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Monday, February 7, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.80% at a 1-year high and March S&Ps up +4.10 points at a contract high. The dollar and most commodities are higher with copper posting another record high of $4.6350 a pound. Global stock markets received a boost on an easing of tensions in Egypt after Egyptian Vice President Suleiman promised, within a month; to draft a list of constitutional changes needed for free elections. European stocks were also bolstered after the Feb Euro-Zone Sentix investor confidence climbed a more-than-expected +6.1 to a 3-1/4 year high of 16.7. The euro slipped to a 2-week low against the dollar after Dec German factory orders fell a more-than-expected -3.4% m/m. The euro had gained earlier against the dollar after hawkish comments from ECB Council member Gonzalez-Paramo who said that interest rates would have to rise if inflation doesn't start to decline by the end of the year.


•   The Asian stock markets today closed mostly higher with Japan up +0.46%, Hong Kong -1.49%, China and Taiwan closed for the Lunar Mew Year holiday, Australia +0.12%, Singapore -0.59%, South Korea +0.53%, India +0.16%. Japanese stocks gained as company earnings rose and the US unemployment rate unexpectedly declined, which boosts confidence in the global economy. A weaker yen lifted exporters and raw-material producers gained as copper climbed to a record, which helped push the Nikkei 225 Stock Index to a 9-month high. Australian retailers weakened after Myer Holdings Ltd., Australia's largest department store, plunged 11% when the company cut its profit forecast for 2011. Stocks in India advanced and the rupee strengthened after India's Central Statistical Organization said that India's GDP will rise +8.6% in the year ending March 31. That would be the strongest expansion in 3 years and stronger than the +8.0% expansion of the previous 12 months.

Tuesday, February 8, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index down -0.55% and March S&Ps up +0.20 of a point. The dollar is lower and commodities are mixed, with crude oil sliding to a 1-week low. Global stocks were undercut after China raised interest rates for the third time since mid-October. Adding pressure to European stock markets was the unexpected decline in Dec German industrial production, which fell -1.5% m/m, its second monthly drop and the biggest decline in 20 months. Limiting losses in European stocks was the rally in automakers with BMW up 3.4% and PSA Peugeot Citroen up 3.7% after Toyota Motor, the world's biggest automaker, raised its full-year profit forecast by 40% as sales in Asia and other emerging markets beat company estimates. Also lifting stock prices was the +3 point increase in the Jan Bank of France business sentiment to a 3-1/4 year high of 110.



•   The Asian stock markets today closed mostly lower with Japan up +0.41%, Hong Kong -0.29%, Taiwan -0.37%, Australia +0.45%, Singapore -0.21%, South Korea -0.63%, India -1.45%. China raised its key interest rates after the close of Asian markets today. The benchmark 1-year lending rate will increase by 25 bp to 6.06% from 5.81% and the deposit rate will climb to 3.00% from 2.75%, effective tomorrow. The PBOC lifted rates on the last day of the weeklong Lunar New Year holiday and before a report next week that may show consumer prices rose +5.3% y/y in Jan. Japan's Nikkei 225 Stock Index climbed to its best level in 9 months after the Dec Japan current account surplus widened +30.5% y/y as the global economy boosted demand for Japanese goods. Dec exports increased +14.0% y/y while imports advanced +12.8% y/y, and for all of 2010 Japan's current account surplus winded +28.5% to 17.1 trillion yen, the first increase in 3 years.

Wednesday, February 9, 2011...

Overnight Developments

•   Global stocks are trading lower with the European Euro Stoxx 50 index down -0.33% and March S&Ps down -4.20 points. The dollar and Treasuries are firmer and commodities are mixed ahead of Fed Chairman Bernanke's testimony before the House Budget Committee later this morning. Inflation fears are sending the market lower today after China's interest rate hike yesterday along with soaring food inflation in the UK. The British Retail Consortium reported that Jan UK food prices rose +4.6% y/y, their fastest pace in 19 months and up from a +4.0% y/y pace in Dec. Also undercutting European stocks was the smaller-than-expected increase in Dec German exports, which rose +0.5% m/m, weaker than expectations of a +1.0% m/m increase. Dec German imports were weak as well after they unexpectedly fell -2.3% m/m, weaker than expectations of a +0.8% m/m increase. The euro trimmed gains and the 10-year German bund yield advanced to an 11-month high after Reuters reported that well-known monetary policy hawk Axel Weber will drop out of the race to succeed Jean-Claude Trichet as head of the ECB.


•   The Asian stock markets today closed mostly lower with Japan down -0.17%, Hong Kong -1.36%, China -1.18%, Taiwan -1.15%, Australia +0.29%, Singapore -1.09%, South Korea -1.19%, India -1.03%. Asian stocks declined as the market reacted to China's action to hike interest rates yesterday after the Asian markets were closed. Chinese stocks closed lower as exchanges reopened following a weeklong holiday for the Lunar New Year. Chinese homebuilders, real-estate companies and commodity producers led the market lower on demand concerns following the Chinese rate hike. Limiting losses in Japanese stocks was strength in exporters after the yen slipped to a 1-1/2 week low against the dollar and after Toyota Motor surged 5.2% when it boosted its profit forecast.

Thursday, February 10, 2011...

Overnight Developments

•   Global stocks are trading lower with the European Euro Stoxx 50 index down -0.86% and March S&Ps down -7.70 points. As expected, the BOE held its benchmark interest rate at 0.50% and maintained its asset purchase plan at 200 billion pounds. The dollar rallied and most commodities fell on an increase in European sovereign debt concerns after the yields on Portuguese government bonds rose to records. The yield on the 10-year Portuguese bond climbed to 7.64%, the highest since the introduction of the euro in 1999, before the yield backed off to 7.36% when the ECB came in to purchase Portuguese debt. A nearly 8% plunge in Cisco Systems in after-hours trading is leading US stock futures lower after the company posted a gross margin that missed analysts' estimates. In Europe, Air France sank 6.8% after it reported an unexpected loss in Q3 of 46 million euros and cut its full-year forecast, while Credit Suisse fell 4.3% after saying that Q4 net income rose to 841 mi llion francs ($873.1 million), below analysts' estimates of 928 million francs. Limiting European stock declines was the 3.9% gain in Deutsche Boerse as the company's acquisition of NYSE Euronext would create the world's biggest exchange operator with a combined host of publicly traded companies worth about $15 trillion, or 28% of global stock market value, according to Bloomberg data.



•   The Asian stock markets today closed mostly lower with Japan down -0.11%, Hong Kong -1.97%, China +2.08%, Taiwan -1.89%, Australia +0.20%, Singapore -1.50%, South Korea -1.97%, India -0.74%. Comments yesterday from Fed Chairman Bernanke that US unemployment may remain high "for some time" is undercutting Asian stocks on concern that the US recovery may struggle and demand for Asian goods may wane. Dec Japan machine orders rose +1.7% m/m, their first increase in 4 months, but weaker than the +5.0% m/m expected. Losses in Japanese stocks were limited as the yen fell to a 1-1/2 week low against the dollar and lifted exporters. China's Shanghai Stock Index closed higher as investors snapped up bargains in banks and property shares that tumbled following the recent sell off sparked by China's interest rate hike.

Friday, February 11, 2011...

Overnight Developments

•   Global stocks are trading mostly lower with the European Euro Stoxx 50 index down -0.58 % and March S&Ps down -5.80 points. The dollar and Treasuries are higher on a flight-to-safety after Egyptian President Mubarak refused to resign and vowed to stay on until elections in Sep. Mubarak handed day-to-day powers to Vice President Suleiman and the Egyptian army's supreme military council said it will guarantee Mubarak's plans for a peaceful transition to free and fair elections within the set timetable, much to the disappointment of investors who had hoped for a quick resolution to the Egyptian crisis. Oil prices also advanced as Mubarak's refusal to resign stoked concern that renewed turmoil may disrupt oil supplies through the Suez Canal. Stocks prices were also pressured by a 9.9% drop in Nokia Oyj after the world's biggest maker of mobile phones said it's forming a software partnership with Microsoft, a sign that its own platform strategy has faltered in its challenge to take on Apple's iOS and Google's Android platforms. L'Oreal SA tumbled 5.2% after the world's largest cosmetics maker reported 2010 net income of 2.24 billion euros, below analysts' estimates of 2.27 billion euros.


•   The Asian stock markets today closed mixed with Japan closed for holiday, Hong Kong +0.53%, China +0.54%, Taiwan -2.57%, Australia -0.68%, Singapore -0.84%, South Korea -1.58%, India +1.52%. Dec India industrial production rose +1.6% y/y, smaller than expectations of +2.0% y/y and the weakest pace in 20 months, which adds to concern the Indian economy may slow after the RBI raised interest rates to a 2-year high last month. In South Korea, the BOK unexpectedly left interest rates unchanged, although BOK Governor Soo said the pause may only be temporary, saying the central bank will move at its own pace in "normalizing" rates. The market had been expecting a 25 bp rate increase in the 2.75% 7-day repurchase rate after Jan South Korean consumer prices rose 4.1% y/y, breaching the central bank's 4.0% ceiling.

Monday, February 14, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.20% and March S&Ps down -1.40 points. The dollar index rose to a 3-week high and copper surged after China's Jan exports increased more than expected. The euro slipped to a 3-week low against the dollar ahead of a meeting of Euro-Zone finance ministers in Brussels later today. Global stocks received a boost after Egypt's ruling army council said it aims to transfer power within 6 months to a democratically elected government. Gains in European stocks were limited after Dec Euro-Zone industrial production unexpectedly declined -0.1% m/m along with a Reuters report that a rescue plan for WestLB AG, the German state-owned bank bailed out during the financial crisis, may founder. US stock prices were undercut in European trading after Wal-Mart slid 1.4% when JPMorgan Chase cut its recommendation on the stock to "neutral" from "overweight."



•   The Asian stock markets today closed higher with Japan up +1.13%, Hong Kong +1.28%, China +3.15%, Taiwan +0.88%, Australia +1.12%, Singapore +0.88%, South Korea +2.16%, India +2.67%. China's Shanghai Stock Index advanced to a 1-1/2 month high after its trade balance narrowed to +$6.5 billion, the smallest in 9 months. Jan China exports rose more than expected at +37.7% y/y and Jan imports surged +51.0% y/y, signaling strength in the Chinese economy that should benefit the global economy as well. Japan's Nikkei Stock Index soared to a 9-1/4 month high despite its economy contracting for the first time in 5 quarters. Q4 Japan GDP fell -0.3% q/q and -1.1% y/y, but the figures were stronger than the -0.5% m/m and-2.0% y/y expected as Japan's Cabinet Office said gross domestic product fell because of slowing exports and fading government stimulus programs. The Cabinet Office also said that China's $5.88 trillion GDP surpassed Japan's $5.47 trillion GDP in 2010, which pus hes China ahead of Japan as the world's second-largest economy.

Tuesday, February 15, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.36% and March S&Ps down -0.20 of a point. The dollar and Treasuries are weaker after German investor confidence advanced for a fourth month in Feb. The Feb German ZEW survey of economic sentiment rose +0.3 to a 7-month high of 15.7, although it was weaker than expectations of +4.6 to 20.0. The European economy expanded less-than-expected in Q4 as cold weather curbed output in France and Germany. The Q4 Euro-Zone GDP expanded +0.3% q/q and +2.0% annualized, slightly weaker than expectations of +0.4% q/q and +2.1% annualized. Jan UK consumer prices rose an as-expected +0.1% m/m and +4.0% y/y. The +4.0% y/y increase is a 2-year high and double the BOE's 2.0% target, although BOE Governor King said an acceleration in inflation is only temporary and raising interest rates "quickly" risks undermining the economic recovery.



•   The Asian stock markets today closed mixed with Japan up +0.20%, Hong Kong -0.96%, China -0.05%, Taiwan +0.42%, Australia -0.10%, Singapore -0.77%, South Korea -0.23%, India +0.39%. Japan's Nikkei 225 Stock Index climbed to a 9-1/4 month high after the BOJ raised its economic assessment for the first time in 9 months. Japan's central bank kept the benchmark interest rate between 0.00% and 0.10% and the size of its asset-purchase program at 5 trillion yen ($60 billion) following its policy meeting and said, "Japan's economy is gradually emerging from the current deceleration phase." Jan China consumer prices rose +4.9% y/y, weaker than expectations of +5.4% y/y, while Jan China new lending climbed +18.3% y/y to 1.04 trillion yuan ($157.7 billion), the third-highest Jan total, although slightly weaker than expectations for new loan growth of 1.2 trillion yuan. In a research report published in the China Securities Journal, China's State Information Center sai d the PBOC might raise interest rates again in Q1 because of pressure from rising prices.

European Stocks / The Asian Markets...

Banks push European shares to 29-mth closing high.
Tue Feb 15, 2011 12:58pm EST

* FTSEurofirst 300 closes 0.2 pct higher

* Barclays gains on forecast-beating results

* Danone rises as sales beat expectations

* Fall in copper price weighs on miners


LONDON, Feb 15 (Reuters) - European shares edged to a fresh 29-month closing high on Tuesday, as Barclays (BARC.L) led the banking sector up on the back of forecast-beating profits.

Gains for key indexes were limited as miners gave up some of their recent advances.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares rose 0.2 percent to 1,180.05 points, its highest close since early September 2008.

British bank Barclays gained 5.8 percent after it reported a 32 percent rise in annual earnings and detailed how it would boost returns.

Other banks to rise included Societe Generale (SOGN.PA), up 2.2 percent, ahead of its results on Wednesday. BNP Paribas (BNPP.PA), Deutsche Bank (DBKGn.DE), Intesa SanPaolo (ISP.MI) and UniCredit (CRDI.MI) rose between 2.2 and 3.3 percent.

"Barclays was reassuring in how they said they will achieve a 15 percent return on capital," said Colin McLean, managing director at SVM Asset Management in Edinburgh.

"But markets are more likely to have a setback before they go higher. A lot of cash has been committed to the market and that will be exhausted in the short term.

French food group Danone (DANO.PA) rose 3.3 percent after 2010 sales beat forecasts and it set higher 2011 sales goals than analysts expected.

Heavyweight miners were among the biggest losers. Copper fell from record highs on concerns further monetary tightening in China may affect base metals demand, and as worries about the political situation in the Middle East took the edge off risk appetite.

BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) fell between 2.2 and 2.8 percent. Anglo American (AAL.L) slid 3.8 percent after Citigroup downgraded it to "hold" from "buy".

COMFORT

Deutsche Boerse (DB1Gn.DE) fell 2.4 percent after providing further detail on its takeover of NYSE Euronext (NYX.N), down 2.8 percent, to create the world's largest exchange operator in a deal worth $10.2 billion.

On Wall Street, the S&P .SPX was down 0.3 percent around the time European bourses were closing. Sales at U.S. retailers increased less than expected in January amid weak receipts at building material and restaurant outlets, a government report showed.

The euro zone economy ended last year with stable growth, missing expectations as expansion rates in the region's three largest nations fell short of forecasts, while Greece and Portugal contracted.

Earlier, the market got some support after the German ZEW economic sentiment indicator rose in February, indicating confidence in the country's recovery.

"We had some reassurance from the ZEW figures, there had been comfort in the Chinese inflation figures and UK inflation data was as expected," Philip Isherwood, European equities strategist at Evolution Securities, said.

UK consumer price inflation was in line with economists' forecasts. Earlier, Asian markets had been steady after Chinese inflation came in lower than forecast in the year to January.

Across Europe, the FTSE 100 .FTSE index fell 0.4 percent, while Germany's DAX .GDAXI and France's CAC 40 .FCHI rose 0.1 and 0.3 percent respectively.

Wednesday, February 16, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.41% at a 2-1/3 year high and March S&Ps up +4.30 points at a new contract high. The dollar is lower while crude oil is higher as reports that civil unrest has spread to Libya, the holder of Africa's largest oil reserves. Increased M&A activity along with strong earnings results continue to propel stock prices higher. Sanofi-Aventis SA climbed 3.8% after France's biggest drug maker agreed to buy Genzyme for at least $20.1 billion, while Dell is up over 6% in European trading after the company reported profit, excluding some costs, of 53 cents a share in the quarter that ended Jan 28, well ahead of analysts' estimates of 37 cents. Bunds, Gilts and Treasuries rallied after BOE Governor King said risks to UK inflation are "equally balanced" and that inflation will fall back toward the central bank's 2.0% target by 2012 and below it within 2 years, along with saying he has no t laid the groundwork for an interest rate increase. Jan UK jobless claims unexpectedly increased by 2,400 while Jan UK nationwide consumer confidence fell a bigger-than-expected 7 points to 47 as rising taxes and inflation put pressure on household budgets.



•   The Asian stock markets today closed mixed with Japan up +0.57%, Hong Kong +1.12%, China +0.96%, Taiwan -0.10%, Australia -0.02%, Singapore +0.46%, South Korea -1.07%, India +0.15%. Japan's Nikkei 225 Stock Index soared to a 9-1/4 month high after Nomura Research Institute predicted that Japan will "break out of its current lull" in the first half of 2011, instead of its earlier prediction of the second half. Asian technology stocks closed led by a 3.6% gain in Elpida Memory, Japan's number one maker of computer memory chips, after Dell reported stellar earnings. Australian stocks finished lower after Moody's Investors Service warned that Australia's four biggest banks and their New Zealand unit may have their ratings cut on concern that access to overseas markets for funding will be "significantly restrained." Moody's said that funds from capital markets account on average for 43% of the lenders' liabilities, making them vulnerable to shifts in i nvestor confidence.

Thursday, February 17, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.20% and March S&Ps down -1.50 points. European and US stocks are fluctuating on either side of unchanged ahead of reports on US consumer prices and jobless claims later this morning. The dollar is little changed and commodities are mixed with cotton continuing its parabolic rise to over $2.00 a pound, while copper slumped to a 2-week low after LME copper inventories surged to a 6-month high. Strong earnings results continue to boost the stock market with 72% of the 378 companies in the S&P 500 that have reported earnings since Jan 10 have beaten estimates, while in Europe 57% have beaten forecasts. The yield on Spanish bonds rose and the gap between Spanish and German 10-year borrowing costs widened after Spain sold 3.5 billion euros of bonds, less than the 4 billion targeted by Spain's debt office. Demand for the 10-year debt fell to 1.54 from a bid-to-cover ratio of 1.67 at a p revious auction in Dec.



•   The Asian stock markets today closed mixed with Japan up +0.26%, Hong Kong +0.63%, China -0.08%, Taiwan -0.33%, Australia +0.17%, Singapore -0.38%, South Korea -0.51%, India +1.13%. Japan's Nikkei 225 Stock Index advanced to a 9-1/4 month high and China's Shanghai Stock Index climbed to a 3-month high after the Jan 25-26 FOMC minutes showed policy makers raised their projections for US economic growth this year, which should translate into strong demand for Asian goods. Foreign direct investment in China surged +23.4% y/y in Jan, stronger than expectations of +17.2% y/y, which adds to record inflows last year that are complicating Chinese government efforts to reduce excess liquidity and reign in inflation.

Friday, February 18, 2011...

Overnight Developments

•   Global stocks are trading mostly lower with the European Euro Stoxx 50 index down -0.10% and March S&Ps down -0.70 of a point. Global stock markets and commodity prices were undercut after China raised banks' reserve requirements for the second time this year and just 10 days after it raised interest rates in an attempt to cool inflation and curb property-price gains. Inflation concerns were heightened after Jan German producer prices rose a more-than-expected +1.2% m/m and +5.7% y/y, the fastest pace of increase in 2-1/4 years. The euro weakened after Feb France business confidence unexpectedly declined -2 to 106, while the British pound climbed to a 2-week high against the dollar after Jan UK retail sales rose by almost four times expectations. Jan UK retail sales with auto fuel jumped +1.9% m/m and +5.3% y/y as consumer spending rebounded after the coldest UK December in a century. The markets will be awaiting any comments to come from the Group of 20 pol icy makers that begin their 2-day meeting today in Paris to discuss imbalances that pose a risk to the global economy.



•   The Asian stock markets today closed mixed with Japan up +0.06%, Hong Kong +1.26%, China -1.05%, Taiwan +1.84%, Australia -0.03%, Singapore +0.13%, South Korea +1.75%, India -1.60%. In an attempt to tackle accelerating inflation and rising property bubbles, the PBOC raised banks' reserve ratios by 50 bp for the second time this year. Reserve ratios will now be 19.5% for China's biggest banks starting Feb 24. PBOC Governor Xiaochuan said in Paris after the reserve-ratio announcement that policy makers may also use means "including rates and currency" to tackle inflation. The renminbi rallied to a 17-year high ahead of the G-20 summit in Paris as China allows the yuan to move higher to placate critics of its foreign exchange policy. The yuan reached 6.5721 per dollar, the strongest level since China unified official and market exchange rates at the end of 1993. Asian stock markets received a boost after Q4 Taiwan GDP was revised higher to 6.92% y/y from a p reliminary estimate of 6.48% last month.

Tuesday, February 22, 2011...

Overnight Developments

•   Global stocks are trading sharply lower with the European Euro Stoxx 50 index down -1.03% and March S&Ps down -17.40 points. Increased safe-haven demand has pushed the dollar and Treasuries higher, with the 10-year T-note yield falling to a 2-1/2 week low, while crude oil and precious metals surged, with crude at a 28-month high, as violence escalated in Libya, holder of the biggest oil reserves in Africa. Al-Jazeera reported that at least 250 people died overnight in Libya as civil unrest continues throughout North Africa and the Middle East. The Italian Stock Exchange failed to open today because of "technical issues" after Italy's benchmark FTSE MIB Index declined Monday amid concern Libya's unrest will affect Italian companies. Airline stocks tumbled amid speculation higher oil prices will boost fuel costs and the euro recovered from losses after ECB Council member Mersch said ECB officials may toughen their language on inflation next week, indi cating a readiness to raise interest rates in coming months.


•   The Asian stock markets today closed lower with Japan down -1.78%, Hong Kong -2.11%, China -2.90%, Taiwan -1.87%, Australia -0.88%, Singapore --1/68%, South Korea -1.67%, India -0.77%. Japan's Nikkei 225 Stock Index tumbled after Moody's Investors Service lowered Japan's Aa2 debt rating to negative from stable saying economic and fiscal policies "may not prove strong enough to achieve the government's deficit reduction target and contain the inexorable rise in debt." Moody's also lowered the credit-rating outlook for Japan's three largest banks to negative from stable, saying "the government debt rating is a key input into the supported senior unsecured ratings for the Japanese banks." According to people with knowledge of the matter, China told its banks, which have lent at least $1.2 trillion to local governments, to recalculate capital levels by March 31 to account for higher risk ratings on such loans. The move may increase pressure on banks t hat fall below required capital ratios to raise money or reduce lending.

Wednesday, February 23, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.01% and March S&Ps up +5.10 points. The dollar and Treasuries are weaker as stocks attempt a rebound from yesterday's drubbing. Civil unrest continues in Libya, which has boosted crude prices, as Libyan leader Qaddafi vowed to keep fighting the rebellion in which over 300 people have been killed. Helping to lift European stock prices was the weaker-than-expected Jan French CPI, which fell -0.3% m/m and rose just +1.9% y/y. Also helping equity prices gain was the unexpected increase in Dec Euro-Zone industrial new orders which rose +2.1% m/m, stronger than expectations for a -1.0% m/m decline. Limiting a rally in stocks is weakness in airlines, which fell for a third day as higher crude prices threatens to cut into company profits. The euro rose to a 2-week high against the dollar on speculation rising energy costs will out further pressure on ECB policy makers to raise interest rate s. The British pound rose to a 2-1/2 week high against the dollar after the release of the minutes of the Feb 10 BOE policy meeting showed BOE policy maker Dale joined fellow policy members Sentance and Weale in voting for an interest rate increase.



•   The Asian stock markets today closed mostly lower with Japan down -0.80%, Hong Kong -0.36%, China +0.35%, Taiwan -1.67%, Australia -0.22%, Singapore -0.57%, South Korea -0.35%, India -0.64%. Q4 Chinese consumer confidence fell to 100 from 104 in Q3, its lowest level in nearly 2 years, as rising inflation threatens to restrain consumer spending. Nielson Co. and the Chinese statistics bureau's Economic Monitoring and Analysis Center, which prepared the confidence data, said that consumers' willingness to spend dropped "notably" as inflation expectations grew and food prices jumped. 83% of Chinese consumers expected prices to rise further in the next 12 months, 6 percentage points higher than in the previous quarter. The Jan Japan trade balance showed a trade deficit of 471.4 billion yen ($5.7 billion), Japan's first trade deficit in 22 months, as exports to Asia slowed and a surge in commodity prices pushed up import costs. The shortfall is unlikely to signal a weakening in Japan's economy as total exports rose 1% in Jan from a month earlier, their fifth consecutive monthly advance.

A look at economic developments around the globe...

By The Associated Press The Associated Press – Thu Feb 24, 1:16 pm ET
A look at economic developments and activity in major stock markets around the world Thursday:

___

LONDON — The violence in Libya dominated markets, sending stocks lower and oil prices higher.

Libya produces about 1.6 million barrels of crude per day and has the biggest oil reserves in Africa.

But the biggest worry in the markets is not necessarily Libya but whether the crisis spreads through the Persian Gulf.

In Europe, the FTSE 100 index of leading British shares closed down 0.1 percent, Germany's DAX fell 0.9 percent and the CAC-40 in Paris ended 0.1 percent lower.

Oil prices in New York hovered around $100 a barrel — up about 20 percent in the past week — while Brent crude in London rose nearly $3 to above $114.

___

TOKYO — Earlier in Asia, Japan's Nikkei 225 dropped 1.2 percent as the yen jumped on a safe-haven bid. A stronger yen hurts Japan's exports.

Hong Kong's Hang Seng index closed down 1.3 percent, Australia's S&P/ASX 200 shed 0.8 percent, South Korea's Kospi fell 0.6 percent and benchmarks in Singapore, New Zealand and India also declined.

China's main benchmark rose 0.6 percent.

___

ROME — Libya's violent upheaval has taken 1.2 million barrels of oil off the global market as energy plants and ports are shut down, according to Italy's Eni, the largest producer in Libya.

The figure represents most of Libya's total daily production, which before the crisis was about 1.6 million barrels of crude. The country sits on the biggest proven oil reserves in Africa.

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LONDON — When Moammar Gadhafi told the world he was a changed man, some leaders were skeptical. Others, like Britain's Tony Blair, were quicker to see the benefits of rapprochement with the oil-rich nation.

Now, as Gadhafi's regime crumbles, questions are being raised about whether Britain, the United States, and others were too quick to embrace a volatile despot linked to terrorism and oppression as they sought lucrative business deals.

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BRUSSELS — Russia's premier and the president of the EU's executive Commission clashed over EU plans to stop suppliers of oil or gas from also directly managing pipelines — a move that threatens to hit Russian gas monopoly OAO Gazprom.

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BERLIN — German government lawmakers are demanding that the eurozone's future bailout fund not be allowed to buy the bonds of troubled governments — a veiled threat they might also block long-awaited changes to the current fund.

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CAIRO — Egypt's stock exchange says an announcement about its reopening, already repeatedly delayed, will come next week. The Egyptian Exchange has been closed for nearly a month amid unrest surrounding Hosni Mubarak's ouster.

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BERLIN — Germany's budget deficit was 3.3 percent of gross domestic product in 2010, lower than previously estimated and only just above the limit set by European Union rules.

An initial estimate in January was 3.5 percent. Germany last year exceeded the 3 percent limit set for members of the 17-nation eurozone for the first time in five years.

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LONDON — Confidence over Europe's economic recovery improved further in February, another sign that the impact from the government debt crisis has for now abated.

The EU's executive branch said its economic sentiment indicator spiked by a point in the eurozone to 107.8, its highest level for nearly three and a half years.

Much of the survey was taken before this week's sharp rise in oil prices.

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LONDON — The Royal Bank of Scotland, Britain's largest government-owned bank, reported a smaller net loss for 2010 after returning to profit in the final quarter of the year. RBS said its recovery from the crisis was ahead of schedule.

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JOHANNESBURG — The launch of a state-owned mining company is renewing questions about whether South Africa has long-term plans to nationalize the lucrative industry.

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LONDON — Moody's rating agency cut Cyprus' credit grade by two notches, citing worries about its banks' exposure to crisis-hit Greece, rising debt and a lack of economic competitiveness.

Moody's lowered its rating on Cypriot government bonds to A2 from Aa3 with a stable outlook, meaning no further downgrades are being considered.

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CAIRO — Leading international ratings agency Standard & Poor's placed two Bahrain-based insurers on "CreditWatch Negative," citing the mass unrest that prompted the earlier downgrade of the Gulf nation's sovereign rating.

Thursday, February 24, 2011...

Overnight Developments

•   Global stocks are trading mostly lower with the European Euro Stoxx 50 index down -0.73% and March S&Ps down -7.50 points, both at 3-week lows. The major bearish factor today is the continued surge in crude oil, which rallied to over $103 a barrel in overnight trade as the violent uprising in Libya intensifies. Barclays Capital estimates that about 1 million barrels of daily crude production may have been shut due to the unrest in Libya, while Societe Generale estimates that a $20 a barrel increase in oil prices may cut global GDP by 1%. An increase in safe-haven demand has pushed the yield on Treasuries and the 10-year bund down to 3-week lows, while safe-haven demand has propelled gold to a 1-1/2 month high. The euro climbed to a 3-week high against the dollar after Feb Euro-Zone economic confidence rose a larger-than-expected +1.0 to 107.8, its highest level in 3-1/2 years.



•   The Asian stock markets today closed mostly lower with Japan down -1.19%, Hong Kong -1.34%, China +0.51%, Taiwan +0.15%, Australia -0.76%, Singapore -0.96%, Soth Korea -0.59%, India -3.00%. The surge in crude oil to a 2-1/3 year high amid Middle East unrest is dragging Asia-Pacific stock markets lower as well, with automakers leading declines. Mining companies also closed lower as copper slumped to a 4-week low on concern the surge in fuel prices will derail the global economic recovery and crimp copper demand. Japanese exporters retreated as the yen strengthened to a 2-1/2 week high against the dollar on increased safe-haven demand for the yen as the Middle East crisis intensifies.