest will help both sailors and sailing fans get better acquainted with the world of Forex trading and the opportunities this global USD4 trillion a day market has. We’ll be helping them out along the way with additional market analysis and educational tools!”

Record-holding four-time AWMRT champion Peter Gilmour commented, “The Alpari Skipper Trading Challenge will be a great opportunity to compete against the other tour card holding skippers onshore and in a completely new environment. I have been a follower of the financial markets for a number of years and I am looking forward to applying my existing knowledge and strategy skills to this new challenge. Let’s place some trades!”

Find out more about the Alpari Skipper Trading Challenge and our sponsorship of the AWMRT here.

-Ends-

Notes to editors:

2012 Alpari World Match Racing Tour calendar:

    Date   Event   Location
1 May 23 – 28 Match Race Germany Langenargen, Germany
2 May 29 – June 3 Korea Match Cup Gyeonggi, Korea
3 July 2 – 7 Match Cup Sweden Marstrand, Sweden
4 July 10 – 15 Chicago Match Cup Chicago, USA
5 Aug 28 – Sep 2 St. Moritz Match Race St. Moritz, Switzerland
6 Sep 24 – 29 Match Race France Marseille, France
7 Oct 1 – 7 Argo Group Gold Cup Hamilton, Bermuda
8 Dec 4 – 9 Monsoon Cup K.Terengganu, Malaysia

About Alpari:

With a history dating back to 1998, the Alpari companies are among the world's fastest growing providers of online Forex trading services. The companies provide cutting edge technology, low-cost trading, comprehensive market research tools, advanced educational programmes and world-class customer service.

The group of Alpari companies has offices in over 20 countries. Locations include London, New York, Tokyo, Shanghai, Dubai, Moscow, Mumbai and Frankfurt. Combined, the companies look after over 170,000 active trading accounts, generating monthly trading volumes in excess of USD210 billion and employ over 630 people worldwide.*

About Alpari (UK):

Alpari (UK) Limited is an independent entity within the group of Alpari companies. The company is a leading global foreign exchange ("FX", "Forex"), precious metals and CFD broker headquartered in the heart of the City of London and with subsidiaries in Germany, Japan and India as well as a Representative Office in China. In the UK, clients can also benefit from tax free** financial spread betting with Alpari (UK). The company is authorised and regulated by the Financial Services Authority (FSA) in the United Kingdom. FSA Register number 448002. Company number 05284142. Registered office: 201 Bishopsgate, London, EC2M 3AB, United Kingdom.

*May 2011.

**Any profits you make from spread betting are completely free of capital gains tax, stamp duty and income tax (for UK residents). UK tax laws are subject to change and individual circumstances may vary. Financial spread betting is only available in the UK.

About the Alpari World Match Racing Tour:

The Alpari World Match Racing Tour (WMRT) is the leading professional sailing series featuring eight World Championship events across the globe, sanctioned by the International Sailing Federation (ISAF) with “Special Event” status.

The World Tour awards over USD1.75 million in prize money with points awarded at each event culminating in the crowning of the “ISAF Match Racing World Champion”. The prize fund includes a USD500,000 overall prize pool for the top nine teams in the championship.

Events take place in identically supplied racing yachts to place the focus on team work and skill. Racing takes place close to the shore for the general public to follow the races as virtual on-the-water stadiums.

Media and television highlights coverage reaches in excess of 183 countries around the world. for more information, visit www.wmrt.com

Forex, spread bets and CFDs are leveraged products. They may not be suitable for you as they carry a high degree of risk to your capital and you can lose more than your initial investment. You should ensure you understand all of the risks.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50361561&lang=en

MULTIMEDIA AVAILABLE:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50361561&lang=en



Tuesday, July 31, 2012

Forex focus: no escape for UK as the eurozone suffers - Daily Telegraph

Forex focus: no escape for UK as the eurozone suffers - Daily Telegraph

The European Stability Mechanism (ESM) is still weeks away from being established and any progress will be slow while Europe is on its summer holiday.

“September should prove to be a pivotal month as the ESM comes in to play at about the same time as Greece would technically become insolvent,” notes Vimal Popat of Market Securities.

Earlier in the year, brokers were predicting that Greece would leave the eurozone in the next 12 months and that view is gaining traction.

David Kerns of Moneycorp says: “Some economists are now estimating the chances of Greece crashing out of the euro by the start of 2013 at 90pc. With the single currency seemingly doomed, the euro will continue to be weak for the foreseeable future.”

Jeremy Cook of World First agrees: “With tumbling growth everywhere, the act of simply pumping good money after bad into a bottomless pit has lost its appeal. Greece will leave the euro within the next year and be better for it.”

But Simon Smith, chief economist at FxPro, is not so sure. “I used to think that cutting Greece adrift was more likely a year ago. The trouble is now that the troika is in too deep. We’re firmly in a dilemma, namely that it’s costing more to keep them [the Greeks] in, but the costs of letting them leave is also rising.”

Kerns says: “Greece is on the rack, and Spain is rushing towards the edge of the abyss. The Madrid government is being stretched to breaking point by the debts racked up by Spain’s free-spending regions. Spain will soon need a huge sovereign bailout.”

Spanish borrowing costs have topped 7 pc and Italy’s soared to 6.5 pc last week.

Chris Towner of HiFX says: “This cannot be tolerated for long. There needs to be a solution put in place similar to the funding for lending scheme announced in the UK, whereby Spain and Italy can borrow from the ECB at more tolerable rates as long as they reduce their debt piles. At the end of the day the solution is within Europe, but it does require more integration.”

Naturally the deterioration across the water in the eurozone affects Britain, as last week’s shrinking growth figures showed.

Robin Haynes, head of Currency Index, says: “With the whole bloc sliding towards chaos and prolonged recession, inevitably the UK will suffer. The negative GDP figure sent the pound lower across the board last Wednesday, so it could be dangerous to assume that the escalating crisis means forever improving exchange rates for Brits.”

And Josh Ferry Woodard of TorFX adds: “As the UK’s largest trade partner, the eurozone has a massive impact on the UK economy. Over the past 13-months the pound has appreciated by over 15 cents against the euro, which has made British exports considerably less competitive and hampered the Bank of England’s plan to export the UK out of recession.”

Forex focus is sponsored by



Finance must escape the shadows - Financial Times

July 31, 2012 7:39 pm



Washington mayor under fire as finance scandal swirls - Reuters

Tue Jul 31, 2012 1:59pm EDT

* Two campaign workers, consultant have pleaded guilty

* Gray was elected Washington's mayor in 2010

* "The lunatics were minding the asylum," analyst says

By Ian Simpson

WASHINGTON, July 31 (Reuters) - Even as the District of Columbia is doing better than it has in decades, a campaign finance scandal is threatening to bring down the man in charge of the U.S. capital's local government -- Mayor Vincent Gray.

Two campaign workers and a consultant have pleaded guilty in an ongoing federal probe into the 2010 election, when Gray pledged to return integrity to city hall. His ratings dropping, the mayor is resisting calls by some council members to quit.

Gray, a Democrat, is not alleged to have been involved in or known about the events behind the scandal. But the affair reflects a culture of ingrained municipal corruption in the city, which is under unprecedented scrutiny by newly aggressive prosecutors, analysts said.

"The lunatics were minding the asylum. Now we have a situation where literally there is a new sheriff in town," said Chuck Thies, a political analyst and columnist.

The district, which is home to the U.S. Capitol and the White House, is under the district of the U.S. Congress and not part of any state.

The finance scandal is casting a cloud over Gray's office amid an economic and demographic boom for the city of 618,000 people.

With steady growth and a flourishing cultural scene, Washington ranked second behind Houston in a Forbes.com ranking of the coolest places to live in the United States.

The once-a-decade Census in 2010 recorded the District's first upturn in population in 60 years, driven by an influx of young professionals and immigrants.

The murder rate is at levels not seen since the 1960s. Unemployment is dropping, though still above the national average at 9.1 percent.

After wooing by Gray, retailer Wal-Mart Stores Inc is planning to open its first outlets in the District.

"SHADOW CAMPAIGN"

As part of the campaign scandal, two Gray aides have pleaded guilty over a scheme to pay a minor mayoral candidate to disparage incumbent Adrian Fenty in the 2010 Democratic mayoral primary.

A former consultant pleaded guilty in July for her role in helping to hide and spend about $650,000 in undisclosed campaign funds from a city contractor.

U.S. Attorney Ronald Machen Jr, who has spearheaded the federal probe, has said the 2010 race hid a "shadow campaign" that featured cash concealed from voters.

Gray easily won the primary, the key to victory in the overwhelmingly Democratic city, and cruised to a win in the general election.

In another blow to Gray, the Washington Post reported on July 23 that his campaign kept a database with the identities of almost 6,000 public housing residents it targeted in get-out-the-vote efforts.

Legal experts told the Post the list appeared to be an unauthorized use of private government information.

A Washington Post poll in July found only 29 percent of city residents approved of how Gray was doing his job. Fifty-four percent thought he should quit.

RIBBON-CUTTING

Gray, a youthful-looking 69, is keeping up a steady schedule of meetings and community events despite the allegations.

Cutting a ribbon on a business improvement project last week amid sweltering heat, Gray told about 100 applauding supporters that its bicycle lanes and gas and power lines were a model for the city.

He later turned aside questions from a Reuters reporter about the allegations, saying: "Let's not break into this, OK? Let's focus on this."

Asked how Gray was dealing with the scandal, spokesman Pedro Ribeiro said: "He continues to maintain the same schedule of running a city, and a healthy city at that."

The campaign charges are the latest in a long line of District scandals that include Mayor Marion Barry's conviction on a drug charge in 1990 -- he is now on the City Council -- and the 2008 conviction of a tax official for embezzling almost $50 million.

In June, Kwame Brown, the former council chairman, pleaded guilty to bank fraud and violating finance laws as part of his 2008 campaign. Another councilman pleaded guilty in January to stealing more than $350,000 in city funds.

Thies, the analyst, said the cloud over Gray was a result of increased federal and press scrutiny, infighting over city contracts and a political "old guard" that has failed to keep up with changing times.

Dorothy Brizill, founder of DC Watch, a government watchdog organization, called the current allegations "really over the top."

"Nobody blows the whistle (on corruption) and it goes on for years," she said.



Forex Flash: Fed expected to launch stimulus measures in upcoming months – NAB - FXStreet.com
FXstreet.com (Barcelona) - Expectations are high that the Fed will announce additional stimulus measures either following its current meeting (ending
 1 August) or its September meeting. According to Antony Kelly, a research analyst at NAB, “With little momentum in the economy, a high level of uncertainty about the future pace of growth and both unemployment and inflation below the Fed’s view of their desirable level, additional monetary easing is extremely likely.”

“We suspect this won’t mean an announcement of additional QE following the meeting currently underway, given ‘operation twist’, which is intended to impact on the economy in a similar way to QE, extended in the previous meeting this appears too soon.” he adds. The Fed Chairman in his post-June meeting press conference noted the difficulties in reading recent data (e.g. due to weather, seasonal adjustment) and the need to take additional readings on the economy. One month’s jobs report doesn’t seem sufficient, although the sluggish economy indicated by the GDP report may change this.

A more likely intermediate step would be to extend the Fed’s forward guidance on how long the Feds Fund Rate will remain exceptionally low from late 2014 into 2015. However, the Fed Chairman has explicitly identified further QE as one of the measures they would consider if they decided to ease policy further. Therefore, additional QE is possible, although it may be kept in reserve for now.



Pro-market Chidambaram returns as finance minister - Reuters India

NEW DELHI | Tue Jul 31, 2012 11:25pm IST

NEW DELHI (Reuters) - Palaniappan Chidambaram, who as finance minister oversaw India's strongest growth surge in the past two decades, returned to the post on Tuesday but faces a sharp economic slowdown, worsening public finances and falling exports this time around.

A Harvard-educated former lawyer who is regarded as a market-friendly reformer, took over a ministry that was run until recently by Pranab Mukherjee, now the country's president.

"I think we are in safe hands now, it could lead to a turn in sentiment as Chidambaram was involved with reforms, fiscal consolidation," said Abheek Barua, chief economist at HDFC Bank in New Delhi.

"So there will be a sense of ownership now of the reform agenda and that's critical as there was a sense of drift, a sense of no ownership. Nothing will happen magically overnight, but the market will have enough conviction on the reform process."

However, his intellectual prowess, perceived as arrogance in some quarters, has won the 66-year-old enemies within the ruling Congress party and on occasion alienated public opinion.

Prime Minister Manmohan Singh, who stood in as finance minister for a few weeks after Mukherjee's departure, has taken a risk by appointing Chidambaram, who is also battling legal cases.

The Supreme Court is hearing a petition seeking to make him a co-accused in a multi-billion-dollar telecoms scandal that has rocked the Congress-led coalition government, while a subordinate court is hearing another petition challenging his election to parliament in 2009.

Moving from the Home Ministry, Chidambaram becomes Finance Minister for a third time.

In his first stint, in the mid-1990s, Chidambaram carried forward the transformational reforms launched by Singh in 1991, scrapping controls and restrictions right across India's insular and state-stifled economy.

He curbed government spending and kept a huge deficit within limits imposed by a special law that he had piloted himself. In 1997, Chidambaram delighted economists with a budget that lowered import tariffs and slashed tax rates to boost revenues in a country where avoidance was the norm.

POLITICAL, ECONOMIC CHALLENGES

Later, he was hailed for his deft handling of the economy during the global financial crisis in 2008, and his four-year tenure from 2004 saw economic growth averaging about 9 percent.

Investors have been baying for reforms since Singh's coalition government was re-elected in 2009. Political dissension stymied Mukherjee's efforts to push major reforms during his three-year tenure and Chidambaram is likely to face the same roadblocks.

"The fact is the kind of constraints which this government has faced, it is a big question whether Chidambaram or any other person from the government would be able to solve it," said Rupa Rege Nitsure, chief economist at Bank of Baroda.

Chidambaram faces a raft of challenges in his new job.

The government's failure to implement structural reforms has resulted in a stubbornly high inflation, making it difficult for the central Reserve Bank of India to cut interest rates significantly despite ebbing economic growth.

Latest quarterly growth figures showed a nine-year low of 5.3 percent, and yet inflation has been running at above 7 percent for two years.

On Tuesday, the RBI predicted more economic pain, lowering its growth projection for financial 2012/13 (April-March) to 6.5 percent from 7.3 and raising its inflation forecast for March 2013 to 7 percent from 6.5.

Higher spending on subsidies coupled with sluggish tax receipts have bloated the fiscal deficit, putting India's investment-grade sovereign debt rating in peril. A record current account gap, policy flip-flops and waning global appetite for risk have also hammered the rupee this year.

To make matters worse, disappointing summer monsoon rains have raised the spectre of a drought, which could force higher public spending and aggravate the government's fiscal troubles.

(Additional reporting by Frank Jack Daniel, Nigam Prusty and C. K. Nayak in NEW DELHI; Swati Bhat and Suvashree Dey Choudhury in MUMBAI; Editing by John Chalmers and Jon Boyle)


Forex Flash: Fed expected to launch stimulus measures in upcoming months – NAB - FXStreet.com

Forex Flash: Fed expected to launch stimulus measures in upcoming months – NAB - FXStreet.com
FXstreet.com (Barcelona) - Expectations are high that the Fed will announce additional stimulus measures either following its current meeting (ending
 1 August) or its September meeting. According to Antony Kelly, a research analyst at NAB, “With little momentum in the economy, a high level of uncertainty about the future pace of growth and both unemployment and inflation below the Fed’s view of their desirable level, additional monetary easing is extremely likely.”

“We suspect this won’t mean an announcement of additional QE following the meeting currently underway, given ‘operation twist’, which is intended to impact on the economy in a similar way to QE, extended in the previous meeting this appears too soon.” he adds. The Fed Chairman in his post-June meeting press conference noted the difficulties in reading recent data (e.g. due to weather, seasonal adjustment) and the need to take additional readings on the economy. One month’s jobs report doesn’t seem sufficient, although the sluggish economy indicated by the GDP report may change this.

A more likely intermediate step would be to extend the Fed’s forward guidance on how long the Feds Fund Rate will remain exceptionally low from late 2014 into 2015. However, the Fed Chairman has explicitly identified further QE as one of the measures they would consider if they decided to ease policy further. Therefore, additional QE is possible, although it may be kept in reserve for now.



United fans fume over Glazer plan to sell stake on New York Stock Exchange... and keep half the money for themselves - Daily Mail

By Sportsmail Reporter

|

Manchester United's owners suffered a fresh wave of criticism on Monday night after indicating only half the proceeds of their planned IPO will be used to reduce the club's massive debt.

Previously, the Glazer family had indicated they would use all the money to reduce United's borrowings, which presently stand at 437million.

Announcement: The Glazer family said they will sell 10 per cent of Manchester United on the NYSE

Announcement: The Glazer family said they will sell 10 per cent of Manchester United on the NYSE

However, within the prospectus that was released through a New York Stock Exchange announcement of a planned sale, the Glazers have indicated only half the sum will be used.

It drew a stinging rebuke from fans, who took to Twitter to express their disgust.

Not that supporter sentiment has been a significant influence on the Glazer family's thinking.

And, with shares set to be launched at between 16 US dollars and 20 US dollars, the Glazers, who also own the Tampa Bay Buccaneers NFL franchise, hope to net around 150million in total.

'Manchester United today commenced its initial public offering of 16,666,667 Class A Ordinary Shares,' said a statement issued from New York by Sard Verbinnen & Co, the public relations firm enlisted by United for the IPO.

For sale: United recently launched on the New York Stock Exchange

For sale: United recently launched on the New York Stock Exchange

'Manchester United is offering 8,333,334 Class A Ordinary Shares and the selling shareholder is offering 8,333,333 Class A Ordinary Shares.

'The underwriters have an option to purchase up to an additional 2,500,000 Class A Ordinary Shares from the selling shareholder.

'The Class A Ordinary Shares will be listed on the New York Stock Exchange and will trade under the symbol "MANU".'

On an issue where even the use of the word 'MANU' can evoke bad feeling due to its alien nature amongst hard-core United fans, the Glazer family has already been a hugely divisive issue.

Some view them as mere custodians of United and, taking Sir Alex Ferguson's repeated assurances - the latest delivered less than a fortnight ago - treat them from a neutral perspective.

Upset: Fans of the club managed by Sir Alex Ferguson are likely to be angry that some of the money from the sale of the shares will go to the Glazer family

Upset: Fans of the club managed by Sir Alex Ferguson are angry that some of the money from the sale of the shares will go to the Glazer family

More militant Red Devils fans have maintained an antagonistic stance, continually stressing how draining the Glazers' involvement has been to United's finances.

Once yesterday's announcement has been fully digested, more may become clearer.

And it is not yet known what the exact response in New York will be given the US can hardly be described as a soccer hotbed.

The news came on a day United confirmed a massive new shirt sponsorship deal with US car giant Chevrolet, which takes effect from 2014.

That deal will eventually swell the Red Devils' growing commercial income still further.

However, critics will also point to the fact the club are yet to post end-of-year accounts which show the exact amount bowing out of the Champions League group stage cost them.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

Could be Rangers mk11, let's hope so !

Half will reduce the debt! And exactly what is the problem with that? Something is better than nothing at the end of the day. Even tho they are taking money out, debt is being reduced. Anyone who has a business usually takes money out of it. Otherwise...what's the point in owning it in the first place

$old Trafford - bought by the Yanks,owned by the banks. Owed Trafford - no trophies,no future,swamped in debt. Citeh & Chelsea - Champions and rich. Enjoy your overdraft, rags. Viva las Glazers!

NOTICE TO ALL UNTIED FANS: If you buy Replica shirts, and pay to go and watch United then you are only funding the miserable financial future of the Club. We are essentially funding the Glazer family and the demise of Man Utd. If you love Man Utd are 'true' fans then please DO NOT offer any finance to them this season.

my neighbours cat is missing.........

This article makes me grin so much - milk them dry glazers!! Viva la glazers!!!. Manure - the new bitters.

to all those fans who have a season ticket at old trafford. Shame on you for supporting this pillage of the football club you claim to support.

The debt will go eventually

Unless these shares have the same voting rights and share dividend entitlement as the remaining share held by these poor American owners you'd be a fool to to buy them, these shares will fall in value faster than the facebook shares simply because these owners are taking massive profits whilst not reducing the debt, with the amount of money they have taken they could have cleared that debt by now.

so the secret is out....i gave up my season ticket when the Glazers joined United even though I live in Budapest. When they de-listed the shares and effectively bought shares back from supporters, their tactics were obvious. I am not worried at the debt level as that is financial engineering when the company is worth 5x debt level. What is worrying is that these guys are selling shares with virtually no voting rights or dividend payouts, I cant imagine what idiots will buy then but I presume the shares are underwritten. The next steps are worrying as they keep failing to understand the operational realities of the club. They are as out of touch as Arsenal owners and Learner at Villa. The difference is that they have a yes man for a Chief Exec and the best manager the world has ever seen. The club will continue to thrive as they are an unstoppable money machine but the soul has been removed. It is such a shame.

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Forex: USD/JPY steady around 78.24 - FXStreet.com
FXstreet.com (Barcelona) - Since mid-July the USD/JPY trades below the 100-hour moving average, with the exception of last Friday’s break above and yesterday’s full retracement. The pair is currently following that line at 78.24.

Since early Asian session the pair is moving to the upside, with a low at 78.12, but the 100-hour MA could keep or delay it from further gains.

“After the break of 79.00 the short-term bias is to the downside towards the 77.65 level. In the long term, however, we expect a bullish scenario: a test of the 83.00 resistance level”, wrote Deltastock.com analyst Stoyan Mihaylov.



Taliban cheer Pakistan's decision to reopen NATO route; protection money feeds operations - YAHOO!

KANDAHAR, Afghanistan - As the United States trumpeted its success in persuading Pakistan to end its seven-month blockade of supplies for NATO troops in Afghanistan, another group privately cheered its good fortune: the Taliban.

One of the Afghan war's great ironies is that both NATO and the Taliban rely on the convoys to fuel their operations — a recipe for seemingly endless conflict.

The insurgents have earned millions of dollars from Afghan security firms that illegally paid them not to attack trucks making the perilous journey from Pakistan to coalition bases throughout Afghanistan — a practice the U.S. has tried to crack down on but admits likely still occurs.

Militants often target the convoys in Pakistan as well, but there have been far fewer reports of trucking companies paying off the insurgents, possibly because the route there is less vulnerable to attack.

Pakistan's decision to close its border to NATO supplies in November in retaliation for U.S. airstrikes that killed 24 Pakistani troops significantly reduced the flow of cash to militants operating in southern and eastern Afghanistan, where the convoys travel up from Pakistan, said Taliban commanders.

Pakistan reopened the supply route in early July after the U.S. apologized for the deaths of the soldiers.

"Stopping these supplies caused us real trouble," a Taliban commander who leads about 60 insurgents in eastern Ghazni province told The Associated Press in an interview. "Earnings dropped down pretty badly. Therefore the rebellion was not as strong as we had planned."

A second Taliban commander who controls several dozen fighters in southern Kandahar province said the money from security companies was a key source of financing for the insurgency, which uses it to pay fighters and buy weapons, ammunition and other supplies.

"We are able to make money in bundles," the commander told the AP by telephone. "Therefore, the NATO supply is very important for us."

Both commanders spoke on condition of anonymity for fear of being targeted by NATO or Afghan forces, and neither would specify exactly how much money they make off the convoys.

The U.S. military estimated last year that $360 million in U.S. tax dollars ended up in the hands of the Taliban, criminals and power brokers with ties to both. More than half the losses flowed through a $2.1 billion contract to truck huge amounts of food, water and fuel to American troops across Afghanistan.

The military said only a small percentage of the $360 million was funneled to the Taliban and other insurgent groups. But even a small percentage would mean millions of dollars, and the militants, who rely on crude weaponry, require relatively little money to operate.

The military investigated one power broker who owned a private security company and was known to supply weapons to the Taliban. The power broker, who was not named, received payments from a trucking contractor doing business with the U.S. Over more than two years, the power broker funneled $8.5 million to the owners of an unlicensed money exchange service used by insurgents.

A congressional report in 2010 called "Warlord, Inc." said trucking contractors pay tens of millions of dollars annually to local warlords across Afghanistan in exchange for guarding their supply convoys, some of which are suspected of paying off the Taliban.

The military instituted a new, roughly $1 billion trucking contract last September with a different set of companies that it claims has reduced the flow of money to insurgents by providing greater visibility of which subcontractors those firms hire, said Maj. Gen. Richard Longo, head of a U.S. anti-corruption task force in Afghanistan.

But it's very difficult to cut off the illegal transfers completely, he said.

"I think it would be naive on my part to suggest that no money is going to the enemy," said Longo. "I think there is still money flowing to criminals, and I think that the nexus between criminals and the insurgency is there."

Rep. John Tierney, the Democrat from Massachusetts who led the Warlord, Inc. report, said the new contract has resulted in some increased contractor oversight and accountability, but "the Department of Defence must take more aggressive steps to keep our military personnel safe and to protect taxpayer dollars from going to our enemies in Afghanistan."

The U.S. pushed Pakistan hard to reopen the NATO supply line through the country because it had been forced to use a longer route that runs into northern Afghanistan through Central Asia and costs an additional $100 million per month.

The Taliban commanders interviewed by the AP said the northern route was less lucrative for them because fewer trucks passed through southern and eastern Afghanistan, and contractors seemed to have less money to direct toward the insurgents. It's unclear if that is a result of the new trucking contract implemented by the military.

But the commanders said they were determined to get their cut as the flow of trucks resumes from Pakistan — a process that has been slowed by bureaucratic delays, disputes over compensation and concerns about security.

"We charge these trucks as they pass through every area, and they are forced to pay," said the commander operating in Ghazni. "If they don't, the supplies never arrive, or they face the consequence of heavy attacks."

Prior to the November attack, the U.S. and other NATO countries shipped about 30 per cent of their nonlethal supplies from Pakistan's southern port city of Karachi through two main crossings on the Afghan border.

The route through Pakistan will become even more critical as the U.S. seeks to withdraw most of its combat troops by the end of 2014, a process that will require tens of thousands of containers carrying equipment and supplies.

"We have had to wait these past seven months for the supply lines to reopen and our income to start again," said the Taliban commander in Ghazni. "Now work is back to normal."

____

Abbot reported from Islamabad and can be reached at https://twitter.com/sebabbot . Associated Press writer Richard Lardner contributed to this report from Washington.



FOREX-Euro firmer vs dollar; Aussie rises on stimulus hopes - Reuters

Tue Jul 31, 2012 2:05am EDT

* Euro edges up vs dollar but below recent 3-week high

* Aussie dollar still strong on European stimulus hopes

* Focus on this week's ECB policy decision

By Ian Chua and Masayuki Kitano

SYDNEY/SINGAPORE, July 31 (Reuters) - The euro edged higher against the dollar on Tuesday but stayed off a recent three-week high, while the Australian dollar hit a four-month high, supported by expectations that major central banks may add more stimulus.

The single currency moved up 0.1 percent from late U.S. trade on Monday to $1.2274, but remained stuck below the high of $1.2390 hit last Friday.

The focus is on the European Central Bank's policy meeting on Thursday, after ECB President Mario Draghi pledged last week to do whatever was necessary to protect the euro zone from collapse.

"I think there are more options on the table than we can think of right now. There's a lot of anticipation after Draghi's comments," said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore.

"The market seems to think that there are going to be some strong measures and this should boost the commodity currencies and some of the emerging market currencies," he said.

A popular trade has been to short the euro against the Australian dollar, New Zealand dollar and some emerging market currencies, Bargmann added.

Draghi's remarks last week have stirred market expectations that the ECB may soon reactivate its bond-buying programme to help cut Spanish and Italian borrowing costs.

"The most significant possible measure would be for the ECB to buy bonds and to leave such purchases unsterilised, but I don't think such steps can be taken as they are likely to meet German opposition," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

Last week, the ECB bought no government bonds via its Securities Markets Programme (SMP) for a 20th straight week and it has barely conducted such purchases this year, even as rising borrowing costs in Spain fuelled jitters Madrid may eventually need a full-blown sovereign bailout.

When the ECB bought government bonds in the past, it offset, or sterilised, its purchases by draining equal amounts of liquidity from the banking system to avoid stoking inflation.

The ECB probably won't go so far as to deviate from this convention, SMBC's Okagawa said.

"At the same time, with market expectations running high, they can't afford to do nothing. They raised the bar high on their own," he added.

In any event, traders and analysts are sceptical that ECB bond-buying by itself would be enough to change the euro's weak overall trend.

"It is a short-term relief, but it is not like people are going to invest in Europe suddenly for that reason," said Bargmann at RBS.

"We've already seen some serious diversification, not just out of the periphery but out of Europe altogether and these are longer term decisions and they are not going to turn around in the short-term," Bargmann said, referring to a shift in asset allocation by central bank reserve managers out of the euro.

AUSTRALIAN DOLLAR

The euro eased 0.2 percent against the high-flying Australian dollar to A$1.1656, after having hit a record low around A$1.1646 the previous day.

The Aussie and other high-beta currencies, which are relatively volatile and tend to benefit when investor optimism about the outlook for the global economy picks up, have been among the best performers recently.

Such currencies have gotten a lift from market expectations that both the ECB and Federal Reserve are closer to providing more aid for their respective economies.

The Aussie rose 0.3 percent to $1.0526, having hit a four-month high of $1.0538 earlier on Tuesday.

The modest rise in the euro weighed on the dollar index, which measures the greenback's value against a basket of major currencies. The dollar index stood at 82.749, holding near a three-week low of 82.343 hit last week.

Against the yen, the dollar edged up 0.1 percent to 78.26 yen.

While the Fed is seen likely to hold off from adopting another bond-buying programme at its two-day policy meeting that starts on Tuesday, some market players think the U.S. central bank might adopt such monetary stimulus in coming months.