> Finance & Stock Exchange
US rice slides daily limit for third straight day
Reuters: [2008-05-15 23:30:00]
CHICAGO, May 15 (Reuters) - U.S. rough rice futures on the Chicago Board of Trade fell the maximum trading limit for the third straight day on Thursday as easing concerns about the world's supply of rice triggered profit-taking, traders said.
* The rice market was technically weak, gapping lower the past two sessions and attracting speculative profit taking.
* July rice <RRN8> ended down the $1.15 per cwt limit at $20.34. The back months closed 27 to 61-1/2 cents weaker.
* July has dived more than $2.50 per cwt since last Friday's close, slipping below its 50-day moving average of $20.96 on Thursday. Rice began slipping in reaction to UDSA's forecast for a record world crop for 2008 and stocks to grow.
* CBOT rice hit a record top above $25 a cwt in late April on fears of rice shortages and hoarding.
* USDA's reported weekly exports sales of 84,000 tonnes, all old-crop. The tally was 18 percent below the previous week and Mexico was the biggest buyer with 43,600 tonnes.
* Private analytical firm Informa Economics forecast 2008 U.S. rice plantings at 2.94 million acres, versus USDA's March forecast of 2.77 million, traders said.
* After the close there were roughly 200 July contracts offered limit down.
* No futures traded synthetically via options after the limit-down move in July which froze futures trading in that month, traders said.
* Trading limit remains at $1.15 for Friday.
* Commodity funds continued to roll their July longs in the deferred months before the lead month stopped trading.
* Some 20 percent of Myanmar rice fields were damaged during the recent cyclone, including the country's Irrawaddy delta rice bowl, the U.N. food agency said. [ID:nBKK202161].
* Overnight May deliveries were light at three contracts. They were met by commercial stopping; ADM house took all.
For detailed report click on [GRA/]. (Reporting by Christine Stebbins) ((christine.stebbins@thomsonreuters.com; +1 312 408 8720; Reuters Messaging:christine.stebbins.reuters.com@reuters.net)) Keywords: MARKETS CBOT RICE
TREASURIES-Bonds gain on soft manufacturing, jobs data
Reuters: [2008-05-15 23:13:00]
(Updates prices, adds comments, changes byline)
* Weak U.S. output, manufacturing reports boost bonds
* Continuing jobless claims signal softening job market
* Expectations for year-end rate hike intact
By Ellen Freilich
NEW YORK, May 15 (Reuters) - U.S. Treasuries prices climbed on Thursday after signs of softness in manufacturing and the job market reminded investors that the economy remains weak.
The bond market stuck to its newfound view that inflation will force the Federal Reserve to start hiking interest rates by year-end, but rate futures contracts did cut the chances of a rate hike as soon as October to near 40 percent, from as high as 70 percent on Wednesday.
The recent shift in investors' perception about the course of Fed monetary policy pushed the two-year note's yield to four-month highs around 2.60 percent earlier this week.
But on Thursday, the 2-year Treasury note's price rose 5/32 and its yield easing back down to 2.44 percent <US2YT=RR> from 2.54 percent late Wednesday.
Traders said a negative reading on the Empire State manufacturing report for May, a rise in new jobless claims last week and a surprisingly sharp drop in April industrial production propelled bond prices higher.
The Philadelphia Federal Reserve Bank survey showed that factory activity in the U.S. Mid-Atlantic region shrank for a sixth straight month in May.
"The bond rally made a lot of sense given the nature of the economic data," said Michelle Meyer, an economist at Lehman Brothers in New York. "We had a very disappointing industrial production report and both the Empire State manufacturing and the Philly Fed indexes suggested continued contraction in manufacturing."
News that U.S. home builder sentiment moved nearer to a record low set in December as housing market conditions worsened also fed the bond market rally, Meyer said.
The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index fell within one point of the record low of 18 set in December 2007. Readings below 50 indicate more builders view market conditions as poor than favorable.
NAHB measures of future housing activity, including indexes of sales expected in the next six months and prospective-buyer traffic, suggested that builders will continue to cut back on construction, Meyer said.
Bonds made headway despite stiff competition from stocks for investors' cash. Major stock indexes ended higher as technology and retail stocks did better.
Wachovia Securities senior economist Gary Thayer said news that Congress had passed legislation that could curb some oil market speculation gave stocks and bonds an afternoon lift.
The Senate and House of Representatives overwhelmingly approved legislation to give the government's futures market regulator more authority over oil and natural gas trading.
With oil prices near record highs, Thayer said bond and stock investors responded positively to the possibility that less speculative buying could tame oil prices somewhat, alleviating some concerns about inflation "down the road."
The benchmark 10-year Treasury note's price, which moves inversely to its yield, was up 25/32 in late trade, its yield easing to 3.83 percent <US10YT=RR>, still not far from the four-month high above 3.98 percent hit on Wednesday.
Treasury yields have carved out new, higher ranges over the past two weeks as risk aversion associated with the credit crisis has started to ebb and investors have started to buy more stocks and non-government bonds.
Federal Reserve Chairman Ben Bernanke on Thursday strongly urged financial institutions at the center of the credit crisis to raise capital. "The Fed will keep hammering away at that theme," said Cary Leahey, an economist at Decision Economics in New York. "The Fed thinks it has done a lot to ease the credit crisis and financial institutions now have to pick up the ball and run with it."
The 30-year U.S. Treasury bond <US30YT=RR> rose 29/32 in price, its yield easing to 4.56 percent from 4.62 percent on Wednesday. ((Ellen.Freilich@thomsonreuters.com; +1-646-223-6309; Reuters Messaging: ellen.freilich.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com
* BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com)) Keywords: MARKETS BONDS
---------------- MARKET SNAPSHOT AT 1645 EDT (2045 GMT) --------------
June T-Bond <USM8> 116-24/32 (+1-7/32)
June 10-Year note <TYM8> 115-14/32 (+28/32)
Change vs Current
previous NY close yield
Three-month bills <US3MT=RR> 1.795 (+0.015) 1.828
Six-month bills <US6MT=RR> 1.830 (-0.035) 1.873
Two-year note <US2YT=RR> 99-13/32 (+6/32) 2.434
Five-year note <US5YT=RR> 100-5/32 (+19/32) 3.087
10-year note <US10YT=RR> 100-14/32 (+26/32) 3.822
30-year bond <US30YT=RR> 97-2/32 (+31/32) 4.555
--------------------------- SWAP SPREADS ----------------------
May 15 May 14 May 13 May 12 May 9 May 8 May 7
2-YR 78.50 83.00 81.00 79.75 80.50 78.75 80.25
3-YR 84.00 87.50 86.00 84.75 84.50 83.75 85.00
5-YR 76.75 81.75 81.75 80.25 79.50 77.75 78.00
10-YR 56.50 61.00 61.75 60.25 60.00 58.75 61.00
30-YR 27.00 31.50 32.25 31.50 31.00 30.25 32.00
TREASURIES-Bonds gain on soft manufacturing, jobs data
Reuters: [2008-05-15 23:13:00]
(Updates prices, adds comments, changes byline)
* Weak U.S. output, manufacturing reports boost bonds
* Continuing jobless claims signal softening job market
* Expectations for year-end rate hike intact
By Ellen Freilich
NEW YORK, May 15 (Reuters) - U.S. Treasuries prices climbed on Thursday after signs of softness in manufacturing and the job market reminded investors that the economy remains weak.
The bond market stuck to its newfound view that inflation will force the Federal Reserve to start hiking interest rates by year-end, but rate futures contracts did cut the chances of a rate hike as soon as October to near 40 percent, from as high as 70 percent on Wednesday.
The recent shift in investors' perception about the course of Fed monetary policy pushed the two-year note's yield to four-month highs around 2.60 percent earlier this week.
But on Thursday, the 2-year Treasury note's price rose 5/32 and its yield easing back down to 2.44 percent <US2YT=RR> from 2.54 percent late Wednesday.
Traders said a negative reading on the Empire State manufacturing report for May, a rise in new jobless claims last week and a surprisingly sharp drop in April industrial production propelled bond prices higher.
The Philadelphia Federal Reserve Bank survey showed that factory activity in the U.S. Mid-Atlantic region shrank for a sixth straight month in May.
"The bond rally made a lot of sense given the nature of the economic data," said Michelle Meyer, an economist at Lehman Brothers in New York. "We had a very disappointing industrial production report and both the Empire State manufacturing and the Philly Fed indexes suggested continued contraction in manufacturing."
News that U.S. home builder sentiment moved nearer to a record low set in December as housing market conditions worsened also fed the bond market rally, Meyer said.
The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index fell within one point of the record low of 18 set in December 2007. Readings below 50 indicate more builders view market conditions as poor than favorable.
NAHB measures of future housing activity, including indexes of sales expected in the next six months and prospective-buyer traffic, suggested that builders will continue to cut back on construction, Meyer said.
Bonds made headway despite stiff competition from stocks for investors' cash. Major stock indexes ended higher as technology and retail stocks did better.
Wachovia Securities senior economist Gary Thayer said news that Congress had passed legislation that could curb some oil market speculation gave stocks and bonds an afternoon lift.
The Senate and House of Representatives overwhelmingly approved legislation to give the government's futures market regulator more authority over oil and natural gas trading.
With oil prices near record highs, Thayer said bond and stock investors responded positively to the possibility that less speculative buying could tame oil prices somewhat, alleviating some concerns about inflation "down the road."
The benchmark 10-year Treasury note's price, which moves inversely to its yield, was up 25/32 in late trade, its yield easing to 3.83 percent <US10YT=RR>, still not far from the four-month high above 3.98 percent hit on Wednesday.
Treasury yields have carved out new, higher ranges over the past two weeks as risk aversion associated with the credit crisis has started to ebb and investors have started to buy more stocks and non-government bonds.
Federal Reserve Chairman Ben Bernanke on Thursday strongly urged financial institutions at the center of the credit crisis to raise capital. "The Fed will keep hammering away at that theme," said Cary Leahey, an economist at Decision Economics in New York. "The Fed thinks it has done a lot to ease the credit crisis and financial institutions now have to pick up the ball and run with it."
The 30-year U.S. Treasury bond <US30YT=RR> rose 29/32 in price, its yield easing to 4.56 percent from 4.62 percent on Wednesday. ((Ellen.Freilich@thomsonreuters.com; +1-646-223-6309; Reuters Messaging: ellen.freilich.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com
* BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com)) Keywords: MARKETS BONDS
---------------- MARKET SNAPSHOT AT 1645 EDT (2045 GMT) --------------
June T-Bond <USM8> 116-24/32 (+1-7/32)
June 10-Year note <TYM8> 115-14/32 (+28/32)
Change vs Current
previous NY close yield
Three-month bills <US3MT=RR> 1.795 (+0.015) 1.828
Six-month bills <US6MT=RR> 1.830 (-0.035) 1.873
Two-year note <US2YT=RR> 99-13/32 (+6/32) 2.434
Five-year note <US5YT=RR> 100-5/32 (+19/32) 3.087
10-year note <US10YT=RR> 100-14/32 (+26/32) 3.822
30-year bond <US30YT=RR> 97-2/32 (+31/32) 4.555
--------------------------- SWAP SPREADS ----------------------
May 15 May 14 May 13 May 12 May 9 May 8 May 7
2-YR 78.50 83.00 81.00 79.75 80.50 78.75 80.25
3-YR 84.00 87.50 86.00 84.75 84.50 83.75 85.00
5-YR 76.75 81.75 81.75 80.25 79.50 77.75 78.00
10-YR 56.50 61.00 61.75 60.25 60.00 58.75 61.00
30-YR 27.00 31.50 32.25 31.50 31.00 30.25 32.00
Canada dollar closes at parity, bonds rise
Reuters: [2008-05-15 23:11:00]
* Canadian dollar closes at parity with U.S. dollar
* Oil provides background for currency's strength
* Bonds higher across the curve in thin trading
By John McCrank
TORONTO, May 15 (Reuters) - The Canadian dollar closed at
parity against the U.S. dollar on Thursday as robust energy
prices helped it recover from early losses after the release of
weak manufacturing sales data.
Domestic bond prices rose across the curve as the weak
domestic data highlighted the impact the U.S. economic downturn
is having on Canada.
The Canadian currency closed at C$1.0000 to the U.S.
dollar, up from C$1.0043 to the U.S. dollar, or 99.57 U.S.
cents, at Wednesday's close.
It was the currency's highest close since March 18.
"It really does seem like the environment in the background
is improving for the Canadian dollar in the short term and
that's partly to do with energy prices... but also developments
in other economies," said David Watt, senior currency
strategist at RBC Capital Markets.
The price of U.S. crude oil <CLc1>, while off its record
high of nearly $127 a barrel hit earlier this week, remains
lofty. Canada is a major oil exporter and its currency is often
influenced by the commodity.
The Canadian dollar was also up against the crosses, such
as the currencies of New Zealand, the Britain, and the
euro-zone.
Watt said that was due to weaker growth outlooks and the
potential for interest rate cuts in those places. Meanwhile, in
the U.S., Canada biggest trading partner, growth is holding up
better than many people expected.
So while the Canadian and U.S. central banks have both made
deep cuts to their interest rates, they may be ahead of the
curve compared to other major economies.
The Bank of Canada is expected to make at least one more 25
basis point cut in its key overnight rate to 2.75 percent at
its next fixed announcement data on June 10.
Domestic data helped bolster that view, as Canadian
manufacturing sales fell 1.6 percent in March after two months
of gains, hurt by an ongoing slump in the auto industry.
Analysts were looking for a 0.2 percent rise.
BONDS RISE
Canadian bond prices rose across the curve helped by the
weaker-than-expected manufacturing data, and light trade ahead
of the upcoming Victoria Day long weekend.
"Basically, traders just spent today squaring up their
positions since there is an early bond close tomorrow," said
Sheldon Dong, fixed income strategist at TD Waterhouse Private
Investment in Toronto.
Canada has no more data due this week but a slew of reports
are slated for release next week, including April inflation
data on Wednesday and March retail sales figures the following
day.
The two-year bond rose 9 Canadian cents to C$101.92 to
yield 2.772 percent. The 10-year rose 32 Canadian cents to
C$103.37 to yield 3.560 percent.
The yield spread between the two- and 10-year bonds was
78.6 basis points, up from 77.7 at the previous close.
The 30-year bond climbed 37 Canadian cents to C$116.32 for
a yield of 4.040 percent. In the United States, the 30-year
Treasury yielded 4.552 percent.
The three-month when-issued T-bill yielded 2.63 percent,
down from 2.68 percent at the previous close.
(Editing by Renato Andrade)
((john.mccrank@thomsonreuters.com; +1 416 941 8083; Reuters
Messaging: john.mccrank.reuters.com@reuters.net))
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Keywords: MARKETS CANADA DOLLAR BONDS
Average primary bank borrowing from Fed hit record
Reuters: [2008-05-15 22:59:00]
NEW YORK, May 15 (Reuters) - Average daily borrowing by high-quality U.S. banks from the Federal Reserve rose to a record this week, surpassing the average borrowing in the week of the Sept. 11 attacks, the Fed said on Thursday.
Commercial banks' primary credit borrowings were an average $14.42 billion per day in the week ended May 14, higher than the daily rate of $11.72 billion in the Sept. 11, 2001 week, it said. (Reporting by Richard Leong) ((richard.leong@thomsonreuters.com ; +1 646 223 6313; Reuters Messaging: richard.leong.reuters.com@reuters.net )) Keywords: USA FED/DISCOUNT RECORD
Next: ANALYSIS-Food price surge may be nearing end