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Bond funds stock up on Treasuries in prep for market shock
By Tim McLaughlin BOSTON (Reuters) - U.S. corporate bond funds this year are adding Treasuries to their holdings at more than twice the rate of corporate debt amid concern that the struggling European economy and potential changes in Federal Reserve policy will drag down profits at U.S. corporations. Through September, corporate bond portfolios boosted their holdings of U.S. government debt by 15 percent, compared with a 6.5 percent increase in corporate bonds during the same period, according to Lipper Inc data. The funds now hold about $13 billion in Treasuries, 15 percent more than the $11. ...
Asia shares slip on profit-taking
Asian markets slipped on profit-taking Thursday following the previous day's hefty gains but losses were limited after a closely watched indicator showed a slight pick-up in Chinese manufacturing activity. The dollar edged up following a surprising rise in US inflation while the euro faced fresh selling pressure owing to speculation that the European Central Bank will widen its bond-buying programme to boost the eurozone economy.
Support group of Japan's new trade minister spent funds at S&M bar
TOKYO (Reuters) - Japan's new trade minister, installed this week to replace a minister caught in a funding scandal, said on Thursday a political support group of his spent money at a racy bar, a potential new headache for Prime Minister Shinzo Abe. Yoichi Miyazawa, 64, head of the Ministry of Economy, Trade and Industry, said he learned from a news report of the 18,230 yen ($170) that the support group spent at the sadomasochism-themed bar in his political district of Hiroshima. "It is true such expenses were made," Miyazawa told reporters. "But I myself did not go there at all. ...
Spanish banks should do well in ECB stress tests: De Guindos
MADRID (Reuters) - Spanish Economy Minister Luis de Guindos said on Wednesday he was confident Spanish lenders would do well in the European Central Bank's banking health checks, the results of which will be made public on Sunday. "We can be confident that ... Spanish banks will obtain good results in the tests which the ECB has carried out before becoming the sole supervisor (of euro zone banks)," De Guindos said in a speech at a conference in Madrid. ...
Popular Mexican musician shot dead in cartel-riddled northwest
MEXICO CITY (Reuters) - A member of Banda el Recodo, a traditional Mexican band also popular in the United States, was found dead from a gunshot to the neck on Wednesday in the northwestern Mexican resort city of Mazatlan, the group and local authorities said. Aldo Sarabia, who played the tuba in the group, was reported missing last week. It was the latest in a string of killings and suspected massacres in Mexico in recent weeks and months that have cast a shadow over President Enrique Pena Nieto's drive to focus public attention on economic reforms rather than grisly violence. ...
APEC finance chiefs see 'downside risks' to global economy
EU nations threaten to block green energy rules at summit talks
By Barbara Lewis BRUSSELS (Reuters) - EU leaders face a long day on Thursday as they seek to agree on a new decade of climate and energy policy at a summit in Brussels, with nations from Poland to Portugal threatening to block a deal. If the European Union can manage an accord, including a more ambitious greenhouse gas cut, it will be the first major economic bloc to set an emissions target for 2030 and would set the tone ahead of United Nations talks next year in Paris on a global pact to manage climate change. ...
European markets rise on talk of central bank action
Catalans: independence drive will intensify unless Madrid negotiates
By Mike Peacock LONDON (Reuters) - After scuppering a referendum, Spain risks intensifying Catalonia's push for independence unless it negotiates over transferring more powers, the region's economy minister said. Spain's government asked the constitutional court last month to declare a referendum planned for Nov. 9 illegal on the grounds it breached the constitution. The court suspended the vote until it ruled on the case, which could take years. ...
South Africa sees bigger budget shortfall as growth slows
By Stella Mapenzauswa CAPE TOWN (Reuters) - South Africa's economic growth will be slower and its budget deficit bigger this year than forecast, the finance ministry said on Wednesday, vowing to keep a tight grip on spending to stop the country's credit rating slipping to junk. In his first policy statement since being appointed in May, Finance Minister Nhlanhla Nene warned that Africa's most advanced economy was not making sufficient progress to reduce poverty and create jobs, deepening inequality. ...
South Africa's Northam seals $600 mln black empowerment deal
By Zandi Shabalala JOHANNESBURG (Reuters) - South Africa's Northam Platinum has sealed a $600 million deal that will increase its black ownership to over a third and inject 4.6 billion rand ($420) in cash to fund growth and potential acquisitions. South African companies are required to reach at least 26 percent black ownership this year under the government's policy of black economic empowerment, or "BEE", designed to address the inequalities of the apartheid system that ended in 1994. ...
Brazil's Rousseff pulls ahead of Neves as election nears
By Anthony Boadle BRASILIA (Reuters) - Brazilian President Dilma Rousseff pulled ahead of opposition candidate Aecio Neves in another poll on Wednesday and looks like a slight favorite heading into what is expected to be the country's tightest election in decades. The Datafolha poll was the fourth in three days to show Rousseff approaching Sunday's runoff vote with a slight edge over Neves, who had stirred investor enthusiasm by promising business-friendly policies to revive a sluggish economy. ...
Canadian retail sales unexpectedly drop 0.3 percent
By David Ljunggren OTTAWA (Reuters) - Canadian retail sales dropped unexpectedly in August as consumers pulled back for the second straight month, heightening uncertainty about broader economic growth and weighing on the Canadian dollar. Retail sales dropped 0.3 percent in August, pulled down by lower gasoline prices and weaker sales of new cars, food, and housing-related items, Statistics Canada said on Wednesday. Analysts forecast sales would be unchanged from July. ...
Iran's Khamenei says oil reliance putting country at mercy of big powers
DUBAI (Reuters) - Iran's dependence on oil revenue is putting the Islamic Republic's economy at the mercy of major powers, Supreme Leader Ayatollah Ali Khamenei said on Wednesday. With oil losing a quarter of its value since June, President Hassan Rouhani's administration has been scrambling for alternative sources of income. Iran's budget is based on oil priced at around $100 a barrel while Brent crude is currently below $87. Hitting prices is abundant supply as well as concern that slowing economic growth in Europe and China will soften demand. ...
South African govt boosts power utility Eskom with 20 bln rand cash
By Wendell Roelf CAPE TOWN (Reuters) - South Africa will inject 20 billion rand ($1.82 billion) cash into struggling power utility Eskom, and may also convert its existing 60 billion rand subordinated loan to equity, the National Treasury said on Wednesday. The moves highlight the gravity of the situation facing Eskom, which provides virtually all of the power to Africa's most advanced economy but has massive funding issues as its costs are running way ahead of its revenues. ...
South Africa sees slightly wider 2014/15 budget deficit of 4.1 pct of GDP
CAPE TOWN (Reuters) - South Africa expects a slightly wider budget deficit of 4.1 percent of GDP for 2014/15 from the 4 percent seen in February, but will rein in spending and raise taxes to get the gap down to 2.5 percent in three years, the Treasury said on Wednesday. In its medium term budget policy statement, which sets out spending plans and growth forecasts for the next three fiscal years, the Treasury said weak growth in Africa's most advanced economy had impacted tax revenue. "The budget deficit is high, debt levels have approached the limits of sustainability," it said. ...
South Africa cuts growth forecasts as strikes, power cuts weigh
CAPE TOWN (Reuters) - South Africa slashed its 2014 growth expectations for the second time this year on Wednesday, with the Treasury forecasting expansion of just 1.4 percent as strikes, an electricity crunch and weak private investment take their toll. Africa's most advanced economy, which was recently overtaken by Nigeria as the largest, has been battered by waves of labour unrest that has hobbled output in the platinum mining and manufacturing sectors. ...
Asia needs policy coordination amid slower growth
BEIJING (AP) ? Asia-Pacific economies need to recalibrate financial policies in the face of slowing global growth, U.S. Deputy Treasury Secretary Sarah Bloom Raskin said Wednesday, following a meeting of regional financial officials to prepare for next month's Asia-Pacific Economic Cooperation forum.
France does the splits on EU economic governance
By Paul Taylor PARIS (Reuters) - France has long called for a European economic government to harmonise the bloc's policies, but it is baulking now at that governance being applied to its own fiscal indiscipline. After defying European Union rules by putting forward a budget far short of the deficit cuts promised to its peers, Paris reacted angrily to the prospect of having it sent back for redrafting by the European Commission, which polices the rules. "It is we who decide on the budget," Prime Minister Manuel Valls declared. "Nothing today can lead to ... ...
Namibia central bank leaves lending rate unchanged at 6 pct
JOHANNESBURG (Reuters) - Namibia's central bank left its key lending rate unchanged at 6 percent, saying the decision was supportive of the economy and that it was monitoring the effects of recent policy decisions. "Domestic growth prospects continued to be encouraging during the first eight months of 2014, while inflation declined," the Bank of Namibia said in a statement on Wednesday. "Risks however remain, including strong growth in household credit, especially when used to finance unproductive imported luxury goods."