Wednesday, 28 March 2012

More CEOs ready to start hiring again: survey

(Reuters) - U.S. chief executives' view of the economy brightened in the first quarter of 2012, with a growing number ready to hire more workers over the next six months, according to a Business Roundtable survey.

Improving demand in the United States offset concerns that Europe's economy may be headed into recession, helping to give the Roundtable's CEO Economic Outlook Index its largest lift since the third quarter of 2009, the group said on Wednesday.

On the key metric of employment, 42 percent of CEOs said they planned to add staff in the United States over the next six months. That is a 16 point improvement from the December reading and more than double the 16 percent of CEOs who expect to cut jobs.

"This suggests hiring will continue," said James McNerney, CEO of Boeing Co (BA.N) and chairman of the Roundtable.

Improving U.S. demand is offsetting a weakening Europe, he said.

"The U.S. is picking up. Europe is the one that is really headed to negative territory," McNerney told reporters on a conference call. "While Asia and China are slowing down, they are still at a very high growth rate, and we need to hire people for to satisfy their demand."

Big U.S. manufacturers including General Electric Co (GE.N) and Caterpillar Inc (CAT.N) have been adding workers this year in response to rising demand for their products, ranging from refrigerators to excavators, and a Labor Department report last week showed new jobless claims in the United States at a four-year low.


Of the 128 CEOs surveyed March 1-19, 48 percent said they expected to boost their U.S. capital spending in the next six months, and 81 percent forecast a rise in sales.

The group's CEO Economic Outlook Index, which measures sales, hiring and capital spending, rose to 96.9 in the first quarter from 77.9 in the 2011 fourth quarter. Any reading above 50 indicates growth.

The CEOs raised their forecast for U.S. real gross domestic product growth for 2012 to 2.3 percent from 2 percent in December.

The findings come at the end of a quarter that saw Wall Street gain confidence that the U.S. recovery from recession was gaining steam, sending the Standard & Poor's 500 index .SPX up nearly 12 percent over the past three months.

Investors will get a more detailed look at Corporate America's outlook next month, when most of the nation's large companies, ranging from Alcoa Inc (AA.N) to JPMorgan Chase & Co (JPM.N), report first-quarter results.

Business Roundtable member companies generate $6 trillion in annual revenue and employ more than 14 million people.

(Reporting By Scott Malone; editing by John Wallace)

Tuesday, 27 March 2012

Data Saves Dollar after Bernanke's Dovish Display

Tue, Mar 27 2012, 14:29 GMT

Fed Chairman, Bernanke

by Nicky Ong - Traders Corner
The S&P/Case-Shiller index showed houses prices dropped in line with expectation, and more importantly at a slower rate than last month. As a result the dollar managed to reverse some of the losses it has experienced over the past couple of days.

Similarly CB Consumer confidence came in at 70.2, slightly off the 70.3 expected, but still close to the highest levels since this time last year. Positive data has been welcomed by dollar bulls as the cloud of ‘QE3’ has given license to sell the dollar over the past 24 hours.

The dollar has been under heavy selling pressure as Federal Reserve Chairman was surprisingly dovish when he addressed the Association for business economist yesterday. Despite the improvements in the U.S labour market Bernanke warned unemployment remained far from normal and required a continuation of accommodative monetary policy, essentially opening the door for ‘QE3’.

Over the past few months the greenback has strengthened against the likes of the Aussie, Kiwi and Yen as traders adjusted their view on monetary policy, with interest rate futures pricing in a potential rate hike before the 2014 forecast. However, Bernanke put a dent in these expectations yesterday.

This development may well reduce the positive sentiment towards the dollar somewhat, but there is no masking the improvement in the U.S economy and labour market which will be bullish for the greenback.

The Euro was propelled higher yesterday against the dollar on the back of Bernanke’s rhetoric, and a continuation of these gains were experienced in early European trade as Italy managed a successful bond auction. But gains were halted as GFK German Consumer Climate missed expectation, showing confidence dropped for the 1st time in seven months as higher oil prices reduce spending power for households.

Also helping the single currency gain against the dollar is a report suggesting German Chancellor Angela Merkel is willing to increase support for the debt ridden region by running both the temporary and permanent rescue funds in parallel. The meeting scheduled on the 30th March will provide the platform for EU Finance Ministers to discuss additional supportive measures.

Finally, it appears the Japanese Yen is set for more weakness. The Yen has been by far the worst performer of 2012 as the Bank of Japan’s monetary policies aimed at weakening their currency, combined with ultra-low rates have made the Yen an attractive funding currency for carry trades.

Monday, 26 March 2012

On Work, School, Soccer and how hard it is to get a fast internet connection in the 21st Century

Woke up with a rumbling tummy threatening to spoil my day. Decided to skip lunch.I weighed my options early in the morning-what to skip between work and lunch.

Learned of Fabrice Muamba's situation with shock-fortunately the news from his hospital is encouraging. The Red is now 4 points ahead in the league table. Not much in the way of new hirings. Need to get a new modem to start a fresh challenge (read job) start.

Gold ounce looking to go down. Currently at $1694. Submitted a Spirit of Easter Article on Yahoo. Thankfully just beat the deadline.

Glad to be moving closer to performance targets at work. One of our clients is teetering on the brink of bankruptcy and seeking a bailout. Will wait to see how that one goes. Messi scored thrice yesterday- pulling away from the greatest chasing pack which includes Maradona, Pele and Zidane.

My sleep-deprived body is threatening to go on strike. Luckily, It's the last day of the week at work. I think that I can do better with my performance targets without anyone breathing down my neck-thank you.
Elsewhere, Man City had a narrow win over Chelsea and they are over the moon. Let's see how they keep up over the weekend.

Spent most of the day repairing my computer. Can't complain- that's on my weekend schedule but I lost a lot of hours just to establish internet connection. Watching DVD series should be my last resort to wind down the week sort of.

Man City lose 2 points to wonder strike from Peter Crouch-the ball didn't even touch the ground from clearance to net-must be contender for goal of the Premiership.
The internet connection is still not established so this can be rated by yours truly a slack weekend. Network providers should really pull up their socks before they cry over lost revenues.

Tuesday, 20 March 2012

Gold drops as economic optimism boosts dollar

Pre-produced parts of watches on display at a plant of gold refiner & bar manufacturer Argor-Heraeus in the Swiss town of Mendrisio, March 1, 2012

By Amanda Cooper
LONDON | Tue Mar 20, 2012 9:45am EDT

(Reuters) - Gold fell on Tuesday, hurt by strength in the dollar which profited from the growing view in the market that the U.S. economy is on a firmer footing, ending a three-day rally in the bullion price.
The dollar benefited from wariness in the market stemming from talks between Italy's government and unions on the reforms needed to turn around the euro zone's third largest economy, which kept the euro under pressure and dented equities.
Data from the United States in the last couple of weeks has suggested the economy is recovering more quickly than anticipated, lessening the need for the Federal Reserve to buy government bonds to anchor interest rates and support growth.
Adding to the negative mood in gold was a sharp rise in benchmark 10-year U.S. Treasury yields, which have gained more than a third of a percentage point in less than a week, while holdings of the metals in exchange-traded products staged their largest one-day drop since late January.
Spot gold was down 0.65 percent on the day at $1,649.69 an ounce by 1325 GMT, having slid by nearly 3 percent so far this month.
"At the moment, it's not looking great for gold. On the one hand you have the strengthening dollar against the euro hitting the market and you also don't have that much support from the physical market," RBS analyst Nikos Kavalis said.

"We are seeing fairly weak conditions for gold, you can see it in the price. At the same time, we are still standing by our bullish call for the market. We think prices can, and will, go higher later in the year, so I would say at current prices, we would definitely be buyers," he added.
Gold's correlation with Treasuries has reversed in the last week, meaning the bullion price is more likely to move in tandem with Treasury prices than against them.

A rise in yields increases the appeal of the U.S. dollar for foreign investors, which in turn delivers a double blow to gold, which tends to fall when the dollar strengthens as non-U.S. investors sell their bullion holdings to take greater profit on their position in their local currency and secondly increases the so-called "opportunity cost" of owning the metal.
When interest rates are low, investors forfeit less of a premium for holding gold, which bears no yield or dividend, rather than stocks or bonds. An environment of rising rates increases this opportunity cost.
Holdings of gold in the world's major ETPs saw their largest one-day outflow in two months on Tuesday, falling by over 56,000 ounces to 70.843 million ounces, reflecting some of the desire among investors to hold assets that profit strongly from an upswing in the business cycle, such as equities.
A strike by the jeweler industry in India, the world's largest gold consumer, in protest against a government plan to raise the import duty on bullion, has cut physical demand noticeably this week.
Anne-Laure Tremblay, an analyst at BNP Paribas, said while there were some headwinds for gold in the short-term, she was maintaining her price forecast for this year at $1,850.00/oz.

"Beyond the short term, we remain positive on gold's outlook as the fundamentals are still solid. These include high liquidity, low interest rates and sovereign debt concerns," she said.
In other precious metals, silver fell by 2.8 percent to $32.28 an ounce, while U.S. May silver futures were down 1.9 percent at $32.30.
Platinum fell 1.1 percent to $1,657.00 an ounce while palladium fell 1.0 percent to $695.00 an ounce.

(Reporting by Amanda Cooper; editing by Elaine Hardcastle)

Monday, 12 March 2012

Middle East airlines 'unstoppable'

People walk with their baggage trolleys near the entrance to the Emirates Airlines departures terminal at Dubai International Airport, Feb 6th 2012

By Tim Hepher

PARIS | Mon Mar 12, 2012 6:37am EDT

(Reuters) - A top Emirates executive has delivered a warning to Europe's struggling airlines that they could lose more business to booming Middle East carriers as they pay the price of years of political neglect.

Thierry Antinori, who walked away from the top job at Austrian Airlines to join the largest Arab carrier last year, said airlines such as Emirates were well placed to continue expanding while some rivals lurched into a downward spiral of investment.

"I think with our geographical position and the quality of products and networks we are offering, there is clearly an opportunity for the Middle East airlines to strengthen their position on the global industry map," he told Reuters.

"I even consider the next years as an opportunity for Emirates to increase the gap with some of our competitors, because we are just looking at what the customer wants."

The Frenchman dismissed the possibility that Dubai-based Emirates would step in to bail out or buy European airlines and repeated its reluctance to join one of the major alliances.

In December, Gulf rival Etihad Airways of Abu Dhabi took a stake of almost 30 of Germany's Air Berlin (AB1.DE). There are also reports that Etihad is interested in holding talks with the Irish government over the sale of its 25 percent stake in Aer Lingus (AERL.I).

"We prefer to rely on our product, so we prefer to buy airplanes than airlines," the Emirates official said.

"We do not lose time in discussion with alliances, which are not very clear for the customer to understand. They say 'we offer you seamless travel' but in the end they offer seamless trouble," said Antinori, who joined Emirates as Executive Vice President, Passenger Sales Worldwide, in September.

Antinori's decision to defect from Lufthansa came days before he was due to become chief executive of loss-making Austrian and took the industry by surprise. Six months later, he has a blunt assessment of the malaise gripping European airlines, half a dozen of which have gone bankrupt this year.

"Aviation was made a strategic industry in Dubai 20 years ago. In Europe it is not strategic and it is not important for politicians to win elections. That is why airline lobbying is not heard, investments are blocked, taxes are increasing and as a result airlines do not have modern fleets and then they save money on products."

Recent aircraft improvements have put most of the world's population within a direct flight from the Gulf, resulting in airport and fleet expansion and shifting more of the global network map to large hubs such as Dubai from the U.S. and Europe.

"You cannot stop the Middle East airlines because they are in the centre of the world; they have the best infrastructure... and never save money on product," Antinori said.

"That is the big difference with Europe (where) there is no strategy, and because of that they reduce the quality and the infrastructure, and the fleets become older."


The critique of European aviation policy comes as the industry faces tough battles over airport expansion in the UK or a new system of European Union charges for jet emissions -- two issues that also affect airlines in the Gulf and elsewhere.

Antinori said the EU's emissions trading scheme would cost Emirates 40 million euros in 2012, rising to half a billion in 2020, and this would ultimately mean higher ticket prices.

Emirates meanwhile remains locked in a battle over access to Germany, where it has long sought to secure landing rights in Berlin and Stuttgart, as well as access in Canada.

Emirates' decision to choose the Berlin Air Show in 2010 to order 32 extra A380s was seen as a reminder of its importance for Airbus jobs, many of which are in Germany. But the airline is still unable to add to four existing German entry points.

"We understand that governments need time to think. We are patient; I am sure we will find a solution," Antinori said.

Emirates is the world's largest buyer of A380s, with a total of 90 on order, and Boeing's 777 mini-jumbos.

European airlines accuse Emirates and others in the Gulf oil region of expanding on the back of subsidies.

Emirates denies this, saying it pays a full price for its fuel and that critics like Air France, which unveiled steep losses last week, should examine their own business models.

Antinori said Emirates was outperforming the industry but was not immune to record fuel prices.

"We were able in the last months to increase our load factor in comparison with previous years. The revenue increase at Emirates is higher than the percentage increase in seats."

Middle East passenger traffic grew 14.5 percent in January, versus 5.3 percent in Europe, according to airlines body IATA.

(Editing by Reed Stevenson)