India's Central Bank Unexpectedly Raises Reserve Limit to Curb Inflation

(Bloomberg) -- India's central bank unexpectedly
ordered lenders to set aside larger reserves for the third time
in a year to remove excess money that may stoke inflation.

Reserve Bank of India Governor Yaga Venugopal Reddy will
lift the cash reserve ratio, or the proportion of cash
commercial banks must put aside against deposits, to 7 percent
from 6.5 percent. The Mumbai-based central bank today also held
its benchmark interest rate at a five-year high of 7.75 percent.


Read more at Bloomberg Emerging Markets News

Taiwan Government Bonds Fall as Interest Rate May Rise; Currency Unchanged

(Bloomberg) -- Taiwan's bonds fell for a second day
on concern rising consumer prices will prompt the central bank
to increase interest rates to stem inflation.

Crown Plastic Enterprise Co. and Tah Hsin Industrial Co.,
makers of waterproof garments and shoes, will raise prices to
reflect higher commodities costs, the Commercial Times reported
today, without citing sources. Central bank policy makers raised
the benchmark rate by a quarter-percentage point to 3.125
percent in June, the 12th consecutive increase.


Read more at Bloomberg Bonds News

Gold, Silver Little Changed After Drop on Concern Global Growth May Slow

(Bloomberg) -- Gold was little changed in Asia after
the biggest weekly decline in almost two months on concern that
global economic growth may slow, reducing the metal's appeal as a
hedge against inflation. Silver was also little changed.

Gold fell 3.3 percent last week amid a $2.1 trillion world
stock market rout and concern that U.S. subprime mortgage losses
may slow economic growth, reducing inflation. Investors usually
buy gold at time of rising raw material prices to preserve wealth.


Read more at Bloomberg Commodities News

Taiwan's Bonds Fall on Speculation Inflation May Quicken; Currency Falls

(Bloomberg) -- Taiwan's bonds fell, sending the
benchmark 10-year yield to the highest since November 2004,
after a local newspaper reported the central bank predicts
inflation to accelerate. The currency weakened.

The monetary authority forecasts inflation may quicken to
more than 2 percent in the second half of the year, compared
with 0.61 percent in the first six months, the Taipei-based
Commercial Times said today. The increase will be due to rising
commodity prices, the newspaper said, citing Crystal Shih, chief
economist at the Central Bank of the Republic of China (Taiwan)
in Taipei.


Read more at Bloomberg Bonds News

South African Rand Rises to 11-Month High Versus Dollar on Interest Rates

(Bloomberg) -- South Africa's rand strengthened to
its highest against the dollar in more than 11 months on
speculation the interest rate gap with the U.S. will widen.

The currency of Africa's biggest economy has advanced 3
percent in the past year as the Reserve Bank has raised rates
five times to 9.5 percent, compared with a key rate of 5.25
percent in the U.S. Economists expect a government report this
week will show inflation exceeded the central bank's target range
for a third month in June.


Read more at Bloomberg Currencies News

China's CSI 300 Index Posts Biggest Two-Day Gain Since Launch; Banks Rise

(Bloomberg) -- China's stocks rose, completing the
CSI 300 Index's biggest two-day gain, on speculation government
curbs on lending and investment will prevent production gluts
from driving down earnings. Shenzhen Development Bank climbed.

China's central bank raised interest rates on July 20 for
the third time since March to cool the fastest pace of economic
growth in 12 years and restrain inflation.


Read more at Bloomberg Stocks News

Dollar pauses, stays near record low vs. euro

(Reuters) - Bernanke's testimony to the U.S. Senate Banking Committee supported the market's view that the Fed is unlikely to lower interest rates from 5.25 percent this year.




Minutes from the central bank's June policy meeting were largely in line with market expectations, showing that officials see the housing sector as the biggest risk to growth and that core inflation is "relatively subdued".


Read more at Reuters.com Hot Stocks News

Brazil fixed-rate bond yields rise after bank move

(Reuters) - Brazil sold 548.84 million reais of the same bonds, known
as LTNs, due in October 2008 to yield 10.76 percent compared
with 10.84 percent when the 2008 bond was last sold on June 5.




The central bank's monetary policy committee voted 4-3 to
cut the benchmark Selic lending rate to a record low of 11.5
percent from 12 percent on Wednesday. Analysts said the close
vote may signal policy-makers will probably trim the size of
rate cuts to 25 basis points going forward as they balance the
risk that faster economic growth will stoke inflation.


Read more at Reuters.com Bonds News

Switzerland's June Trade Surplus Widens as Decline in Franc Fuels Exports

(Bloomberg) -- Switzerland's trade surplus widened
in June as a decline in the Swiss franc fueled exports of
machines, watches and metals.

The surplus was 1.72 billion Swiss francs ($1.43 billion),
up from 1.04 billion francs in May, the Federal Customs Office in
Bern said today. Economists expected a surplus of 1.15 billion
francs, according to the median of five forecasts in a Bloomberg
survey. Exports rose 1.5 percent from May when adjusted for
inflation and seasonal swings, and imports fell 5.3 percent.


Read more at Bloomberg Currencies News

India Bonds End Three-Day Gain; Chidambaram Calls for `Tight' Money Policy

(Bloomberg) -- India's 10-year bonds fell, ending
three days of gains, after Finance Minister Palaniappan
Chidambaram said the nation will keep a ``fairly tight''
monetary policy to curb inflation.

Yields rose from the lowest in five months on speculation
the central bank will raise interest rates or drain spare cash
from the banking system to slow price gains. Bonds also dropped
on concern a rally in crude oil prices will stoke inflation in
India, which imports three-fourths of its energy requirements.


Read more at Bloomberg Bonds News

China Second-Quarter Economy Expands at 11.9 Percent, Fastest in 12 Years

(Bloomberg) -- China's economy grew at the fastest
pace in 12 years in the second quarter and inflation accelerated
the most in nearly three, adding pressure on the government to
raise interest rates and cool investment.

Gross domestic product expanded 11.9 percent from a year
earlier, the statistics bureau said in Beijing today, up from
11.1 percent in the first quarter. Inflation climbed to 4.4
percent in June, breaching the central bank's annual 3 percent
target for a fourth month.


Read more at Bloomberg Emerging Markets News

FED FOCUS-Forecasts signal inflation vigilance

(Reuters) - In its semi-annual report to Congress on Wednesday, the Fed
left its forecasts for core inflation for this year and next
unchanged, while slightly lowering its growth forecasts.




Since recent data has shown an easing in core, or nonfood,
non-energy inflation, economists were surprised the Fed did not
lower its core inflation forecasts from projections released
six months ago.


Read more at Reuters.com Bonds News

Consumer prices edge up on food costs

(Reuters) - Last month's gain in the Consumer Price Index was slightly larger than the 0.1 percent advance Wall Street economists were expecting to see after a fall-off in energy prices. But the increase in the more closely watched core prices index was directly in line with expectations.




"On balance the numbers show inflation is relatively contained," said Omer Esiner, foreign exchange market analyst with Ruesch International in Washington.


Read more at Reuters.com Business News

Treasuries Are Little Changed After Bear Stearns Tells of Subprime Losses

(Bloomberg) -- Treasuries were little changed
after Bear Stearns Cos. told investors in two funds they will
get little if any money back because of losses on securities
used to bet on subprime mortgages.

U.S. government debt pared gains before Federal Reserve
Chairman Ben S. Bernanke testifies before Congress today on the
state of the economy and interest-rate policy and the Labor
Department delivers its report on consumer inflation.


Read more at Bloomberg Bonds News

RPT-TREASURIES-Bonds sag on Dow over 14,000 and inflation fears

(Reuters) - NEW YORK, July 17 - U.S. Treasury debt prices
fell on Tuesday after strong company earnings prompted
investors to favor stocks over bonds and lifted the Dow Jones
industrial average above the 14,000 milestone for the first
time.




Investors also sold bonds as inflation worries were
stirred by an unexpectedly large rise in the core U.S.
Producer Price Index for June. Inflation erodes the value of
bonds.


Read more at Reuters.com Bonds News

Rand Trades Near Two-Week High Versus Dollar on Concerns About U.S. Growth

(Bloomberg) -- South Africa's rand traded near a
two-week high against the dollar on speculation a slowdown in the
U.S. housing market will spill over to the rest of the economy.

The rand yesterday touched its highest since July 3,
supported by investors seeking out South Africa's 9.5 percent
interest rate in trades funded by borrowing Japanese yen or Swiss
francs more cheaply. The dollar traded near a record low against
the euro today before reports that are expected to show inflation
and home building slowed.


Read more at Bloomberg Currencies News

US STOCKS-Futures flat, Merrill rises after earnings

(Reuters) - NEW YORK, July 17 - U.S. stock index futures were
little changed on Tuesday before data on inflation and as
higher-than-expected earnings from Merrill Lynch & Co.
helped offset concern about the subprime mortgage market.




Stock futures trimmed earlier losses after Merrill Lynch,
the world's largest brokerage, reported earnings and revenue
that beat Wall Street estimates. For details, see
[ID:nN17259618]. Merrill's shares rose more than 2 percent
before the opening bell.


Read more at Reuters.com Bonds News

US futures hint at Wall St fall, inflation data due

(Reuters) - Earnings season is getting into full swing, with several
major blue chips due to report on Tuesday, including top
chipmaker Intel Corp , Merrill Lynch and Yahoo
Inc. .




Economic data include wholesale inflation for June, which
may give a taste of Wednesday's report on consumer inflation
that is usually more influential in reinforcing the market's
expectations on the course of U.S. monetary policy.


Read more at Reuters.com Bonds News

FTSE weighed by miners, worries over US economy

(Reuters) - Britain's top share index fell on Tuesday as miners suffered downgrades and investors braced for U.S. inflation data after fresh fears over the subprime mortgage market fuelled concerns about the state of the world's largest economy.

Investors were also unsettled by a UK inflation report that showed price pressures remained strong, stoking fears of higher interest rates.


Read more at Reuters Africa

US TREASURY OUTLOOK-Inflation, housing data may boost bonds

(Reuters) - Woes in the subprime mortgage market to borrowers with poor
credit are making investors wary of riskier assets and have
stoked demand for safe haven Treasuries. Treasury prices may
also gain from any hints the Fed could cut interest rates in
the face of a slipping housing market. Yet inflation pressures
are likely to deter the central bank from cutting interest
rates for many months, according to market participants.




The Producer Price Index is due on Tuesday at 8:30 a.m.
. The overall PPI rose 0.2 percent in June, after a
0.9 percent rise last month, according to economists' median
forecast. Core producer prices, which exclude food and energy,
are also forecast to rise 0.2 percent.


Read more at Reuters.com Bonds News