Showing posts with label World. Show all posts
Showing posts with label World. Show all posts

Shares capped by U.S. budget, Italian worries

LONDON (Reuters) - World shares steadied, the euro hovered just above a seven-week low and German government bonds rose on Friday, as concerns over the economic fallout from possible U.S. spending cuts and Italy's political stalemate dampened sentiment.


Automatic spending cuts worth $85 billion are due to be introduced on Friday after U.S. lawmakers failed to reach a deal to avert them.


The International Monetary Fund said on Thursday it would probably slice 0.5 percentage points off its 2 percent 2013 growth forecast for the world's biggest economy if the cuts are fully implemented.


"Financial markets are eerily calm about the issue. Nobody is talking about the sequestration, and I worry about the seeming lack of interest when market sentiment is far from stable after sharp swings following the Italian election," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo.


After shares in Asia had edged down, European shares also got off to soft start. Italy's main FTSE MIB <.ftmib> stock market was down 0.5 percent while London's FTSE 100 <.ftse>, Frankfurt's DAX <.gdaxi> and Paris's CAC-40 <.fchi> were all broadly flat. <.l><.eu/>


Italy's political deadlock has raised concerns about its economic rehabilitation program.


The country's bonds were steady as trading began to gather pace, following their biggest falls in six-months this week. German government bonds, which have been the main beneficiaries of the volatility, opened higher and were last up 9 ticks at 145.07.


New euro zone and UK manufacturing PMI data due just before 0900 GMT are also unlikely to change the picture of a currency bloc in recession and destined, at best, to recover only very slowly in the second half of the year.


China's equivalent survey, out earlier, showed growth cooling and underlined the country's patchy economic recovery . The U.S. report is also due out later in the day.


The biggest concern is that political instability in Italy, the euro zone's third-largest economy, could reignite the bloc's crisis, now in its fourth year. Some have questioned whether the European Central Bank's pledge to help struggling member states which ask for aid can be utilized if there is no workable government.


The euro was slightly higher against the dollar at $1.3090 in earlier trade, a day after it notched its biggest monthly fall against the dollar in nine months.


Italy's uncertainty is also expected to restrict the weekly repayments of the European Central Bank's 1 trillion euros worth of crisis loans, details of which are due at 1100 GMT.


(Reporting by Marc Jones)



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Shares, euro recover as markets nervously eye Italy

LONDON (Reuters) - European shares, the euro and commodities edged higher on Thursday as sentiment improved across riskier asset markets but concerns over the political stalemate in Italy limited gains.


Investors are nervous over whether the political gridlock that emerged from the Italian elections could hurt euro zone growth, and if support from the European Central Bank for a nation in trouble can be used if there's no workable government.


A raft of euro zone officials are due to make public speeches during the day which will be closely watched, while limited data on euro area inflation for January and the latest German unemployment data for February are unlikely to have much impact.


"I can't see any game changing growth numbers, I can't see a policy response to the Italian elections from the ECB, and I can't see any imminent headlines from Italy that will suggest some progress," said Jack Kelly, Investment Director, Global Government Bonds at Standard Life Investments.


Meanwhile markets were supported by reassuring comments from U.S. Federal Reserve Chairman Ben Bernanke on continued monetary easing, and Wednesday's smooth debt sale by Italy.


The MSCI's world equity index <.miwd00000pus> rose 0.5 percent after a strong session on Wall Street and big gains in Hong Kong and Tokyo earlier in the day as the Fed's commitment to existing stimulus measures soothed the concerns over Italy.


Europe's broad FTSE Eurofirst 300 index <.fteu3> opened up about 0.5 percent, while London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were similarly around 0.5 percent higher. <.l><.eu/>


A 0.1 percent rise in U.S. stock futures also hinted at a firm Wall Street start. <.n/>


The recovery in equity markets weighed on demand for safe haven investments like German government bonds, sending Bund futures down around 13 ticks.


In the currency markets the yen was slightly weaker after Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda, a strong supporter of easier monetary policy, to be the next Bank of Japan governor.


The euro was little changed at around $1.3137, having recovered much of the sharp losses made after the inconclusive Italian elections, which had taken the currency down to an eight-week low of $1.3018 on Tuesday.


Commodities were also generally firmer with U.S. crude up 0.25 percent to $92.54 a barrel while Brent was barely changed at $111.89.


Gold managed a slight rise to be around $1,600 an ounce but was headed for its longest stretch of monthly declines in more than 16 years as an improving economic outlook dimmed its safe-haven appeal.


(Reporting by Richard Hubbard; Editing by Peter Graff)



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World shares slide on Italy vote, German Bunds gain

LONDON (Reuters) - Italy's inconclusive election result sparked a selloff on world equity markets on Tuesday and sent safe-haven German bond yields sharply lower as investors feared a resurgence of the euro zone debt crisis.


The euro briefly touched a seven-week low against the dollar to trade near $1.30 after no clear majority emerged from the vote, raising the prospect of weeks of political uncertainty and potentially another election later in the year.


"This is the worst possible outcome from the market's point of view," said Alessandro Tentori, Citigroup's head of global rates.


Yields on 10-year Italian government bonds jumped 45 basis points to 4.82 percent while Italy's main stock market index <.ftmib> tumbled five percent with shares in some of the country's major banks down over 10 percent.


Other European markets were also slumping, with London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> down as much as 2.5 percent. The pan-European FTSEurofirst 300 index <.fteu3> was down 1.3 percent. <.eu/>


Italy's centre-left bloc led by Pier Luigi Bersani narrowly won control of the lower house but no party or coalition appeared to be in a position to take a majority in the equally powerful Senate. A party led by the anti-establishment comic Beppe Grillo gained more than 25 percent of the vote.


"The very close result and the stalemate between the two houses of parliament point to a non-trivial risk of new elections," Holger Schmieding, chief economist at Berenberg Bank, adding there was also a small risk that new elections could lead to a referendum in Italy on the euro.


The euro steadied at around $1.3080, up about 0.15 percent after falling as low as $1.3039, its lowest since January 10.


The focus will now be on an Italian treasury bill auction later, when Rome's borrowing costs could rise.


Ahead of the auction investors were showing a clear preference for safety, with the yield down 8 basis points at 1.5 percent on 10-year German bonds, while riskier Spanish and Portuguese bonds were coming under heavy selling pressure.


Elsewhere investors were awaiting testimony later in the day from U.S. Federal Reserve Chairman Ben Bernanke for further clues to when the central bank intends to slow down or stop its bond-buying program.


Financial markets were rattled last week by minutes of the Fed's January meeting showing some Fed officials were thinking of scaling back its monetary stimulus earlier than expected.


U.S. stock futures were flat to suggest a cautious Wall Street start. <.l><.eu><.n/>


(Reporting by Richard Hubbard. Editing by Alastair Macdonald)



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Yen slumps on Bank of Japan report, eyes on Italy vote


LONDON (Reuters) - The yen hit a 33-month low against the dollar on reports that a strong supporter of aggressive monetary easing is likely to head the Bank of Japan, while Italian assets gained as markets await the outcome of national elections.


Britain's pound also slumped against the dollar, hitting a 2-1/2 year low, following Moody's downgrade of the country's prized triple-A rating late on Friday.


Voting closes in Italy at 1400 GMT, with exit polls due soon after. An inconclusive result would trigger a sell-off in Italian bonds and stocks and renew concerns about the euro.


"If we don't have an indication of a clear winner, there will be pressure on Italian bond yields," said Ishaq Siddiqi, market strategist with trading house ETX Capital.


European shares extended their slow recovery from multi-month lows in early trade as investors kept a close eye on Italy, with the FTSEurofirst 300 <.fteu3> up 0.2 percent at 1,167.55 points.


Reports that the Japanese government was likely to nominate Asian Development Bank President Haruhiko Kuroda as the next central bank governor, along with an academic who has criticized the central bank as deputy governor, sent the yen down to 94.77 to the dollar, lows not seen since May 2010.


Tokyo shares rose 2.4 percent to a 53-month high <.n225> on the news, but gains in other Asian markets were limited by data showing growth in China's giant manufacturing sector in February pulled back from two-year highs.


Sterling fell to a 2-1/2 year trough against the dollar at $1.5073 and a 16-month low against the euro of 87.75 pence after the Moody's downgrade, although the UK's main share index <.ftse> rose.


British government June bond futures touched a low of 115.50, some 56 ticks down from Friday's close as the market reacted to the ratings loss.


(Additional reporting by Clement Tan in Hong Kong; Editing by Will Waterman)



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Red Planet Mars Not So Red Beneath the Surface






The Red Planet‘s signature color is only skin deep.


NASA’s Mars rover Curiosity drilled 2.5 inches (6.4 centimeters) into a Red Planet outcrop called “John Klein” earlier this month, revealing rock that’s decidedly gray rather than the familiar rusty orange of the Martian surface.






“We’re sort of seeing a new coloration for Mars here, and it’s an exciting one to us,” Joel Hurowitz, sampling system scientist for Curiosity at NASA’s Jet Propulsion Laboratory (JPL) in Pasadena, Calif., told reporters Wednesday (Feb. 20).


Mars gets its red coloration from a surface layer of dust that has undergone a rusting process, during which iron was oxidized.


Curiosity’s hammering drill allows scientists to peer beneath that dusty veneer for the first time ever, and the early views at John Klein — where the rover performed its first full-up drilling and sample-collection operation — are intriguing, rover team members said.


The gray powder Curiosity collected “may preserve some indication of what iron was doing in these samples without the effect of some later oxidative process that would’ve rusted the rocks into this orange color that is sort of typical of Mars,” Hurowitz said.


Curiosity landed inside the Red Planet’s huge Gale Crater last August, kicking off a two-year prime mission to determine whether the area could ever have supported microbial life. The 1-ton rover carries 10 different science instruments and 17 cameras, along with other tools such as its arm-mounted, rock-boring drill.


The drill was the last of Curiosity’s gear to get vetted and tested on the Red Planet, and the rover team is thrilled that its first run went so smoothly.


“It’s a real big turning point for us,” said Curiosity lead scientist John Grotzinger, a geologist at Caltech in Pasadena.


Snagging rock powder from the depths of John Klein — which shows signs of long-ago exposure to liquid water — also cements Curiosity’s place in the history books, rover team members said.


“This is the first time any robot, fixed or mobile, has drilled into a rock to collect a sample on Mars,” said JPL’s Louise Jandura, sample system chief engineer for Curiosity. “In fact, this is the first time any rover has drilled into a rock to collect a sample anywhere but on Earth.”


Follow SPACE.com senior writer Mike Wall on Twitter @michaeldwall or SPACE.com @Spacedotcom. We’re also on Facebook and Google+


Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Space and Astronomy News Headlines – Yahoo! News





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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.


Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.


Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.


"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.


Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.


But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.


National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.


"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.


OPTIONS BULLS TARGET GAINS


The spending cuts, if they go ahead, could hit the defense industry particularly hard.


Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.


Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.


"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.


The stock ended up 0.6 percent at $88.12 on Friday.


If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.


General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.


EYES ON GDP DATA, APPLE


The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.


U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.


Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.


Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.


On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.


(Additional reporting by Doris Frankel; Editing by Kenneth Barry)



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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.


Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.


Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.


"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.


Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.


But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.


National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.


"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.


OPTIONS BULLS TARGET GAINS


The spending cuts, if they go ahead, could hit the defense industry particularly hard.


Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.


Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.


"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.


The stock ended up 0.6 percent at $88.12 on Friday.


If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.


General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.


EYES ON GDP DATA, APPLE


The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.


U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.


Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.


Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.


On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.


(Additional reporting by Doris Frankel; Editing by Kenneth Barry)



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Asian shares recover from steep loss, growth worry caps

TOKYO (Reuters) - Asian shares recouped some of the previous session's steep falls as investors reassessed fears of the Federal Reserve ending its ultra-soft monetary policy earlier than expected, but weak U.S. and European data capped Friday's recovery.


European markets are seen rebounding, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open up as much as 0.6 percent. U.S. stock futures were up 0.3 percent to suggest a solid Wall Street start. <.l><.eu><.n/>


The dollar lost 0.3 percent against a basket of currencies <.dxy>, pulling away from a 5-1/2-month high hit on Thursday, as data showing weak business conditions in parts of the United States and across Europe pushed out expectations of any policy tightening.


"It's unlikely that the Fed would begin to wind down its QE (quantitative easing) program until the U.S. economic growth is improving at a faster rate than currently," said Ric Spooner, chief market analyst at CMC Global Markets in Sydney.


Most risk assets had slid to their lows for 2013 on Thursday, in part because of worries the Fed could prematurely paring back its bond buying program. But the weak data in the United States and Europe saw that view quickly reconsidered.


Gold rose 0.5 percent to $1,582.96 an ounce after having hit a seven-month high on Thursday.


Tokyo's Nikkei stock average <.n225> closed up 0.7 percent, reclaiming about half of Thursday's drop.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.2 percent. However, that was only a fraction of its 1.5 percent tumble on Thursday, and the index was set for a weekly loss of 0.8 percent.


Upbeat comments from the central bank governor helped Australian shares <.axjo> jump 0.8 percent, with investors buying back after stocks slumped 2.3 percent on Thursday.


Hong Kong shares <.hsi> bucked the regional trend and fell 0.3 percent while Shanghai shares <.ssec> inched up 0.1 percent.


"In America they're kind of revealing that actually the next thing we need to do is start tightening, and that's why global stocks are very volatile at the moment and we're going to be caught up in that," said Damien Boey, equity strategist at Credit Suisse.


The euro rose from multi-week lows hit on Thursday, gaining 0.4 percent to 123.22 yen. The dollar inched up 0.2 percent against the yen to 93.26.


London copper climbed 0.9 percent to $7,934 a metric ton, after posting its biggest single-day slide this year on Thursday.


Crude oil futures also recovered from Thursday's sell-off, with U.S. crude up 0.3 percent to $93.11 a barrel and Brent rising 0.5 percent to $114.05.


"After the Fed, people seemed to have a little less conviction that we are going to see indefinite low dollar rates, which have attracted a lot of interest in commodities, especially precious metals. But the macro picture hasn't changed tremendously and the underlying demand is still strong," a Hong Kong trader said.


U.S. 10-year Treasury yields were a tad higher in Asia, having eased in the previous session.


The German Ifo business sentiment index at 0900 GMT should offer more clues on the health of European economy, but overall sentiment is expected to remain cautious ahead of elections in Italy over the weekend.


Most investors expect a centre-left government to win and continue with reforms to tackle Italy's debt problems. But a resurgence of former leader Silvio Berlusconi has raised new worries.


(Additional reporting by Thuy Ong in Sydney and Florence Tan and Rujun Shen in Singapore; Editing by John Mair)



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Doubt on Fed easing hits shares, commodities

LONDON (Reuters) - World share markets fell and the dollar and safe-haven assets rose on Thursday, a day after minutes of the Federal Reserve's last policy meeting cast doubts over how much longer the U.S. central bank would stick to its stimulus plan.


After the minutes were released the euro skidded to a six-week low against the dollar of $1.3235, Asian shares experienced their worst day in seven months and gold hit its lowest price since last July, at $1,554.49 an ounce.


"Disagreement over the current path is causing concern for a market that demands certainty," Ben Taylor, a trader at CMC Markets, said of evidence Fed officials were divided on policy.


MSCI's world equity index <.miwd00000pus>, which only on Wednesday had touched a 4-1/2 year high, fell 0.5 percent as the benchmark S&P 500 index <.spx> suffered its steepest daily percentage decline since mid-November.


European markets joined in the selloff with the FTSE Eurofirst 300 index <.fteu3> shedding 0.5 percent, led lower by the banks <.sxip>, which have been at forefront of recent gains. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were all down as much as 0.7 percent.


However, market sentiment could get some support from the release of first reading from February Purchasing Managers' Indexes (PMIs) from across Europe later in the day.


The euro-zone composite PMI is expected to have risen for a fourth consecutive month in February to around 49.0, adding to evidence that economic conditions across the recession-hit region are gradually improving.


The PMI reading would still leave the composite index below the 50 mark which separates expansion from contraction and analysts estimate it would be consistent with a small fall in GDP for a fourth consecutive quarter.


In the fixed income market, German bonds, normally considered a safe haven, saw prices rise with the main Bund futures contract up 30 ticks to 142.85. The move reversed a fall seen on Wednesday but kept the contract within a narrow band before an Italian general election this weekend.


Spain was set to test market sentiment for peripheral euro zone debt with the sale of up to four billion euros of new paper.


The dollar followed up a big gain on Wednesday against a basket of major currencies to add a further 0.1 percent, although it dipped slightly against the yen to 93.41.


Among commodities, London copper struck its lowest in nearly two months, at $7,880 a metric ton, while crude oil extended losses after posting its biggest daily fall so far this year on Wednesday.


(Reporting by Richard Hubbard; Editing by Alastair Macdonald)



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European shares steady awaiting further growth signals

LONDON (Reuters) - European share markets were little changed on Wednesday, awaiting further signs of improving global economic recovery after a big rise in the previous session fuelled by encouraging German data.


The FTSE Eurofirst <.fteu3> index of top European shares was down 0.1 percent in early trading, having gained 1.1 percent on Tuesday, its best day for three weeks <.fteu3>.


London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were all close to flat. <.eu/>


"I see no reason why we can't consolidate the gains and possibly move higher," said Michael Hewson, an analyst at CMC Markets.


Global share markets surged on Tuesday after forecast-beating German sentiment data pointed to an accelerating recovery in Europe's largest economy.


The data comes ahead of more important euro zone flash Purchasing Managers Indexes on Thursday and a German business sentiment survey on Friday that could show whether the region's recovery is taking hold.


The rising hopes of recovery have been supported on Wall Street by a surge in merger activity that has sent U.S. benchmark shares indexes close to record highs. <.n>.


In Asia, share markets outside Japan are at 18-month highs <.miapj0000pus>, as the relatively stronger growth outlook compared with Europe and the United States has drawn in foreign investors.


The rise in equities has weighed on assets perceived as safe havens, with German Bund futures down 25 ticks in early trade to 142.57, though news that Spain may be about to issue a U.S. dollar bond supported sentiment.


In the currency markets the euro rose 0.2 percent to $1.3413 but sterling fell to its lowest in nearly 16 months against a trade-weighted basket of currencies.


Currency traders have their eyes on central banks and the minutes of policy meetings at the Bank of England and the U.S. Federal Reserve that are due to be published later in the day.


The Bank of England minutes at 0930 GMT may reiterate a tolerance for higher inflation or greater disagreement among policymakers over the value of restarting the bank's asset purchase program.


Commodities markets mostly followed equities higher, with spot gold inching up 0.2 percent to $1,605.90 an ounce but stuck near a six-month low.


London copper edged up 0.2 percent to $8,067.75 a metric ton, off Tuesday's three-week lows but Brent crude was little changed at $117.47 a barrel.


(Additional reporting by Masayuki Kitano in Singapore and Thuy Ong in Sydney; Editing by Eric Meijer)



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Philippine, Aussie shares at new peaks; yen firms

TOKYO (Reuters) - Philippine and Australian shares scaled new heights on Tuesday but other Asian shares were mixed, with worries about the risk of an inconclusive outcome in Italy's election and about U.S. budget talks limiting the upside after strong rallies in early February.


European markets looked set to inch higher, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open up 0.1 percent. <.l><.eu/>


U.S. stock futures rose 0.1 percent to suggest Wall Street will reopen with a firmer tone after the President's Day holiday on Monday. <.n/>


"Markets have become top-heavy after rallying through early February on signs of economic recovery in the United States and Europe, and investors now await fresh factors to push prices higher from here," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.


"The broad sentiment is underpinned by a lack of tail risks, but investors are turning to some potentially worrying elements such as Italian elections and U.S. budget talks," he said.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> edged up 0.1 percent. Earlier in the day it had touched a 18-1/2-month high. The index has gained 3.5 percent this year.


Shares in the Philippines <.psi>, where a strong economic growth has led to rising interest in the country as an investment destination, hit a record. The Thai index <.seti> was also up 0.3 percent after recent data showed robust fourth-quarter economic numbers.


Australian shares ended 0.4 percent up at a 4-1/2 year high, continuing a recent rally on better-than-expected corporate earnings.


But Hong Kong shares <.hsi> fell 0.2 percent and Shanghai shares <.ssec> shed 1.1 percent, with real estate and financials leading the declines on concerns that rising property prices would lead to fresh restrictions on the sector.


Tokyo's Nikkei stock average <.n225> ended down 0.3 percent, after surging on Monday to approach its highest level since September 2008 of 11,498.42 tapped on February 6. <.t/>


The concerns about Italy's election this weekend and the talks in Washington over a package of budget cuts set to kick in March 1, also helped limit gains in commodities and also weighed on the euro.


The dollar's strength against a basket of currencies <.dxy> capped gains in gold, with the spot price up 0.2 percent at $1,613.01 an ounce.


London copper steadied at $8,122.50 a metric ton as Monday's three-week low drew bargain hunting given prospects for a slowly improving global economic recovery. Unease over China's limp return to the market from a week-long break held back upside momentum, however.


"I think we've already had the nicest rally that we're going to get this year," Singapore-based Credit Suisse analyst Ivan Szpakowski said. "You can still get some more mild upturns, but frankly as you move to the second half of the year industrial metals are going to trend down.


U.S. crude fell 0.5 percent to $95.43 a barrel while Brent steadied around $117.37.


The euro was steady around $1.3348.


YEN JITTERY


Bank of Japan minutes revealed board members had discussed buying longer-dated government debt at their January meeting, sending the yield on five-year Japanese government bonds to record low.


The yen firmed, however, after Finance Minister Taro Aso told reporters Japan has no plans to buy foreign currency bonds as part of monetary easing and as attention remained focused on who will be the next Bank of Japan governor.


The dollar fell 0.3 percent to 93.61 yen, but remained near its highest since May 2010 of 94.465 hit on February 11. The euro eased 0.4 percent to 125.00 yen, below its peak since April 2010 of 127.71 yen touched on February 6


The yen, which has dropped 20 percent against the dollar since mid-November, fell further at the start of the week after financial leaders from the G20 promised not to devalue their currencies to boost exports and avoided singling out Japan for any direct criticism.


The choice of the next BOJ governor and two deputies has drawn attention as a gauge of how strongly Prime Minister Shinzo Abe is committed to reflating the economy. The G20's message was that as long as Japan pursues aggressive monetary easing to achieve that goal, a weaker yen as a result of such domestic monetary policy will be tolerated, analysts say.


"But that means that some other economy's monetary conditions have been tightened," said Barclays Capital in a note.


"Japan hasn't even changed its policy stance thus far, and the effect of expectations of a looser setting have led to limited moves in domestic interest rates, but the sell-off of the JPY has been marked and has clearly caused unease in other economies," the note said.


(Additional reporting by Melanie Burton in Singapore; Editing by Edwina Gibbs)



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Euro, dollar gain after G20, stocks weaker

LONDON (Reuters) - The euro and the dollar gained against the yen on Monday after the G20 decided not to criticize Japan for its expansionary policies, but Europe's weak growth outlook and the approach of Italian elections capped the moves.


Financial leaders from the world's 20 biggest economies promised in their final statement after a weekend meeting not to devalue their currencies to boost exports, in a bid to defuse talk of currency wars among major nations.


The euro gained 0.15 percent to 125.20 yen, edging up toward a 34-month high of 127.71 yen hit earlier this month, while the dollar rose 0.5 percent to 93.99 yen, closer to its highest since May 2010 of 94.46 hit on February 11.


"Future yen direction will continue to be driven by domestic monetary policy from the Bank of Japan and improving international investor confidence, which are both driving the yen weaker," said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ.


With the G20 meeting over, the focus in European markets is switching to the release of euro area Purchasing Managers' Indexes for February and German sentiment indices due later in the week, and the upcoming general elections in Italy.


Analysts expect the euro area flash PMI indices, which point to economic activity around six months out, to show growth stabilizing rather than a clear end to the current recession across the region.


The FTSEurofirst 300 index <.fteu3> of top European shares opened down 0.1 percent at 1,159.87 points, with Germany's DAX <.gdaxi>, the UK's FTSE <.ftse> and France's CAC-40 <.fchi> flat to slightly weaker. <.l><.eu/>


Earlier, the effect of the G20 statement and further announcements from Japan's Prime Minister Shinzo Abe indicating a renewed drive to stimulate the economy lifted the Nikkei stock index <.n225> by 2.1 percent, near to its highest level since September 2008.


Meanwhile U.S. stock futures were barely changed and are expected to stay little changed as Wall Street will be closed on Monday for the Presidents' Day holiday. <.n/>


In the commodity markets, copper fell 0.7 percent to $8,150 a tonne as traders played catch up after a week-long holiday in China last week, with worries about the euro zone economy weighing on sentiment.


U.S. crude fell 34 cents to $95.50 a barrel but Brent inched up six cents $117.70.


Gold rebounded by 0.3 percent from a six-month low to be $1,614 an ounce as jewelers in China returned to the physical market after the Lunar New Year holiday.


(Reporting by Richard Hubbard. Editing by Giles Elgood)



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Thousands at climate rally in Washington call on Obama to reject Keystone pipeline






WASHINGTON (Reuters) – Thousands of protesters gathered on the Washington’s National Mall on Sunday calling on President Barack Obama to reject the controversial Keystone XL oil pipeline proposal and honor his inaugural pledge to act on climate change.


Organizers of the “Forward on Climate” event estimated that 35,000 people from 30 states turned out in cold, blustery conditions for what they said was the biggest climate rally in U.S. history. Police did not verify the crowd size.






Protesters also marched around the nearby White House, chanting “Keystone pipeline? Shut it down.” Among the celebrities on hand were actresses Rosario Dawson and Evangeline Lilly, and hedge fund manager and environmentalist Tom Steyer.


The event came days after a bipartisan group of U.S. senators made the latest call for Obama to approve the $ 5.3 billion pipeline, seen by many as an engine for job growth and another step toward energy independence.


A new poll by Harris Interactive showed 69 percent of respondents said they support construction of the pipeline, with only 17 percent saying they oppose it.


One of Sunday’s main organizers, climate activist Bill McKibben, said that approving the pipeline, which would transport crude oil from the oil sands of northern Alberta to refineries and ports in Texas, would be akin to lighting a “carbon bomb” that could cause irreparable harm to the climate.


“For 25 years our government has basically ignored the climate crisis: now people in large numbers are finally demanding they get to work,” said McKibben, founder of the environmental group 350.org.


Other major organizing groups on Sunday included the Sierra Club and the Hip-Hop Caucus.


The proposed TransCanada Corp project has been pending for 4-1/2 years. A revised route through Nebraska, which would avoid crossing sensitive ecological zones and aquifers, was approved by that state’s governor last month.


Backers of Keystone, which would transport 830,000 barrels of oil per day, say it would provide thousands of jobs in the United States and increase North American energy security.


Environmentalists oppose the pipeline because the oil sands extraction process is carbon intensive, and say the oil extracted is dirtier than traditional crude oil.


Van Jones, Obama’s former green jobs adviser, said if the president approved the pipeline just weeks after pledging to act on climate change, it would overshadow other actions Obama takes to reduce pollution.


“There is nothing else you can do if you let that pipeline go through. It doesn’t matter what you do on smog rules and automobile rules – you’ve already given the whole game way,” said Jones, who is president of Rebuild the Dream, a non-government organization.


Democratic Senator Sheldon Whitehouse of Rhode Island, the lone member of Congress to speak at the rally, told Reuters Obama risked creating a “credibility gap” if he approved the pipeline.


“He would have to roll out a very complete and very strong package to offset something that on its own is described by government scientist as ‘game-over’ on climate,” he said.


Still, some of Obama’s core constituents favor the pipeline, including the labor union AFL-CIO’s building and construction unit, which sees the potential for job creation for its members, and certain Democratic lawmakers.


In January, nine Democratic senators joined 44 Republicans in urging the president to approve Keystone XL.


(Reporting By Valerie Volcovici; editing by Ros Krasny and Mohammad Zargham)


Weather News Headlines – Yahoo! News




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After decent rally, perhaps time for a pause

NEW YORK (Reuters) - Stocks could struggle to extend their seven-week winning streak as the quarterly earnings period draws to a close and the market bumps into strong technical resistance.


Many analysts say the market could spend the next few weeks consolidating gains that have lifted the benchmark Standard & Poor's 500 <.spx> by 6.6 percent since the start of the year.


The S&P 500 ended up 0.1 percent for the week, recovering from a late sell-off on Friday after a Bloomberg report about slow February sales at Wal-Mart triggered a slide in the retailer's shares. It was the index's seventh week of gains.


Odds of a pullback are increasing, with the market in slightly overbought territory, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.


"I do suspect the closing of the earnings season will lead to at least a pause and possibly a pullback," Zaro said. The S&P 500 could shave 3 to 5 percent between now and early April, he said.


Fourth-quarter earnings have mostly beaten expectations. Year-over-year profit growth for S&P 500 companies is now estimated at 5.6 percent, up from a January 1 forecast for 2.9 percent growth, and 70 percent of companies are exceeding analyst profit expectations, above the 62 percent long-term average, according to Thomson Reuters data.


On Thursday, Wal-Mart, the world's largest retailer, is due to report results, unofficially closing out the earnings period. Investors will be keen to see its quarterly numbers, especially after the Friday's news report that rattled investors.


The S&P 500 has gained 4.3 percent since Alcoa kicked off the earnings season on January 8.


The approaching March 1 deadline for across-the-board federal budget cuts unless Congress reaches a compromise adds another reason for caution, especially with recent economic data indicating the recovery remains bumpy.


Manufacturing output fell 0.4 percent last month, the Federal Reserve said on Friday, but production in November and December was much stronger than previously thought.


TESTING RESISTANCE


The S&P 500 has been trading near five-year highs, and it notched its highest level since November 2007 this week. But the gains have pushed the benchmark index almost as far as it is likely to go in the near term, with strong resistance hovering around 1,525 and 1,540, one analyst said.


As a result, the index is set to move sideways, said Dave Chojnacki, market technician at Street One Financial in Huntington Valley, Pennsylvania. "We just don't have the volume or the catalyst right now" to go above those levels, he said.


At the same time, other analysts say, the market has not shown significant signs of slowing, including a break below 15- and 30-day moving averages.


Such moves would be needed to show that momentum is slowing or that the market is at risk of a correction, said Todd Salamone, director of research for Schaeffer's Investment Research in Cincinnati, Ohio. The S&P 500's 14-day moving average is at 1,511 while the 30-day is at 1,494. The index closed Friday at 1,519.


Recent M&A activity, including news this week of a merger between American Airlines and US Airways Group , helped provide some strength for the market this week and optimism that more deals may be on the way.


In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.


The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded.


Among other companies expected to report earnings next week are Nordstrom , Hewlett-Packard and Marriott International


(Reporting By Caroline Valetkevitch; Editing by Leslie Adler)



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G20 defuses talk of "currency war", no accord on debt


MOSCOW (Reuters) - The Group of 20 nations declared on Saturday there would be no 'currency war' and deferred plans to set new debt-cutting targets in an indication of concern about the fragile state of the world economy.


Japan's expansive policies, which have driven down the yen, escaped criticism in a statement agreed in Moscow by financial policymakers from the G20, which groups developed and emerging markets and accounts for 90 percent of the world economy.


After late-night talks, finance ministers and central bankers agreed on wording closer than expected to a joint statement issued last Tuesday by the Group of Seven rich nations backing market-determined exchange rates.


A draft communique seen by delegates on Friday had steered clear of the G7's call for fiscal and monetary policy not to be targeted at exchange rates but the final version included a G20 commitment to refrain from competitive devaluations and stated monetary policy would be directed at price stability and growth.


"The language has been strengthened since our discussions last night," Canadian Finance Minister Jim Flaherty told reporters. "It's stronger than it was, but it was quite clear last night that everyone around the table wants to avoid any sort of currency disputes."


The communique, seen by Reuters ahead of publication, did not single out Japan for aggressive monetary and fiscal policies that have seen the yen drop 20 percent.


The statement reflected a substantial, but not complete, endorsement of Tuesday's statement by the G7 nations - the United States, Japan, Britain, Canada, France, Germany and Italy.


"We all agreed on the fact that we refuse to enter any currency war," French Finance Minister Pierre Moscovici told reporters.


NO FISCAL TARGETS


The text also contained a commitment to credible medium-term fiscal strategy, but stopped short of setting specific goals.


A debt-cutting pact struck in Toronto in 2010 will expire this year if leaders fail to agree to extend it at a G20 summit of leaders in St Petersburg in September.


"Advanced economies will develop credible medium-term fiscal strategies ... by the St. Petersburg summit," the communique said.


The United States, which has resorted to massive monetary stimulus and higher government borrowing to drive growth and cut jobless queues, blocked a push from Europe to commit to reducing budget deficits.


Russian Finance Minister Anton Siluanov said the G20 had failed to reach agreement on medium-term budget deficit levels.


"We expect by April countries will have made progress on reaching a balanced approach to establishing new budget indicators on both, deficit and the level of government debt," Siluanov said.


Russia, this year's chair of the G20, also expressed concern about ultra-loose policies that it and other big emerging economies say could store up trouble for later.


Siluanov said a rebalancing of global growth required more than an adjustment of exchange rates.


"Structural reforms in all countries, either with a positive or negative balance of payments, should play a bigger role," he said, adding that spillover effects of unconventional monetary policy, conducted by central banks in some countries, should be closely monitored.


The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.


On currencies, the G20 text reiterated its commitment last November, to move towards "exchange rate flexibility to reflect underlying fundamentals and avoid persistent exchange rate misalignments".


"The G7 made a very clear statement this week. I think you'll see the G20 echo what was said, and say that currencies should not be used as a tool of competitive devaluation," Britain's finance minister, George Osborne, said in Moscow.


"Countries shouldn't make the mistake of the past of using currencies as a tool of economic warfare."


(Additional reporting by Randall Palmer, Lesley Wroughton, Tetsushi Kajimoto, Jan Strupczewski, Lidia Kelly and Jason Bush. Writing by Douglas Busvine. Editing by Timothy Heritage/Mike Peacock)



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Yen firms as G20 eyed, weak Europe dampens mood

LONDON (Reuters) - The yen firmed on Friday as investors braced for the likelihood of more conflicting comments on currencies from the G20 meeting, while a revival in worries about global economic growth weighed on shares and commodities.


The G20 forum in Moscow is in the spotlight as officials are expected to discuss whether the ultra loose monetary polices of the United States, Japan, Britain and the euro zone depart from the group's commitment to market-driven exchange rates.


The dollar shed 0.5 percent to 92.46 yen, dropping as far as a one-week low of 92.25 yen while the euro fell to a two-week low of 123.10 yen.


The Japanese currency gained some support when a Russian official said drafting the final communique from the G20 meeting was proving difficult, but the text would not single out Japan for criticism.


"There is an issue of 'who started the fire?' You can say that Japan has getting really aggressive but then they might say, well what have Americans done, what about the British and so on," said William De Vijlder, chief investment officer at BNP Paribas Investment Partners.


The yen was also underpinned by expectations that Japanese Prime Minister Shinzo Abe is close to selecting his nominee for Bank of Japan governor. A decision could come in the next few days, sources close to the process told Reuters [ID:nL4N0BF1LS]


Shares were broadly flat with the pan-European FTSEurofirst 300 index <.fteu3> little changed at 1,163.34 points following dismal gross domestic product data from across the euro zone on Thursday.


The surprisingly sharp contraction in the region's economy during the final three months of 2012 has undermined hopes of an early recovery from recession, but also boosted talk that the European Central Bank may have to ease policy further.


Frankfurt's DAX <.gdaxi>, Paris's CAC-40 <.fchi> and London's FTSE <.ftse> were around 0.1 to 0.3 percent lower.


The weaker demand outlook implied by the GDP data sent Brent crude under $118 a barrel and on course for its first weekly loss since mid-January.


Front-month Brent futures LCOc1 fell 30 cents to $117.70 a barrel, while Gold dropped to a six-week low of $1,629.89 an ounce, and was headed for its biggest weekly drop since December.


(Reporting by Richard Hubbard; editing by David Stamp)



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Asian shares gain on improving sentiment, G20 eyed

TOKYO (Reuters) - Asian shares rose on improving risk sentiment while the yen steadied ahead of the weekend meeting of G20 finance and central bank officials, whose views on global growth and differences over currencies will be scrutinized by investors.


"Asian markets have extended gains with risk sentiment remaining resilient as markets continue to push to new highs. Ahead of the European open, we are calling the major bourses relatively flat with GDP numbers in focus," Stan Shamu, market strategist at IG Markets, said in a note.


Financial spreadbetters were predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open little changed ahead of European gross domestic data. U.S. stock futures were also steady, suggesting a similarly quiet Wall Street open. <.l><.eu><.n/>


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> extended gains, rising 0.6 percent as its materials sector <.mispjmt00pous> outperformed with a 1.6 percent increase partly on a jump in shares of top miners ahead of earnings news from Rio Tinto .


Australian shares rose 0.7 percent to their highest since September 2008, as a strong earnings season and receding fears about European and U.S. debt woes bolstered investor sentiment.


South Korean shares <.ks11> were flat after Wednesday's three-week closing high and biggest daily percentage gain since January 2 when investors cheered a pause in the yen's decline.


Market reaction was muted after monetary policy decisions from South Korea and Japan during Thursday's sessions.


The Bank of Korea held interest rates steady for a fourth straight month as expected, as global economies show signs of improvement and domestic inflation remains low. But the decision was not unanimous, its governor told a news conference.


The Bank of Japan also kept monetary policy steady and upgraded its economic assessment, as recent falls in the yen and signs of a pick-up in global growth give it some breathing space after expanding stimulus just a month ago.


A pause in the yen's rebound positively affected Japanese equities on Thursday, with the Nikkei average <.n225> advancing 0.7 percent after Wednesday's 1 percent slump when the firming yen prompted investors to take profits on exporters. <.t/>


"Usually the BOJ doing nothing causes a bit of disappointment, but since there are concerns about the flak Japan might get at the G20 this weekend for the weakening yen, standing pat will actually be a relief to the market," said Masayuki Doshida, senior market analyst at Rakuten Securities.


Markets in China and Taiwan remain shut for the Lunar New Year holiday but Hong Kong resumed trading on Thursday.


YEN IN SPOTLIGHT


The dollar recouped earlier losses to inch up 0.1 percent to 93.49 yen after marking its highest level since May 2010 of 94.465 on Monday. The euro steadied at 125.60 yen, below its peak since April 2010 of 127.71 yen touched last week.


The yen lost nearly 20 percent against the dollar between November and early February, and more than 20 percent against the euro.


The yen began its steady fall in mid-November as expectations built for a new government to take aggressive steps to bring Japan out of years of slump. Prime Minister Shinzo Abe is pushing for strong reflationary steps, pressuring the BOJ to take unprecedented expansionary measures.


The yen's rapid depreciation, after years of sharp appreciation, has drawn some criticism from overseas, with rhetoric heating up ahead of the Group of 20 nations meeting on Friday and Saturday in Moscow.


Russian Deputy Finance Minister Sergei Storchak told reporters on Wednesday in Moscow that the yen was "definitely overvalued" and that "there are no signs" that Japan's monetary authorities were intervening on the foreign exchanges.


Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, said various interpretations this week over what the G20 may say about Japan's policy and a weak yen trend "have been used as an excuse to adjust positions ahead of the meeting, and I expect forex to be in ranges."


"Currency will be discussed but I think Russia wants the meeting to focus on broader economic issues involving emerging markets as it is the G20 gathering," he said.


Traders and analysts say 90-95 yen to the dollar appeared to be a comfortable range for now, unless upside surprises emerge in the U.S. economy or Japan quickly implements unexpectedly drastic reflationary policies, both of which will swing the dollar higher above the range.


They said the yen's upside was also capped around 87 yen, halfway between its slump from mid-November to early February.


Market reaction was muted to comments from Jack Lew, President Barack Obama's pick to run the Treasury Department, who on Wednesday said he would support a strong U.S. dollar, in line with longstanding U.S. policy.


Data published on Thursday showed Japan's economy shrank 0.1 percent in October-December from the previous quarter, falling for a third straight quarter.


U.S. crude was up 0.1 percent to $97.13 a barrel and Brent added 0.1 percent to $117.98.


London copper rose 0.2 percent to $8,240.50 a metric ton (1.1023 tons).


Gold regained some strength as recent losses attracted buying interest from Asian jewellers after the Lunar New Year break, but firmer equities could limit gains.


(Additional reporting by Joyce Lee in Seoul and Tomo Uetake in Tokyo; Editing by Eric Meijer and Richard Borsuk)



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Dollar, euro ease against yen on G7 policy doubts

LONDON (Reuters) - The yen rose against the dollar and the euro on Wednesday as investors reconsidered a G7 statement on exchange rates aimed at soothing concerns of a currency war but instead provoked a fresh bout of volatility.


The G7 reaffirmed its commitment to market-determined exchange rates and said that fiscal and monetary policies must not be directed at devaluing currencies in its statement which was interpreted as condoning the recent weakness in the yen.


However, an official from the group later said Tuesday's statement was meant to signal concerns about excessive yen moves, prompting a vicious reversal in the currency.


"It appears there is a lack of consensus at the G7 level in tackling the unintended weakening of currencies, due to the adoption of expansionary domestic monetary policies," analysts at Barclays said in a note clients.


In early European trading the dollar and the euro had both fallen by 0.3 percent against the yen to 93.20 yen and 125.42 yen respectively.


At the center of the debate is Japan, where Prime Minister Shinzo Abe's government has made it clear that it will push for aggressive policies to beat deflation through drastic monetary expansion. Anticipation of a bolder Bank of Japan policy has sent the yen down nearly 20 percent against the dollar since November.


Dealers said the market was likely to trade cautiously ahead of the outcome of a Bank of Japan meeting ending on Thursday and before a meeting of the Group of 20 finance ministers and central bankers in Moscow on Friday and Saturday.


Markets are also awaiting the Bank of England's quarterly inflation report which should show whether there's any realistic chance of further asset purchases in coming months which would add to pressure on sterling.


The euro zone will publish industrial production data for December at 1000 GMT, seen as likely to confirm that output in final quarter was very weak.


The data comes out a day ahead of flash estimates of fourth quarter GDP for the whole euro area which is forecast to show growth contracted by around 0.4 percent in the final three months of the year - the steepest quarter-on-quarter decline since the first quarter of 2009.


Ahead of the data Europe's share markets were little changed with the FTSE Eurofirst 300 index <.fteu3> of top companies opening flat but near the top of a six-day trading range, with the focus on corporate earnings reports.


London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were between 0.1 percent higher and 0.2 percent down.


Debt markets were also little changed as investors await the results of an auction of long-term Italian debt which is seen as a test of demand before elections later this month.


Italian debt has been under pressure in recent weeks as a comeback in the opinion polls by former Prime Minister Silvio Berlusconi's party has raised the prospect of a fragmented parliament that could hamper the next government's reform efforts.


Germany also plans to sell 5 billion euros of two-year bonds.


(Editing by Anna Willard)



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Yen near lows vs dollar, Asian shares ease in subdued trade

TOKYO (Reuters) - The yen hovered near its lows against the dollar and Tokyo stocks jumped closer to a 33-month high on Tuesday after markets took comments from a U.S. official as approval for Japan to pursue anti-deflation policies that weaken the yen.


U.S. Treasury Undersecretary Lael Brainard said on Monday the United States supports Japanese efforts to end deflation, but she noted that the G7 has long been committed to exchange rates determined by market forces, "except in rare circumstances where excess volatility or disorderly movements might warrant cooperation.


"Her (Brainard's) comments gave confidence to the market. It was surprising, and was taken as the Obama administration giving a green light to 'Abenomics'," said Takuya Takahashi, a market analyst at Daiwa Securities.


Japan has faced some overseas criticism that it is intentionally trying to weaken the yen with monetary easing, but talk of a so-called currency war was dialled back ahead of a Group of 20 meeting in Moscow on Friday and Saturday.


G20 officials said on Monday the Group of Seven nations are considering a statement this week reaffirming their commitment to "market-determined" exchange rates.


European Central Bank council member Jens Weidmann also said the euro was not overvalued at current levels.


The dollar slipped 0.3 percent to 94.185 yen after marking its highest level since May 2010 of 94.465 on Monday. The euro eased 0.3 percent to 126.12 yen after rising more than 2 percent on Monday. It hit its highest since April 2010 of 127.71 yen last week.


"I think the yen's weakening is a function of (playing)catch-up," and not Japan resorting to deliberate devaluation of its currency, said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York. "It's the market's way of saying: 'We're convinced there is a movement afoot to reinflate Japan.'"


The yen is pressured by anticipation that Prime Minister Shinzo Abe will endorse a far more dovish Bank of Japan regime when the current leadership's term ends next month, although the BOJ is expected to refrain from taking fresh easing steps when it meets this week.


Share trading was subdued with many regional bourses shut for holidays. Encouraging trade data from China late last week was lending support to sentiment but non-Japan markets lacked momentum as investors awaited key events such as the U.S. president's State of the Union address for trading cues.


European markets are seen inching lower, with the Euro STOXX 50 index futures down 0.1 percent. A 0.2 percent drop in U.S. stock futures also suggested a soft Wall Street start. <.l><.eu><.n/>


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 0.1 percent, with Australian shares closing flat ahead of corporate earnings due this week.


The weaker yen in turn hoisted the Nikkei stock average <.n225> to close 1.9 percent higher on improving earnings prospects for exporters. <.t/>


Trading resumed in Japan and South Korea but markets in Singapore, Hong Kong, mainland China, Malaysia and Taiwan remained closed.


STATE OF UNION ADDRESS


Currency and equities markets were also looking ahead to President Barack Obama's State of the Union address later on Tuesday night, for any signs of a deal to avert automatic spending cuts due to take effect March 1.


"We believe that the G20's take on currency wars, Mr. Obama's upcoming state of the union address, and data on the current condition of the U.S. economy should help markets assess where the global recovery stands and where we are heading," Barclays Capital said in a research report.


U.S. and Chinese data last week lifted the tech-focused Nasdaq Composite Index <.ixic> to a 12-year closing high and the Standard & Poor's 500 Index <.spx> to a five-year peak on Friday.


Financial markets showed a muted reaction to the news that North Korea has conducted a nuclear test.


"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.


U.S. crude futures edged down 0.1 percent to $96.90 a barrel while Brent steadied around $118.


Spot gold stayed near a one-month low.


(Additional reporting by Ayai Tomisawa, Lisa Twaronite and Osamu Tsukimori in Tokyo; Editing by Chris Gallagher)



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Square scandal highlights growing pains at tech start-ups


SAN FRANCISCO (Reuters) - When Square Chief Operating Officer Keith Rabois left his job last month, citing legal threats from a young colleague with whom he had a two-year relationship, he threw a spotlight on the risks associated with the freewheeling startup culture that many entrepreneurs cherish.


Startups often thrive on a lack of rules and boundaries. But experts say that as they make the transition from a handful of people in a room to sizeable businesses, the hazards of operating without manual - including lawsuits, reputational hits, and waning employee morale - grow exponentially.


Longtime employees sometimes chafe at the arrival of human resources professionals, codes of conduct and other policies that they fear will step on the company's culture. Yet entrepreneurs and start-up investors say they ultimately have little choice.


Take Facebook Inc, which displayed murals of naked women, some riding dogs, in the Palo Alto offices it leased as a small company in 2005. As proud as some of the early employees were of them — one was painted by the then-girlfriend of Facebook impresario and serial entrepreneur Sean Parker — they got painted over shortly after venture-capital firm Accel Partners invested in the company. Facebook had no immediate comment.


About a year into the life of online-ad tracking startup DoubleVerify, an employee gave a presentation about how advertising fraud takes place. Many in the room got a rude awakening when a slide popped up showing an example of an ad where it shouldn't be: next to a particularly raunchy image on a pornography site.


"That was the first time we realized, ‘We gotta get a little more institutionalized," recalls founder Oren Netzer. Today, the company has policies concerning naked images. The same presentation would use a less controversial example, or obscure anything racy.


Alcohol is another dicey topic. "We used to have these new employee hazing ceremonies," said Dheeraj Pandey, chief executive of virtualization company Nutanix, largely involving knocking back tequila shots with chili peppers. But once the company hit about 100 employees, some new hires pushed back and he started considering the potential for liability.


"It just faded away about four, five months ago," he said about the hazing. Potential concerns run the gamut from some employees feeling excluded if they don't drink to incidents that sometimes accompany drunken behavior.


At 250-person social-media management company Hootsuite, "I somewhat infamously have said I never wanted to work at a company with an HR department," says founder Ryan Holmes.


"That's coming back to bite me a little bit now."


MISSION STATEMENTS, HR FLUFF


A year ago, Holmes made his executive assistant the director of human resources. That type of promote-from-within strategy for HR is commonplace, startups say.


A few months into her role, the new HR director told Holmes the company needed a mission statement. "I said, ‘Oh my God, this is HR fluff,'" Holmes remembers. But shortly afterward, when he overheard new hires discussing beliefs he thought were out of step with Hootsuite's ethos — he says he cannot recall the details — he realized she was right.


But Holmes says he is resisting conforming on other levels. Hootsuite employees attend teambuilding trips, including a recent stay at a hot-springs resort. That is the type of event big companies cut out — Google Inc halted its famous all-employee trips in 2009 - often because of the potential for various kinds of legal liability and cost.


Holmes says he might have to rethink his overnight trips if the company ever goes public, but for now, he plans to keep going. "We think it's very valuable," he says.


At Nutanix, Pandey decided last summer's annual whitewater rafting trip on the Sacramento River would be the last. "We used to go through some rough rapids, and had a couple of close shaves," he said. "A couple of the guys aren't good swimmers."


Part of the philosophy is that young companies want to encourage a "think different" attitude, employees say.


"Start-ups by design want to differentiate themselves from the large companies like the HPs that have very thick employee handbooks," said Brian Samson, chief executive of HR for Startups, referring to computer company Hewlett Packard Co.


Start-ups often deal with the inevitable by aiming for a careful, light-footed approach to new policies.


"I've tried to make sure we don't talk about rules," says Evan Wittenberg, HR head at cloud-content firm Box. "The language around this really matters. These are guidelines."


Still, there are tensions as the company, which now employs around 700 and is considered a likely prospect for a 2013 initial public offering, grows. Cecilia Wong, people manager at Box, cites the daylong orientation process for new employees.


"I've had some managers ask, ‘Why's it a full day? On my first day, it was just an hour, then I could hit the ground running,'" she says. She believes the full day is important for explaining the company culture, business and logistics issues.


The consequences of neglecting HR policy and other big-company practices can be dire.


Rabois said he resigned from his post after an ex-boyfriend that he recommended for a job at Square threatened to sue for sexual harassment. A Square spokesman declined to say what kind of HR policies, if any, the company has in place, and he declined to comment on any issue related to the relationship that led to Rabois' resignation. Square had about 30 employees when Rabois joined and now has about 400.


Many large organizations - not just companies, but nonprofits and government agencies - have firm policies about intra-office romances, and often prohibit them if one party has any kind of supervisory authority over the other.


"You can be open to liability if the relationship goes sour, and you have a person in a position of power over the other person," said San Francisco employment attorney Therese Lawless. "Any actions of that person in power can be deemed to be retaliatory."


In addition, it can create a morale issue if other employees believe the more junior employee in an ongoing relationship is receiving favorable treatment, she said.


(Reporting By Sarah McBride; Editing by Jonathan Weber and Leslie Gevirtz)



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