FOREX-Yen rallies after BOJ, Italy debt sale lift euro

 Yen hits one-week high vs dollar, two-week high vs euro
    * BOJ eases policy, but some had expected more
    * Euro up versus dollar as Spain Q3 GDP less bad than feared
    * Italy debt auctions also help euro
    * Volumes thin as giant storm closes U.S. market

    By Nia Williams and Anooja Debnath
    LONDON, Oct 30 (Reuters) - The yen rose broadly on Tuesday
after monetary easing steps from the Bank of Japan disappointed
some market players who had positioned for a more aggressive
increase in asset purchases.
    The euro also gained against the dollar after data showed
the Spanish economy contracted slightly less than expected in
the third quarter and Italy's borrowing costs at a sale of five-
and ten-year debt.
    Volumes were thin with U.S. markets closed as one of the
biggest storms ever to hit the United States battered the
eastern seaboard. 
    The BOJ increased its monetary stimulus for a second month
runinng, this time by 11 trillion yen ($138.5
billion). The yen gained after this, with traders
saying there had been speculation of a bigger stimulus.
    "It was a very sceptical response to the BOJ policy meeting,
made worse by the fact they have revised lower the growth and
inflation outlook. That has seen the yen unwind a lot of the
softer tone we saw going into this meeting," said Jane Foley,
senior currency strategist at Rabobank.
    The dollar hit a one-week low of 79.28 yen on EBS
trading platform, breaking below important chart support at the
200-day moving average at 79.52. It was last down 0.4 percent on
the day at 79.43 yen.
    Friday's four-month peak of 80.38 was expected to act as
resistance for the dollar.
    The euro also fell to a two-week low of 102.175
yen before paring losses to last trade down 0.1 percent at
102.87 yen.
    
    SPAIN, ITALY NEWS LIFT EURO
    The euro climbed 0.4 percent against the dollar to
$1.2935 as data showed the Spanish economy contracted for a
fifth straight quarter in the three months to September at a
slightly slower rate than forecast. 
    It was also helped by improved demand at an Italian debt
auction. 
    "There's been a little bit of speculative buying of
euro/dollar because the Spanish GDP data was not so bad as
feared," said Paul Bednarczyk, head of research at 4CAST.    
    In Madrid, Cortal Consors economist said any suggestion that
the GDP number marked an upturn for Spain was "a mirage". 
    Market players cited bids at $1.2850-80 which should help
limit any losses, and expected buying ahead of the 200-day
moving average at $1.2834.
    "We are very much in a range trade at the moment of
$1.28-$1.32," Bednarczyk said.
    Gains for the euro looked likely to be capped by concerns
about whether Greece can agree a deal on more austerity, and
uncertainty over when Spain might request financial aid.
    Spanish Prime Minister Mariano Rajoy said on Monday he would
seek a credit line from the euro zone's rescue fund "when I
think it is in the interests of Spain". 
    Still, expectations the European Central Bank will start a
bond buying programme after Madrid asks for a bailout limited
speculative euro selling.
    Traders reported option expiries at $1.2900 and $1.2925,
which could keep the euro close to those levels.
    Strategists said it was too early to tell what impact the
destruction caused across the Atlantic by the giant storm Sandy
might have on currency markets.
    Demand for the dollar tends to rise in times of reduced
appetite to take on risk, but if widespread damage prompted
speculation the Fed might ease policy further to shore up the
economy, the dollar could fall.
    The U.S. dollar earlier hit a three-month high
against the Canadian dollar of C$1.0020 and broke back above
parity, seen as a key technical level.

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Chile's Collahuasi copper mine taps Codelco exec as new CEO.

Oct 30 (Reuters) - The world's No.3 copper mine, Chile's Collahuasi, said on Tuesday it has appointed as its new chief executive Codelco's vice president for central-south operations, Jorge Gomez Diaz, in a push to turn around the troubled operation.
Last year Collahuasi was dragged to its lowest copper output since 2007 and has been hit this year by a combination of work stoppages, heavy rains and fatal accidents, prompting Anglo , Xstrata and Japanese partner Mitsui to step in, appointing interim co-chief executives and a recovery plan.

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3 Undervalued Coal Stocks to Buy.

Arch Coal's (NYSE: ACI) HUGE Upside!
As risky as the coal market is right now, Arch is worth the bet. After taking over International Coal, the company became burdened with $4 billion in leverage at one of the worst times possible. As Morningstar has emphasized, natural gas prices hit a low as utility inventories rose to seeming endless peaks. This has resulted in a weak margin outlook that will be complemented by a leverage ratio of around 4x as debt maturities near. However, the worst looks like it is factored in.
In my DCF model on Arch, I make several assumptions: (1) double-digit growth ranging from 10% to 21% over the next 6 years and 2.5% into perpetuity, (2) consistent operating metrics, and a (3) 10% discount rate. Based on these inputs, I find that the fair value of the stock is $14.31, which implies significant double-digit upside should the company just close its value gap. Fortunately, it comes on top of strong momentum from the company adding in low cost operations that helped boost reserves by 1.3 billion tons.
Going forward, much of the company's upside will come from metallurgical coal. Morningstar points to several bullish talking points that I agree with: First, Asian demand will keep volumes elevated even if competition cuts into margins. Furthermore, the company's leading control of the Powder River Basin will help limit any margin erosion that comes from emerging entrants and peer growth. With the potential to increase met production in the years ahead, the pricing power is thus strong and will grant the company great leverage to takeover struggling producers.
Peabody (NYSE: BTU) and CONSOL Energy (NYSE: CNX) Also Undervalued
If you are looking for some safety, consider Peabody. At around 6x past earnings, the worst has been factored in. By contrast, growth has not been fully factored in, as evidenced by the PEG ratio of around 0.3x.
If the company meets expectations, it will be worth $51.72 at a 12x multiple by 2016. At a discount rate of 10%, the present value of the stock is $32.11, which is at a significant premium to yesterday's closing value. In terms of operations, fundamentals are trending surprisingly smooth. At around a price of $165 per ton, the company has 3.6 million tons of met coal that can be delivered to the market. Put differently, Peabody has an excellent ability to meet demand.
Although the company is reserved on the next quarter given Australian cost inflation, Europe appears to indicate a movement towards cheaper coal sources. As a takeover target, the company's operations could be catalyzed through greater scale that spreads out costs and reduces costs even more in a way that is attractive to beleaguered economies.
I am further optimistic on CONSOL, which is even safer than Peabody. At a PEG ratio of 0.5x but a high beta, it is positioned technically to gain from a price multiple expansion and a full recovery. Management has taken the right steps to prepare itself for the full recovery by cutting corporate sales and reducing unnecessary steps in the supply chain to pass savings onto customers for greater volumes.

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Yen rallies broadly as BOJ easing underwhelms

* Yen hits one-week high vs dollar, two-week high vs euro
* Euro climbs vs dollar, but outlook clouded
* U.S. markets stay closed as storm Sandy batters U.S.
By Nia Williams
LONDON, Oct 30 (Reuters) - The yen rose broadly on Tuesday after monetary easing steps from the Bank of Japan's disappointed some market players who had positioned for a more aggressive increase in asset purchases.
The BOJ increased its monetary stimulus for the second monthly in a row, this time by 11 trillion yen ($138.5 billion).
"It was a very sceptical response to the BOJ policy meeting, made worse by the fact they have revised lower the growth and inflation outlook. That has seen the yen unwind a lot of the softer tone we saw going into this meeting," said Jane Foley, senior currency strategist at Rabobank.
The dollar hit a one-week low of 79.25 yen, breaking below its 200-day moving average at 79.52, important chart support. It was last down 0.4 percent on the day at 79.45 yen.
Some strategists said Friday's four-month peak of 80.38 would act as resistance for the dollar, and further moves in the safe-haven yen would depend on how developments in the United States and the euro zone affected investor appetite to take on risk.
"The dollar has probably hit a near-term peak last week. After the BOJ's easing, the market's focus will probably move on to whether the Federal Reserve will take steps in December to deal with the fiscal cliff," said Ayako Sera, senior market economist at Sumitomo Trust Bank.
The dollar was likely to stay trapped in its well-worn trading range around 77.50-80 yen, she added.
The euro also slipped against the Japanese currency, to a two-week low of 102.175 yen, before paring losses to trade down 0.2 percent at 102.78 yen.
WAITING GAME
The single currency climbed 0.3 percent against the dollar to $1.2935, helped by lower Spanish and Italian bond yields. Market players cited bids at $1.2850-80, and said there was buying ahead of the 200-day moving average at $1.2834.
Traders reported option expiries at $1.2900 and $1.2925 and said volumes were likely to be thin. U.S. markets were closed as Sandy, one of the biggest storms ever to hit the United States, battered the eastern seaboard.
Gains for the euro looked likely to be capped by concerns about whether Greece can agree a deal on more austerity, and uncertainty over when Spain might request financial aid.
Spanish Prime Minister Mariano Rajoy said on Monday he would seek a credit line from the euro zone's rescue fund "when I think it is in the interests of Spain".
Data on Tuesday showed Spain's recession extended to a third quarter, while inflation stayed high.
"Spain's economy is suffering terribly, which will continue to hit government revenues, and a modest decline in bond yields will not solve the problem," said Kit Juckes, strategist at Societe Generale.
Despite that, expectations the European Central Bank will start a bond buying programme after Madrid asks for a bailout limited speculative euro selling, and kept the currency within the $1.28 to $1.3170 range it has been in since mid-September.
The U.S. dollar was steady against the Canadian currency at C$1.0001. It earlier hitting a three-month high of C$1.0020 and broke above parity, seen as a key technical level.
Strategists said it was too early to tell what impact the destruction caused by Sandy might have on currency markets.
Demand for the dollar tends to rise in times of reduced appetite to take on risk, but if widespread damage prompts speculation the Fed may ease policy further to shore up the economy, the dollar could fall.

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WATCH NOW

Live TV Coverage of Hurricane Sandy Aftermath

Yen Strengthens Against Dollar After BOJ Adds to Monetary Easing

By Masaki Kondo and Lucy Meakin - Oct 30, 2012 4:43 PM GMT+0530

The yen gained versus the dollar, reaching the strongest level in more than a week, as the Bank of Japan (8301)’s second round of easing in two months disappointed some investors expecting more.
The BOJ expanded its asset-purchase program by 11 trillion yen ($138 billion) to 66 trillion yen, the central bank said after a policy meeting today. The range of forecasts in a Bloomberg survey was from 10 trillion yen to 20 trillion yen. Demand for the yen as a refuge asset increased as Sandy, the largest tropical storm system on record, reached the American Northeast coast. The pound rose against the dollar after a report showed U.K. retail sales rose in October.
“The 10 trillion-yen increase was seen as a minimum expansion, and the failure to reach 15 trillion yen is very disappointing for markets,” said Yunosuke Ikeda, head of Japan foreign-exchange research at Nomura Securities Co. in Tokyo. “The yen is being bought as risk sentiment is worsening in part because of Sandy.”
Japan’s currency rose 0.5 percent to 79.44 per dollar at 7:06 a.m. in New York after reaching 79.28, the strongest since Oct. 22. The yen appreciated 0.1 percent to 102.90 per euro. Europe’s common currency climbed 0.4 percent to $1.2954.
U.S. stock trading will be canceled for a second day after Sandy made landfall in New Jersey. The storm froze travel, spurred evacuations and may affect 60 million people.

Inflation Target

Fifteen analysts forecast the BOJ would add 10 trillion yen to its 55 trillion yen program that buys assets such as government bonds, real-estate investment trusts and stock funds, according to a Bloomberg News survey. Four economists predicted it increasing purchases by as much as 20 trillion yen.
“We’re in a ‘buy the rumor, sell the fact’ move for the yen at the moment,” said Greg Gibbs, a senior currency strategist at Royal Bank of Scotland Group Plc in Singapore.
Japan’s industrial production slid 4.1 percent in September from the previous month, the most since last year’s earthquake and tsunami in March, government data showed today. The drop exceeded the most pessimistic estimate of economists surveyed by Bloomberg News.
Nissan Motor Co. Chief Executive Officer Carlos Ghosn said his company may have to move away from Japan to survive as the strong yen diminishes the nation’s competitiveness.
“If the exchange rate is high, we move out,” Ghosn said in Tokyo today. The yen’s “neutral range” is 100 to the dollar, he said.

‘Aggressive’ Policy

“You really do need a much more aggressive monetary policy to try to get the yen weaker, to try to offer a bit of relief to the manufacturing sector,” Richard Jerram, chief economist at Bank of Singapore Ltd. said in an interview on Bloomberg Television. “The yen will be down at 88 in a year’s time against the dollar as a result of the more aggressive monetary policy coming out of the BOJ.”
Gains in the euro were tempered after a German report showed unemployment increased by twice as much in October as analysts forecast.
The number of people out of work rose a seasonally adjusted 20,000 from September to 2.94 million, the Federal Labor Agency in Nuremberg said. Economists forecast a gain of 10,000, the median of 31 estimates in a Bloomberg survey showed.
Spain’s economy shrank for a fifth quarter in the three months through September, the National Statistics Institute said in Madrid.
The pound advanced against the dollar as the Confederation of British Industry said a gauge of retail sales climbed to 30 in October from 6 a month earlier.
Sterling rose 0.2 percent to $1.6066 and was little changed at 80.62 pence per euro.

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U.S. Cuts Estimate of Sugar Intake

It was repeated so often it was accepted as true: the typical American consumed 95 to 100 pounds of sugar each year. Health experts said that consumption was surely contributing to a nationwide crisis ofobesity.

U.S.D.A. Tables on Sweetener Consumption (Excel)

• Refined Sugar
• Corn Syrup
• Other Sweeteners

Enlarge This Image

Tony Cenicola/The New York Times

Estimating sugar consumption is a tricky proposition, based loosely on an educated guess at how often sweet foods are actually eaten, versus thrown away.

But in a move that has largely gone unnoticed, the Agriculture Department, keeper of the statistics on America’s sweet tooth, has employed new methodology that overnight shaved 20 pounds off its estimate and brought the number down to a precise 76.7 pounds. The decision raises questions about the entire notion of per-capita consumption just as the battles over sugar and sweeteners reach a peak.

“There’s such an implication of precision and accuracy in that decimal point — boy, we’ve got this nailed now,” said Michael F. Jacobson, executive director of the Center for Science in the Public Interest. “But when you take a good look, it’s built on a foundation of sand.”

Jean C. Buzby, the agricultural economist who headed the department’s team responsible for the data that led to the revision in sugar consumption, agreed that it was far from perfect but said it was better than what was used in the past.

She pointed to the note on each page of the government’s data that labeled them “first estimates” that “are intended to serve as a starting point for additional research and discussion.”

Few people are aware of the change, which quietly occurred two months ago. Dr. Jacobson stumbled across it recently while working on a project on sugar consumption. He takes issue with the new methodology and contends it could be a setback in the push for healthy eating. Suggestions that sugar consumption is down, or dropping, could take some pressure off companies that make sugary foods, for example.

In e-mails the center obtained through a Freedom of Information request, officials at sugar industry trade groups discussed the benefits of the lower estimate and how they might persuade the U.S.D.A. to make a change that would reduce it even more.

“We perceive it to be in our interest to see as low a per-capita sweetener consumption estimate as possible,” Jack Roney, director of economics and policy analysis at the American Sugar Alliance, wrote in an e-mail on March 30, 2011.

Mr. Roney said in a telephone interview that he was pleased to have “more accurate” information about sugar consumption available. “The extent to which caloric sweeteners are in the public’s eye as a possible source or cause of increasing obesity in this country is huge,” he said. “If folks are assuming there is much greater consumption than there really is, then we are misleading the public unnecessarily.”

Estimating sugar consumption is a tricky proposition, fraught with potential for misjudgments. It is based loosely on an educated guess at how much of various sweetener-laden foods that consumers buy is actually eaten, versus how much is thrown away. “It is difficult to obtain nationally representative estimates of consumer-level food loss,” Dr. Buzby wrote in an e-mail.

There had long been a sense that the estimates the department was using failed to capture all of the loss that was occurring, Dr. Buzby said. Five years ago, just as debate over sugar use was heating up, the U.S.D.A. began an overhaul of what it called “consumer-level food-loss estimates.” It hired RTI International, a nonprofit consulting firm, to help it come up with new loss estimates more firmly anchored in data.

Mary K. Muth, director of food and nutrition policy research at RTI, said she had used data from the Nielsen Company’s Homescan surveys of consumer food purchases and interviews done for the Centers for Disease Control’s National Health and Nutrition Examination Survey to come up with the new loss estimates for sugar and sweeteners.

“It’s an improvement over how it was done before but an incremental one, and surely more work can be done,” Dr. Muth said.

In all, RTI’s revisions called for higher loss estimates for 84 foods and lower losses of 54, while leaving a handful unchanged.

In some cases, the change in loss estimates was drastic. RTI estimated, for example that 69 percent of fresh pumpkins are lost at the consumer level compared with the old estimate of 20 percent.

A report on the changes written by Dr. Muth, Dr. Buzby and others concluded more pumpkins were being used for decorations and subsequently discarded.

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Forex Trading Weekly Forecast - 10.29.2012.

Dollar Positioned for Rally Back to 1.2800 if Stimulus Held

- The pressure is building and the masses are starting to take fundamental shortfalls across the world more seriously, while hope for continuous external support (stimulus) fades. The scales will soon tip, but what will set an underlying shift in sentiment into motion?

British Pound Forecast Depends on US Nonfarm Payrolls

- While the Pound Sterling finally moved under its own forces this week, with an Olympic-powered GDP pushing it to retest recent highs, an important week of US event risk is likely to force sharp moves across key forex pairs in the days ahead, and we’ll keep an especially close eye on Friday’s US Nonfarm Payrolls report to gauge implications for the resurgent GBPUSD.

Euro Fundamentals Increasingly Negative but Hinges on Spain

- But with most of the major data passing this past week – including Euro-zone PMIs and the Spanish third quarter labor market reading – the focus will return to the sovereign debt crisis and what steps will be done to make the next steps forward. Given the uncertainty surrounding this week’s events, we are taking a very cautious stance, with significant risks to both the bullish and bearish outcomes.

Japanese Yen to Resume Down Trend on BOJ Stimulus, US Data

- US economic data has increasingly topped economists’ expectations over recent weeks, feeding hopes that firming growth in the world’s top economy will help offset a slowdown in Asia and a recession in Europe. Consensus forecasts call for broad-based improvement across most of the week’s headline data releases, suggesting the path of least resistance favors a pickup in risk appetite that amplifies existing domestically-derived Yen selling pressure.

Australian Dollar Outlook Bearish On RBA Policy - Top In Place

- As consumer prices expand at the fastest pace since the fourth-quarter of 2011, the larger-than-expected uptick in price growth may push the Reserve Bank of Australia to the sidelines, and the central bank may revert back a wait-and-see approach ahead of 2013 as the headline reading for inflation climbs back within the 2%-3% target range.

Gold Eyes Key Support Ahead of US NFPs- $1693 Remains Critical

- Gold prices continued to ease this week with the precious metal off by 0.60% to trade at $1711 at the close of trade in New York on Friday. The decline marks the third consecutive week of losses for bullion which encountered support at $1700 as positive US data continues to weigh on prospects for further Fed easing. Gold now looks poised for a test of critical support at $1693 with a break below this level risking substantial losses for the yellow metal.

Canadian Dollar to Face Further Losses As BoC Holds Hawkishness

- The Canadian dollar continued to weaken against its U.S. counterpart as the Bank of Canada softened its tone for a rate hike, but the loonie may regain its footing going into November as the economic docket is expected to instill an improved outlook for the world’s 10th largest economy.

RBNZ Offers Mixed Signals on Kiwi – Forecast “Partly Cloudy”

- The Reserve Bank of New Zealand kept its key interest rate on hold at 2.50%, bucking some dark horse expectations for a rate cut mainly due to regional weakness in Australia and China. Despite the Kiwi’s outperformance this week, we remain neutral, though weighted to the upside.

Over the past three weeks, the Dow Jones FXCM Dollar Index (ticker = USDollar) has made absolutely no progress. However, there is little consistency to this elevated complacency. Yet, the pressure is building and the masses are starting to take fundamental shortfalls more seriously, while hope for continuous external support (stimulus) fades. The scales will soon tip, but what will set an underlying shift in sentiment into motion?

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Yen Strengthens From Four-Month Low on Demand for Safety

The yen rose from a four-month low against the dollar as disappointing U.S. corporate results and record unemployment in Spain boosted the allure of the relative safety of Japan’s currency.

The Japanese currency still had a five-day loss versus the greenback amid bets the Bank of Japan (8301) will increase monetary stimulus next week. South Africa’s rand climbed. Europe’s shared currency dropped after Spanish unemployment data showed a record one in four residents was out of work last quarter.

Enlarge image

The yen traded at 80.21 per dollar at 9:03 a.m. in Tokyo after earlier touching 80.38, the weakest since June 25. It has lost 1.1 percent this week, poised for the biggest five-day slide since the period ended Aug. 17. Photographer: Kiyoshi Ota/Bloomberg

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“Given that Japan is a capital exporter, has a very large foreign asset position, if there are rising risks, even for domestic reasons, you tend to see money flowing back,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “The yen is the move that stands out today. The chances are still fairly high that the BOJ goes in for additional easing, so I would not be fully unwinding bets on that just yet.”

Japan’s currency gained 0.8 percent to 79.65 per dollar at 5 p.m. New York time after touching 80.38 earlier, the weakest since June 25. It lost 0.4 percent this week. The yen advanced 0.8 percent to 103.05 per euro and touched 102.69, the strongest since Oct. 16. It rose 0.2 percent on the week. The greenback was little changed at $1.2938 to the 17-nation currency after reaching $1.2883 earlier, the strongest level since Oct. 11. It gained 0.7 percent over the past five days.

Yield Spread

The yen was also supported against the dollar as U.S. Treasuries’ yield advantage over Japan’s government securities narrowed, making American debt less attractive to Asian investors. The yield spread between U.S. and Japanese 10-year bonds shrank to 99 basis points, or 0.99 percentage point, from 104 basis points yesterday.

The Japanese currency typically gains in times of political, financial and economic turmoil because the nation’s historical trade surplus means the nation doesn’t have to rely on overseas lenders.

The Bank of Japan will release a forecast for the nation’s consumer prices and growth on Oct. 30, when it holds its second policy meeting this month. The Nikkei newspaper reported yesterday the central bank may increase its asset-purchase target by 10 trillion yen ($125 billion) to 90 trillion yen.

“Recently the data has been somewhat more mixed, and the market has been concerned about corporate earnings,” said Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York. “The yen had been weakening because of the expectation of the expansion of the balance sheet by the BOJ relative to the Fed, which was also in line with rising expectations for the U.S. economy.”

Dollar Index

The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, was little changed at 79.997 after earlier rising above its 50-day moving average of 80.155. It touched 80.270, the highest level since Sept. 11.

The gauge may climb to a seven-week high between 80.65 and 80.70 after rising through resistance at 80.20, Niall O’Connor, a New York-based technical analyst at JPMorgan, wrote today in a note to clients. The 200-day moving average is 80.65. Resistance is an area on a chart where sell orders may be clustered.

South Africa’s rand climbed 1.2 percent to 8.6431 to the dollar after the U.S. economy grew more than forecast in the third quarter. America is the second-largest destination for the nation’s exports.

Kiwi Gains

New Zealand’s dollar, nicknamed the kiwi, gained 0.6 percent to 82.29 U.S. cents, approaching the three-week high of 82.43 cents that it reached yesterday.

U.S. gross domestic product expanded at a 2 percent annual pace after gaining 1.3 percent in the prior quarter, Commerce Department figures showed today in Washington. A Bloomberg survey had forecast a rise to 1.8 percent. The economy grew at a 4.1 percent pace from October through December 2011.

The euro has tumbled 2.1 percent this year against nine developed-nation currencies tracked by Bloomberg Correlation- Weighted Indexes. The yen lost the most, 5.6 percent, and the dollar fell 1.9 percent. New Zealand’s dollar was the biggest winner, rallying 4.5 percent.

Spain’s unemployment rate rose to 25.02 percent, from 24.6 percent in the previous quarter, the National Statistics Institute said in Madrid today. It was the highest level since at least 1976, the year after dictator Francisco Franco’s death led Spain to democracy.

“We’ve seen the euro a bit lower,” said Peter Frank, a foreign-exchange strategist at Banco Bilbao Vizcaya Argentaria SA (BBVA) in London. “What’s been a marginal underperformance in the growth outlook in the euro zone in the past few quarters is turning into quite a big gulf” as other major economies show signs of recovery, he said.

Crisis Outlook

Speculation increased that Europe’s three-year-old sovereign-debt crisis may worsen after German Finance Minister Wolfgang Schaeuble said there are doubts about whether Greece, where the turmoil began, has met its commitments for an international bailout.

“We do want Greece to be able to stay in the euro zone,” Schaeuble said in an e-mail release of an interview to be broadcast Oct. 30 on ZDF television. “But Greece has a lot to do. It’s not decided.”

The Canadian dollar weakened for a fourth day against the greenback, the longest losing streak since May, on concern demand for the nation’s natural resources will decline as investors question global-growth prospects. Futures on crude oil, Canada’s biggest export, touched $85 a barrel in New York, almost a three-month low.

The loonie, as the currency is nicknamed for the image of the aquatic bird on the C$1 coin, weakened 0.2 percent to 99.69 cents per U.S. dollar.

The Standard & Poor’s 500 Index fluctuated as investors watched economic and earnings reports. Goodyear Tire & Rubber Co., the biggest U.S. tiremaker, reported third-quarter profit below analysts’ estimates. Apple Inc. forecast earnings yesterday that fell short of analyst estimates.

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Natural Gas: The Other Automotive Innovation

If you're someone who drives around your neighborhood to save 5 cents a gallon on gas, then $1.50 less per gallon  must sound like a dream come true. Today, that's what a natural gas gallon equivalent sells for -- and consumers get more options every day to get a piece of the natural gas pie.
What do I have to do to get you into this natural gas vehicle?
Until recently, the market for natural gas vehicles was limited to fleet vehicles such as long-haul trucks, delivery vehicles, waste-disposal trucks, public transit vehicles, and fleet cars. Today, natural gas vehicles make up 40% of all purchases for fleet vehicles in the United States . Natural gas was used on fleets because they had their own filling stations and could easily equip their filling stations with natural gas.
The times are a changin', though. Last week, Chrysler Group announced that it's offering a natural gas option for its Ram line of pickup trucks . Orders for RAM HD vehicles from dealerships came in around September, so these trucks are just now hitting the showroom floor.
Chrysler joins Honda (NYSE: HMC  ) as the only companies currently selling natural gas vehicles in retail showrooms . Ford (NYSE: F  ) is close on their heels with the introduction of its F-series trucks with a natural gas option. General Motors (NYSE: GM  ) will also be rolling out its own natural gas version of the Chevrolet Silverado truck.
Aside from Honda's natural gas Civic sedan, the natural gas vehicles available to individual consumers are light- and heavy-duty pickup trucks. This is mostly due to so much research already put in for heavier-duty engines. The joint venture of Cummins (NYSE: CMI  ) and Westport Innovations (Nasdaq: WPRT  ) has developed a strong line of natural gas engines for heavy duty purposes such as long-haul trucking and waste-disposal vehicles. The torque and horsepower demands for these types of vehicles are much closer to pickup trucks than to cars, so the transition to the truck market is much easier. This is why companies like Ford use Westport/Cummins technology in their own vehicles .
Fill 'er up ... if you can find a station
The transition to natural gas for everyday consumers will be difficult. Despite the vehicle choices available, the 1,000 natural gas filling stations around the country simply don't compare with 160,000 plus gas stations.
There are a handful of companies looking to fix this. General Electric (NYSE: GE  ) and Chesapeake Energy (NYSE: CHK  ) just announced their joint project known as "CNG in a box" -- an all-inclusive natural gas pumping station for existing gas stations. This development bodes well for consumers, but it could be a big headache for  Clean Energy Fuels (Nasdaq: CLNE  ) , the current market leader in developing a natural gas infrastructure. Clean Energy Fuels may have a lead for now with its current filling stations and its fast-paced buildout of new locations, but "CNG in a box" could have a big impact in natural gas infrastructure in the upcoming year or so.
What this means for the Investor
The natural gas vehicle and the fueling station have a symbiotic relationship. The more natural gas vehicles available to the public, the more people will need fueling stations. Likewise, the increased presence of fueling stations will make natural gas vehicles a more viable option for consumers. With so many people concerned with process at the pump, this could make natural gas stocks soar. Downstream options in the space like Westport and Clean Energy, which suffer less from high exploration costs and low natural gas prices, give investors the best chance to profit.
Westport has the advantage of having patent protection on the leading technology in natural gas engines. This position has attracted big-time partners such as Cummins and Ford, which give the company strong outlets for its designs. Westport is still young and is not yet profitable, but its sales are strong and analysts are expecting 30% growth over the next five years. No profits means no price to earnings right now, but its price-to-sales ratio of 4.5 is at its lowest since early 2010.
Clean Energy Fuels had the foresight to start building out a national fueling station network before anyone else, which could mean good things in the future. The "CNG in a box" does look like a good product, but it's hard to see that idea making a big difference on the bottom line for megaconglomerate GE, or making up for all of Chesapeake management's other bad decisions.
This is why I think Clean Energy Fuels will still be the better pick for those who want to get in on natural gas infrastructure. The Motley Fool has put together a premium report exploring Clean Energy Fuels' business and the opportunities and risks it faces. To see this report, click here.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

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Peabody expects to resume Mongolia coal mine talks in 2013

(Reuters) - Coal miner Peabody Energy (BTU.N) expects to resume talks in early in 2013 with Mongolia's government over acquiring a stake in the undeveloped western Tsankhi block of Tavan Tolgoi.
"My sense is in the early part of next year we will get into serious discussions," Peabody Chief Executive Gregory Boyce told Reuters.
Peabody has been invited by state-owned Erdenes Tavan Tolgoi to discuss infrastructure ideas for making the development of Tavan Tolgoi more efficient.

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Yen Rises Versus Peers as Stock Drops Boost Safety Demand

The yen strengthened against all of its major counterparts as corporate earnings concerns dragged down Asian stocks, boosting demand for refuge assets.
The currency earlier touched a four-month low against the dollar as a report showing Japan’s consumer prices declined for a fifth month added to prospects the central bank will expand monetary easing. Spanish data due today is forecast to show unemployment increased in the third quarter.

Enlarge image

The yen traded at 80.21 per dollar at 9:03 a.m. in Tokyo after earlier touching 80.38, the weakest since June 25. It has lost 1.1 percent this week, poised for the biggest five-day slide since the period ended Aug. 17. Photographer: Kiyoshi Ota/Bloomberg

“I have no confidence that Europe’s situation is OK,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a currency-margin company. “We’ll still see yen buying for risk aversion.”
The yen rose 0.3 percent to 80.02 per dollar as of 1:27 p.m. in Tokyo after touching 80.38, the weakest since June 25. The Japanese currency climbed 0.3 percent to 103.54 per euro. Europe’s common currency was little changed at $1.2938 after a three-day decline.
The MSCI Asia Pacific Index of shares slid 0.9 percent as companies including Fanuc Corp. and China Unicom (Hong Kong) Ltd. reported earnings that missed forecasts. Apple Inc.’s profit guidance fell short of analysts’ predictions.
Spain’s unemployment rate climbed to 25 percent in the three months ended Sept. 30 from 24.6 percent in the second quarter, according to economist estimates compiled by Bloomberg News. The National Statistics Institute will release the figure today.
Japan’s consumer prices excluding fresh food fell 0.1 percent in September from a year earlier, the statistics bureau said today. That’s well below the Bank of Japan (8301)’s 1 percent inflation target and compares with the 0.2 percent slide estimated by economists.
The BOJ will release a forecast for the nation’s inflation and growth on Oct. 30, when holding its second policy meeting this month. Economy Minister Seiji Maehara, who has been calling for more action from the central bank, said on Oct. 23 that he may attend the gathering.

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Meiji Yasuda: plans to increase yen bond investment in Oct-March

Oct 26 (Reuters) - Japan's Meiji Yasuda Life said on Friday it plans to increase its allocations to Japanese bonds in the October-March second half of the current financial year after cutting investment by 100 billion yen ($1.25 billion) in the first half.
Japan's third-largest private investor plans to slightly reduce its holdings of foreign bonds during the second half of the financial year after a big increase in the first half, Toshihiko Yamashita, chief executive of its investment division, told a news conference.
Meiji Yasuda increased its foreign bonds holdings, mostly in hedged bonds, by around 980 billion yen in April-September, he said. ($1 = 80.1650 Japanese yen)  

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FOREX NEWS: Dollar Unable to Close Fifth Advance on Market’s Fed Slump

• Dollar Unable to Close Fifth Advance on Market’s Fed Slump
• British Pound On the Verge of Critical 128.50 Break Versus Yen Ahead of GDP
• Euro Sees a Controlled Slide after Officials Deflate Rescue Rumors
• New Zealand Dollar Rallies Beyond 0.8200 after RBNZ Maintains Hawkish Bias
• Japanese Yen Connection to Risk Trends Waning as Stimulus Expectations Build
• Australian Dollar Rallies Back Above 1.0300 as Chinese Data Compliments CPI
• Gold Tests 1700 as Fed Holds Back on Stimulus

New to FX? Watch thisVideo; For live market updates, visitDailyFX’s Real Time News Feed

Dollar Unable to Close Fifth Advance on Market’s Fed Slump

A five-day rally proved too much for the Dow Jones FXCM Dollar Index (ticker = USDolllar). Though risk trends were making little progress this past session (bullish or bearish) and the Fed announced that it would not be increasing its MBS purchases as some stimulus-addicts had expected, the dollar put in for a sharp decline Wednesday. Looking at individual performances, we find a better sense of why the dollar slid and why its immediate ambitions are not necessarily to see EURUSD surge above 1.3000. The Dollar Index is comprised of an equal weighting of four of the currency’s most liquid and fundamental distinct counterparts. For the benchmark EURUSD, the greenback actually put in for a modest gain on the day. Elsewhere, the reflection was on cross currency strength rather than dollar weakness. AUDUSD posted an aggressive rally largely due to the strong CPI figures while the cable rallied as a consensus for a rebound in 3Q GDP takes hold of speculative appetites.

For the dollar itself, the top fundamental concern remains general risk trends. In a market where rates are already extremely low, the near-zero yield on US benchmark rates lays the burden for sentiment on the volatility (i.e. ‘Risk’) side of the equation. On that side, we find that that the Forex-based FX VIX Index is very slow to pick up off its five-year lows while the equities version has actually eased back modestly from its three-month high (just below 20 percent). There are two means for leveraging the fear that catalyzes these measures higher: a severe deterioration on fundamentals or rapid price action away from higher yielding assets (which itself is often a response to the first factor).

This past session, we were met with a potential risk booster (and thereby dollar weight) in the form of the FOMC rate decision. Though the central bank had just introduced its QE3 program to buy $40 billion in mortgage-backed securities in September, there was a building murmur amongst the speculative ranks that the central bank would announce an increase to the size of the purchases in response to a pickup in benchmark rates or as a preemptive offset to the expiration of the Treasury purchases in the Operation Twist program at the end of the year. Recognition that the Fed wouldn’t ramp up stimulus removed a burden, but it wasn’t a spark for serious risk aversion. The same reticence heading into event risk and tepid reaction afterwards is a serious possibility heading into the end of this week with the US 3Q GDP reading.

British Pound On the Verge of Critical 128.50 Break Versus Yen Ahead of GDP

On the topic of growth readings, the UK is scheduled to report its own third quarter GDP reading at (08:30 GMT). As we have seen many times before, the UK data has limited influence over the pound itself and rarely is the source of a meaningful trend from the currency. However, this particular piece of event risk carries more sway than most events. Furthermore, there are certain pairs that a particular outcome can play to serious breakout potential (like GBPUSD’s long-term trendline at 128.50) or spur a trend already underway (such as the GBPAUD decline or tentative EURGBP drop back below 0.8100). Key here is a significant enough surprise to stir momentum. The bar has been set high with the Bloomberg consensus showing a 0.6 percent quarterly jump. Falling short of elevated expectations in a weak risk environment would be painful.

Euro Sees a Controlled Slide after Officials Deflate Rescue Rumors

Hope and speculation was starting to leak into the euro’s defense Tuesday with suggestions (initially by unconfirmed sources and then officials themselves) that said Greece had received approval for a two-year extension on its effort to return to the 3 percent deficit-to-GDP effort by the Troika. That was cleared up this past session when the German Finance Minister stated plainly that no such accommodations were made. Adding to that crush of unsubstantiated hope, the Euro Zone PMI Composite ( a good, timely proxy for general growth) printed at its lowest level since June 2009 and rumors began to circulate that EU officials were demanding junior bond holders of Bankia take losses. Quite the change.

New Zealand Dollar Rallies Beyond 0.8200 after RBNZ Maintains Hawkish Bias

The kiwi was easily the biggest mover on the day Wednesday. Once again, market expectations set up a big move from what would have otherwise been considered a ‘neutral’ outcome for event risk. After New Zealand 3Q inflation dropped to its lowest level since 1999 (a 0.8 percent reading that was well below the target band), the market started to assume, the RBNZ would take the same tack as the RBA in a dovish tone. Instead, new Governor Wheeler retained a slight hawkish bias. This is good for a relief rally on risk pairs and momentum for AUDNZD.

Japanese Yen Connection to Risk Trends Waning as Stimulus Expectations Build

As the market’s favorite funding currency in the carry trade, we have come to expect the Japanese yen to hold a perfectly negative correlation to risk trends (fall when sentiment improves, rise when confidence collapses). However, recently we have seen a significant turn on benchmarks in the US equity indexes; and yet, the commodity currency pairs have not conceded to the push. The yen is a safe haven currency in many regards, but there is a better alternative (USD). Carry is what sustains the correlation, but how much carry exposure is left in the market. In the meantime, there is now a suggestion floating around that the government will announce a 400 billion yen stimulus program on Friday.

Australian Dollar Rallies Back Above 1.0300 as Chinese Data Compliments CPI

The Aussie dollar started a rally early Wednesday morning that began with the surprise showing from 3Q CPI figures. The 2.0 percent pace is hardly turning doves to hawks, but it does remove some pressure for aggressive cuts. Then there was the Chinese PMI figures which printed better than expected but were 12 months into a contractionary phase. In fundamentals terms, this is a relief rally. To continue, risk is important.

Gold Tests 1700 as Fed Holds Back on Stimulus

Though there was considerable back and forth for FX pairs this past session, gold aligned nicely to the fundamentals. A reflection of an otherwise steady dollar, the precious metal would look at the Fed decision for guidance. An increase in MBS purchases would have dinged the value of traditional currency nicely and bolstered the alternative store of wealth’s appeal. Alas, that didn’t happen. Traders watch 1700.

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FOREX-Yen weighed down by BOJ easing hopes; kiwi rises

* Fed sticks to stimulus plan, no new steps
* RBNZ less dovish than expected, NZ dollar up
* Yen sags ahead of BOJ policy meeting next week
* Dollar/yen supported by hedge fund buying-trader
By Masayuki Kitano
SINGAPORE, Oct 25 (Reuters) - The dollar edged higher versus the yen on Thursday as the yen stayed under pressure on expectations for more Bank of Japan monetary easing, while a less-dovish-than-expected New Zealand central bank gave the kiwi dollar a boost.
The dollar rose 0.2 percent to 79.97 yen, nearing a three-month high of 80.02 yen set on trading platform EBS on Tuesday.
Dollar buying by hedge funds helped to give the greenback a lift, said a trader for a European bank in Tokyo, adding that the dollar's resilience versus the yen in the past couple of days has been striking, given that there has also been no shortage of dollar sellers.
"Since yesterday, there have been dollar-selling flows starting during Tokyo hours, from players such as investors and Japanese exporters, and overseas players were selling yesterday too," the trader said.
"But the dollar still hasn't fallen," he added.
The yen has retreated recently due to growing expectations that the Bank of Japan will unveil further monetary stimulus at its policy meeting on Oct. 30 in a bid to help the export-focused economy through a global slowdown.
With such expectations already running high, the yen is unlikely to fall sharply even if the BOJ were to embark on more monetary easing next week, said Roy Teo, FX strategist for ABN AMRO Bank in Singapore.
"I think quite a bit has been priced in now, in terms of weakness in the yen," Teo said, adding that ABN AMRO's forecast was for the dollar to trade near 80 yen, roughly where it is now, at the end of the year.
Still, the dollar's downside is likely to be limited since U.S.-Japan yield spreads have moved in the dollar's favour recently, Teo added.
A series of upbeat U.S. economic indicators this month including data pointing to a strengthening recovery in the housing market, have helped lift U.S. Treasury yields and caused U.S.-Japan yield spreads to widen.
Later on Thursday, there will be more U.S. indicators for the market to digest, including data on initial jobless claims and durable goods orders.
The U.S. Federal Reserve on Wednesday stuck to its plan to keep stimulating U.S. growth until the job market improves even as it acknowledged some parts of the economy were looking a bit better. The outcome was in line with market expectations and contained no surprises.
NEW ZEALAND DOLLAR
Investors warmed to the New Zealand dollar after new central bank governor, Graeme Wheeler, kept rates unchanged and reiterated expectations for inflation to head back towards the middle of its 1-3 percent target range.
Some had been wagering that low inflation would lead the bank to open the door for a possible easing.
"The doves are left empty-handed as the brief communique was surprisingly balanced," said Annette Beacher, head of Asia-Pacific Research at TDSecurities.
The kiwi dollar rose 0.3 percent to $0.8220, pulling well away from a six-week low of $0.8100 plumbed earlier in the week.
Among other currencies, the euro held steady at $1.2973 .
The single currency has lost steam since hitting $1.3140 on Oct. 17 as markets grew impatient waiting for Spain to request a bailout and activate the European Central Bank's bond-buying programme.
But investors were also wary of becoming too bearish on the euro, given that Madrid could trigger the programme any time.

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Yen Weakens on BOJ Stimulus Bets, Gains in Equities

The yen weakened against all its major counterparts as stocks rose and investors speculated that the Bank of Japan (8301) will expand monetary stimulus next week.
New Zealand’s dollar reached its highest level in two weeks following the Reserve Bank’s decision to keep interest rates unchanged. The euro traded below $1.30 for a third day before data forecast to show German consumer confidence will fail to improve in November and French household sentiment fell for a fourth month, adding to signs that the region’s debt crisis is hampering growth in its biggest economies.

4:51

Oct. 24 (Bloomberg) -- Huw Pill, chief European economist at Goldman Sachs Group Inc., talks about Europe's sovereign-debt crisis, the outlook for a Spanish bailout request and the European Central Bank's bond-purchase strategy. He spoke yesterday with Bloomberg's Simon Kennedy in London. (Source: Bloomberg)

24:04

Oct. 24 (Bloomberg) -- Klaus Regling, head of the European Stability Mechanism, talks about the European debt crisis, the role of the ESM and the outlook for Europe's economy and bond market. He spoke with Bloomberg's Linda Yueh in Luxembourg yesterday. (Source: Bloomberg)

“The market is pricing in additional easing by the BOJ next week,” said Masakazu Sato, a Tokyo-based foreign-exchange adviser at Gaitame Online Co. “Should the BOJ ease after its counterparts in the U.S. and Europe held off on additional stimulus, that would be received well by the market and cause a yen sell-off.”
Japan’s currency fell 0.2 percent to 79.98 per dollar as of 1:44 p.m. in Tokyo from the close in New York, nearing the three-month low of 80.01 reached on Oct. 23. It dropped 0.3 percent to 103.81 per euro. The 17-nation euro fetched $1.2980 from $1.2974 yesterday, when it reached $1.2921, the weakest level since Oct. 15.
The Nikkei 225 Stock Average (NKY) of Japanese shares rallied 0.3 percent today, contributing to a 0.1 percent gain by the MSCI Asia Pacific Index. The BOJ will release its forecast for Japan’s consumer prices and growth on Oct. 30 when it holds its second policy meeting this month.

BOJ Meeting

Japan’s Economy Minister Seiji Maehara, who has been calling for more action from the central bank, said earlier this week that he may attend the Oct. 30 meeting if his schedule permits. He was present at the central bank’s previous gathering this month, the first minister to do so for more than nine years. The BOJ last time expanded stimulus on Sept. 19, boosting the size of its asset-purchase program by 10 trillion yen ($125 billion).
The yen weakened 2.6 percent in the past month, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 1.2 percent, while the dollar appreciated 0.5 percent.
Reserve Bank of New Zealand Governor Graeme Wheeler left the official cash rate at a record low 2.5 percent. Sluggish domestic demand and a rising currency have pushed inflation below the central bank’s target range of 1 percent to 3 percent target range.

Wheeler’s RBNZ

“Wheeler disappointed those in the market who had been expecting an easing signal,” said Imre Speizer, a market strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “The market was fully priced for a January rate cut, and that pricing will be at least partially unwound.”
New Zealand’s currency, nicknamed the kiwi, touched 82.35 U.S. cents, the strongest since Oct. 9, before trading at 82.20. It jumped as much as 0.6 percent to 65.87 yen, the highest since April 30.
GfK SE (GFK), a market-research company in Nuremberg, Germany, will probably say tomorrow that its consumer-sentiment index will remain at 5.9 for a fourth-straight month in November, according to the median estimate of economists in a Bloomberg News survey. A report from the Ifo institute yesterday showed German business confidence unexpectedly fell to the lowest in more than 2 1/2 years.

Consumer Confidence

In France, household sentiment probably dropped to 84 this month from 85 in September, a separate poll of economists showed. Another report from Spain may show that the unemployment rate increased to 25 percent in the third quarter.
“The recession that you’ve got in the peripheries is certainly now spilling over into the core,” Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender, said of Europe’s economies. “France is in a recession, Germany, if not in a recession, then is very close to it, so that’s certainly not a good sign, and the euro dipped a bit.”
Demand for the dollar was limited after the Federal Reserve said it plans to continue bond buying in a third round of quantitative easing, which tends to debase the U.S. currency.
The Fed said yesterday in a statement after a two-day policy meeting that the U.S. economy is still growing modestly and unemployment remains elevated.
The central bank said it will maintain $40 billion in monthly purchases of mortgage-backed securities while keeping a pledge to hold interest rates at virtually zero until at least mid-2015. It also said a program to lengthen the average maturity of its holdings will remain in place until year-end, when it’s scheduled to expire.

U.S. GDP

U.S. gross domestic product rose at a 1.9 percent annual rate in the third quarter after expanding at a 1.3 percent pace the prior three months, according to the median forecast economists surveyed by Bloomberg ahead of advance data by the Commerce Department tomorrow. It would be the first back-to-back readings lower than 2 percent since the U.S. was emerging from the recession in 2009.
“There’s still a risk the FOMC will do more quantitative easing,” said Commonwealth’s Capurso. “That potential for QE will weigh on the dollar,” he said, referring to the Federal Open Market Committee and quantitative easing.

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