Iron
Ore’s Bear Market Deepens on Demand Concern in China - (www.bloomberg.com) Iron ore extended
its decline into a bear market on concern that demand in Chinamay slow as credit tightens in the largest
buyer, exacerbating the impact of rising global supplies that are seen spurring
a surplus. Ore with 62 percent content delivered to Tianjin fell 8.3 percent to
$104.70 a dry ton, the lowest since October 2012 and the biggest drop in more
than four years, according to data from The Steel Index Ltd. yesterday. The
benchmark price lost 27 percent since Aug. 14, when it reached a five-month
high of $142.80. The raw material dropped into a bear market on March 7. BHP Billiton Ltd. (BHP) and Rio Tinto Group predict lower prices this year
after producers spent billions of dollars to expand output. Banks from
Citigroup Inc. toStandard
Chartered Plc
predict a surplus, and Goldman Sachs Group Inc. listed iron ore among its
least-preferred commodities for 2014. Credit concerns in China may have helped
to amplify volatility in prices, according to Jimmy Wilson, BHP’s head of iron
ore.
Staples
to shut 225 stores in North America as sales fall - (www.reuters.com) Staples Inc.
said it would close up to 225 stores in the United States and Canada - 12
percent of its North America outlets - and forecast another quarter of sales
decline as it loses customers to mass market chains and e-retailers. Shares of
the largest U.S. office supplies retailer fell as much as 17 percent after the
company also reported weaker-than-expected fourth-quarter results and forecast
a profit for the current quarter that fell far below analysts' estimates. Staples has
1,846 stores in the United States and Canada. "Our customers are using
less office supplies, they're shopping less often in our stores and more
online, and their focus on value has made the marketplace even more
competitive," Chief Executive Ronald Sargent said on a post-earnings call.
Staples said it had initiated a multi-year cost reduction plan that was
expected to generate annualized pretax cost savings of about $500 million by
2015.
Copper
Prices Hit Four-Year Low on China Fears - (online.wsj.com) Copper
prices fell to their lowest level in nearly four years Tuesday, amid continued
worries that a slowdown in China—the world's biggest buyer—will damp demand for
the industrial metal. The most actively traded contract, copper for May
delivery, was recently as low as $2.9420 a pound on the Comex division of the
New York Mercantile Exchange, losing nearly 2.5% to hit its lowest level since
July 2010. Copper futures have been on shaky ground, as investors fear that
China's economy will cool off as the government shifts its focus to longer-term
growth. China accounts for 40% of the world's copper imports. "Investors
are beaten down and they don't know what China's plans are," said Ira
Epstein of the Linn Group. "The mentality is to watch and wait and see
what happens next." Losses in copper have ramped up in recent days, after
China's first corporate debt default intensified concerns about the country's
banking system.
Top
German body calls for QE blitz to avert deflation trap in Europe - (www.telegraph.co.uk) A
leading German institute has called for full-blown quantitative easing by the
European Central Bank (ECB) to head off a deflation spiral, marking a radical
shift in thinking among the German policy elites. Marcel Fratzscher, head of
the German Institute for Economic Research (DIW) in Berlin, demanded €60bn
(£50bn) of bond purchases each month to halt the contraction of credit and
avert a Japanese-style trap. "It is high time for the ECB to act.
Otherwise Europe risks falling into a dangerous downward spiral of sliding
prices and declining demand", he wrote in Die Welt. "The ECB must
counter the deflation threat quickly and decisively, and launch a broad-based
programme of bond purchase along the lines of the Federal Reserve," he
said. The scale should be 0.7pc of eurozone state debt each month, comparable
to 'QE3' in the US.
Fed’s Aid in 2008 Crisis Stretched Worldwide - (www.nytimes.com) Tuesday
morning, Sept. 16, 2008, was perhaps the darkest time for the United States
economy in modern memory — even if nobody knew it quite yet. It was barely 24
hours removed from the bankruptcy of Lehman Brothers, and a few hours before
the government would rescue the insurer American International Group. Events had been set in motion that would
drive the unemployment rate to double digits and cause half a decade of
economic misery. But before they would confront any of that, the men and women
of the Federal
Reserve received
an urgent briefing on Norway. A few minutes into the meeting of the Fed’s policy
committee,
according to newly released transcripts, William C. Dudley, then the head of
the markets desk at the New York Fed, brought dangerous tidings from across the
Atlantic. “I have just sketchy details based on a phone call,” Mr. Dudley said.
“But my understanding is that this morning Norway put in place a facility by
which they are going to offer their banks dollars, up to $5 billion,” adding
that “the fact that Norway is doing this suggests that the situation has
broadened quite a bit further.”
BOJ
keeps stimulus in place, cuts view on exports in warning sign - (www.reuters.com)
Yen-Pinching Undercuts Japan’s Push Against Years of Deflation - (www.nytimes.com)
Yen-Pinching Undercuts Japan’s Push Against Years of Deflation - (www.nytimes.com)
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