FOREX-Dollar mauled as euro leads vicious short squeeze

1. Dollar speculators squeezed out of crowded positions
2. Euro rallies as EU yields spike, Greek creditors make offer
3. ECB meets later in day, Australia GDP a test for Aussie

By; Wayne Cole

SYDNEY, June 3 (GNN) - The U.S. dollar was broadly lower on Wednesday as hopes for progress in Greek debt talks and a huge spike in European yields combined to give the euro its biggest gain in three months.

The dollar index, which measures it against a basket of six major currencies, was down at 95.943 having shed 1.5 percent on Tuesday in its biggest one-day drop since July 2013.

The euro was enjoying the view at $1.01150, having climbed 2 percent overnight, while the dollar lapsed back to 124.08 yen and away from a 12-1/2-year peak of 125.070.

CitiFX head G10 strategist, Steven Englander, said the violence of the shift reflected just how much speculators had been long of dollars and short of euros.

"Today's EUR move started as a rates move and looks now to be a position unwind. We estimate that a third of the EURUSD move is driven by the change in rates, and 67 percent by positioning unwinds."

The initial catalyst was EU data showing a surprisingly large increase in headline and core inflation which suggested the European Central Bank's latest easing campaign was gaining traction. [TOP/CEN}

German 10-year Bund yields surged 16 basis points to 0.68 percent, the biggest jump in about three years, while Spanish, Italian and Portuguese yields hit 2015 highs.

The central bank holds a policy meeting later Wednesday and will likely reaffirm its commitment to the trillion euro asset purchase programme.

The euro got another leg up when the ECB, the European Commission and the International Monetary Fund agreed on the terms of a cash-for-reform deal to be put to Greece in a bid to conclude four months of debt stalemate.

It was far from clear if the leftist government of Prime Minister Alexis Tsipras would accept the plan, but the market took it as an encouraging step forward.

Dealers said the speed and size of the euro rally argued for consolidation in the very term, while the technical background looked better after a break of the 20-day moving average at $1.1132. The next major chart target was $1.1210/20 and a breach there could trigger a move to the $1.1325/40 zone.

Still, there is a host of U.S. economic data yet to come this week, including the payrolls report on Friday, and any signs of strength could revive dollar bulls.

For now, the dollar's retreat has lifted commodities and related currencies.

The Australian dollar shot to $0.7762, having jumped 2.2 percent on Tuesday, with the New Zealand dollar not far behind at $0.7175.

The Australian currency faces a hurdle in the form of gross domestic product data later in the session, where an outcome of less than the expected 0.7 percent gain could cause a pullback. (Reuters)(Editing by Eric Meijer)

UPDATE 2-California Senate votes to raise smoking age to 21 from 18

(Adds details on other states)

By: Alex Dobuzinskis

(GNN) - The California Senate voted on Tuesday to raise the legal smoking age in the most populous U.S. state to 21 from 18, in a move that could make California one of the states with the highest smoking age.

The measure was approved by the Senate 26-8 and must now be approved by the state Assembly.

"We will not sit on the sidelines while big tobacco markets to our kids and gets another generation of young people hooked on a product that will ultimately kill them," Senator Ed Hernandez, a Democrat and the bill's author, said.

"Tobacco companies know that people are more likely to become addicted to smoking if they start at a young age," Hernandez added in a statement.

The Institute of Medicine, the health arm of the National Academy of Sciences, has said that increasing the smoking age to 21 would result in more than 200,000 fewer premature deaths nationally for those born between 2000 and 2019.

The Cigar Association of America opposed the bill, contending that 18-year-olds can serve in the military, vote and sign contracts and should thus enjoy the right to smoke, according to the Los Angeles Times.

David Sutton, a spokesman for Altria Group Inc, the parent of Philip Morris USA, said in an emailed statement that Altria believed states should defer to the federal government and "allow FDA and Congress the opportunity to think through this issue further before enacting different minimum age laws."

Representatives for R.J. Reynolds Tobacco Company, a unit of Reynolds American Inc, did not return calls seeking comment.

Hawaii lawmakers approved a measure in April to raise the smoking age to 21, and that is awaiting the state governor's signature. Democratic Governor David Ige has not indicated whether he will sign the measure, and has until June 29 to decide whether to veto it, a spokeswoman for his office said.

Since 2013, New York City has required tobacco purchasers to be 21 or older, according to the National Conference of State Legislatures. No state has a smoking age that high, but Alabama, Alaska, Utah and New Jersey set it at 19. (Reuters)(Reporting by Alex Dobuzinskis and Cynthia Johnston; Editing by Sandra Maler)

FOREX -Dollar slips vs yen as Tokyo shares slip; Aussie up on China data

* Dollar slips broadly at start of second quarter

* Yen firmer as weak Tokyo shares weigh on risk sentiment

* Better-than-expected China factory data bolsters Aussie

* ADP jobs report could provide clue to Friday payrolls (Adds comments, updates prices)

By Masayuki Kitano and Lisa Twaronite

SINGAPORE/TOKYO, April 1 (GNN) - The dollar slipped versus the yen at the start of a new quarter on Wednesday, as a soft reading on Japanese business sentiment dented Tokyo shares and helped bolster the safe haven yen.

The Australian dollar gained a lift from a better-than expected reading of Chinese factory activity and that added to the broadly weak tone of the greenback, traders said.

"Dollar/yen has led this move today and I think it's basically trading off the back end of the Nikkei," said Stephen Innes, senior trader for FX broker Oanda in Singapore.

The dollar fell 0.5 percent to 119.56 yen, down from Tuesday's one-week high of 120.37 yen.

Japan's benchmark Nikkei share average was last down about 1 percent, as investors booked profits on the first day of Japanese financial year and after soft reading on the Bank of Japan's tankan business sentiment survey.

Weakness in Japanese equities can dent risk sentiment and lend support to the yen.

"Any sort of negative sign, when the market gets over-extended like it is right now, you're going to see some type of profit-taking or pullback," Innes said, referring to long positions in the U.S. dollar.

The Australian dollar rose 0.4 percent to $0.7636, having clawed up to as high as $0.7664 after China's official Purchasing Managers' Index (PMI) showed that activity in China's factory survey unexpectedly picked up in March.

The Australian dollar is sensitive to Chinese data due to Australia's large trade exposure to China.

The better-than-expected China PMI helped lift the Australian dollar and likely triggered some paring back of bullish bets on the U.S. dollar, said Jesper Bargmann, head of trading for Nordea Bank in Singapore.

"Market will have been a little bit of long of (U.S.) dollars, I assume, so we're just seeing a little squeeze on the back of that number," Bargmann said.

The euro rose 0.5 percent to $1.0789, getting some respite after suffering its worst quarterly performance ever in the first quarter.

The euro slid 11 percent against the dollar in January-March, its biggest quarterly drop since its 1999 launch, due to the the European Central Bank launching its quantitative easing programme, with the U.S. Federal Reserve is expected to start raising interest rates this year.

The euro will probably remain under pressure this quarter, although it is unlikely to fall as fast as it did in the previous three months, said Nordea Bank's Bargmann.

"I think the theme is kind of intact, until we start seeing the first hike out of the U.S. We still have the Greek situation looming, so overall there will still be pressure on the euro," he said.

"Against the dollar we found a very important support level around $1.04/$1.05. I think it will be challenged again and I think we may test around parity," Bargmann added.

The euro has regained some ground in the past couple of weeks after setting a 12-year low of $1.04570 in mid-March.

Later on Wednesday, the ADP National Employment Report will provide a picture of the U.S. private sector employment situation and could offer some clues to Friday's non-farm payroll report. (Reuters)(Editing by Simon Cameron-Moore)

New York regulator Lawsky aims at Deutsche Bank over Libor - FT

(GNN) - Benjamin Lawsky, New York state's financial services regulator, has added himself to the regulators investigating Deutsche Bank AG for manipulation of the Libor benchmark borrowing rate, the Financial Times reported on Sunday, citing unnamed sources.

The New York Department of Financial Services' probe of the German bank marks the first Libor investigation for the regulator. Deutsche Bank is currently negotiating a settlement with the U.S. Justice Department, the newspaper said.

Lawsky's department regulates banks with charters in New York as well as foreign banks with branches in the state. He is not investigation other banks, which have already settled with the government, the Financial Times said.

In a little over two years, regulators have looked into more than a dozen banks and brokerages over allegations they manipulated benchmark interest rates such as Libor and Euribor, which are used to price trillions of dollars of financial products from derivatives to mortgages and credit card loans. (Reuters)(Reporting by Caroline Humer; Editing by Jonathan Oatis)

UPDATE 2-US fixing software glitch with Boeing GPS satellites

(Adds company responsible for ground segment)

By Andrea Shalal

(GNN) - The U.S. Air Force said on Sunday it is working to resolve a technical error that affected some Boeing Co Global Positioning System (GPS) satellites, although it did not hurt the accuracy of GPS signals received by users around the world.

Air Force Space Command said the glitch appeared to involve the ground-based software used to index, or sort, some messages transmitted by GPS IIF satellites built by Boeing, but officials were still investigating other possible causes.

Lockheed Martin Corp runs the GPS "ground control" segment, which enables Air Force officials to operate all GPS satellites, including the IIF satellites built by Boeing.


The Air Force said the issue came to light in recent days, but a close examination of archived data showed the problem had gone unnoticed since 2013. It gave no details of the extent of the problem, its impact on the overall system or how it had come to light.

It said the glitch appeared related to the ground software that builds and uploads messages transmitted by GPS satellites, resulting in an occasional message failing to meet U.S. technical specifications.

The Air Force said it had put in place a temporary solution and officials were working on a permanent fix.

Boeing, prime contractor for the GPS IIF satellites, had no immediate comment on the news, which comes days before the Air Force is due to launch the ninth GPS IIF satellite into space.

Lockheed officials also had no immediate comment.

Air Force Space Command spokesman Andy Roake said it was unclear which contractor was responsible for the problem.

GPS is a space-based worldwide navigation system that provides users with highly accurate data on position, timing and velocity 24 hours a day, in all weather conditions.

The system is used by the military for targeting precision munitions and steering drones. It also has a wide range of commercial applications, including verification of automated bank transactions, farming and tracking shipments of packages. Car navigation systems and mobile phones use GPS to determine their location.

Boeing is under contract to build 12 GPS IIF satellites. The first of the GPS IIF satellites was launched in May 2010. (Reuters)(Reporting by Andrea Shalal; editing by Susan Thomas)

Seacoast Banking to gain from Florida's growth -Barron's

(GNN) - Seacoast Banking Corp. of Florida is set to gain from economic growth in the state, where more than 700 new residents are added per day, weekly newspaper Barron's reported in its March 23 edition.

The shares look inexpensive and in the next 18 months could move up by 20 percent as the bank's loan growth and earnings pick up, Barron's said. FIG Partners analyst Christopher Marinac told the newspaper that the shares are worth $16. In a buyout, the stock would likely fetch more, Barron's wrote.

The bank's biggest shareholder, CapGen Financial Group, has had its stake for six years and may be looking to exit either through a secondary stock offering or a sale, it said.

Seacoast's shares closed at $13.60 on Friday.

(Reuters)(Reporting by Caroline Humer; Editing by Leslie Adler)

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UPDATE 1-Houthi chief vows to fight militants, sees Libya-style strife

(Adds quotes, background)

(GNN) - The leader of Yemen's powerful Houthi movement vowed on Sunday to pursue Islamist militants behind suicide attacks anywhere and said the country was in danger of descending into Libya-style turmoil.

In a live televised speech, Abdel-Malek al-Houthi said his decisison to mobilise his fighters amid accelerating violence in recent days was aimed against Islamic State, which claimed responsibility for bombings that killed more than 130 in the capital Sanaa on Friday, and against al Qaeda.

He also criticised the U.N. Security Council, saying it was led by countries that plotted "evil" against others.

Violence has been spreading across Yemen since last year when the Iran-allied Houthis seized Sanaa and advanced into Sunni Muslim areas, leading to clashes with local tribes and al Qaeda and energising a southern separatist movement.

Houthi did not elaborate on his criticism of the Council. But diplomats in New York said the council would on Sunday condemn the takeover of much of Yemen and its institutions by the Houthis and warn of "further measures" if hostilities do not end.

In combative remarks, Houthi said his foes had encouraged militant violence and used political reform talks to buy time, something he said would eventually transfer "the Libyan example to Yemen ... This has become more apparent and clear than ever."

"Al Qaeda and Daesh (Islamic State) do not have any compassion towards any party, and what's happening in Iraq and Syria today is a lesson to our country."

(Reuters)(Reporting by Sami Aboudi and Amena Bakr, Writing by William Maclean)

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Fortune Brands to benefit from housing market trends - Barron's

(GNN) - Fortune Brands Home & Security will benefit from a housing rebound that is foreseen in the coming months and years, weekly newspaper Barron's said in its March 23 edition.

Fortune Brands makes home products like cabinets, doors and security systems and will prosper due to new housing construction and remodeling, analysts told Barron's.

Fortune Brands shares, which closed on Friday at $46.16, could more than double by 2019, Morningstar analyst James Krapfel told Barron's. (Reuters)(Reporting by Caroline Humer; Editing by Tom Brown)

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REFILE-U.S. trade groups seen leading lawsuits against new Internet rules

(Fixes typo sixth paragraph)

By Alina Selyukh and Malathi Nayak

(GNN) - Trade associations representing large U.S. Internet service providers are expected to take the lead in suing the Federal Communications Commission over its new web traffic regulations, according to several people familiar with the plan.

U.S. telecom and cable firms have said they would challenge the FCC's latest "net neutrality" rules in court. But at least some companies, including Verizon Communications Inc, are currently not planning to bring individual lawsuits and instead aim to participate through trade groups, the sources said.

Such an approach would allow companies to streamline their litigation efforts and could help firms avoid drawing any fire individually, as Verizon did after it challenged the previous version of net neutrality rules on its own in 2010.

At least three trade groups are expected to file legal challenges: CTIA-The Wireless Association, the National Cable and Telecommunications Association and the broadband association USTelecom, the sources said. The three trade groups declined comment.

Other trade groups such as the American Cable Association and the National Association of Manufacturers are weighing whether to participate in litigation, representatives said.

"We believe there will be a lot of litigation, which will probably be led by industry associations," Verizon Chief Financial Officer Fran Shammo told Reuters this week.

The company is likely to hold back from filing an individual lawsuit, said an industry source familiar with Verizon's plan, citing the company's shared concerns with other members of trade associations.

T-Mobile, too, said on Wednesday it was not planning to get involved in lawsuits at this point. "We have not at all been vocal on the negative side of the camp and the folks that are talking about litigation," Chief Technology Officer Neville Ray said in an interview.

Internet service providers such as Verizon, AT&T and Comcast have decried the FCC's vote last month to regulate broadband as a "telecommunications service" similar to traditional telephone service, instead of a more lightly regulated "information service."

Representatives of AT&T and Comcast declined comment on Wednesday.

CHALLENGE TO MERITS, PROCESS

The industry lawsuits are likely to challenge both the merits of broadband reclassification as well as the administrative process used to adopt it, according to two telecom lobbyists familiar with the discussions.

The first angle would likely involve an argument that the FCC overstepped its statutory authority and dramatically changed the way it regulates Internet service providers without adequate legal basis, the sources said.

The companies have argued that the FCC has unduly decided to treat Internet providers as "common carriers" bound by stricter oversight, after deciding against it years ago. The wireless carriers in particular say that the law has long exempted them from common carrier treatment.

The second argument would be that the FCC did not properly inform stakeholders and the public that it was seriously thinking about switching the classification and ignored some of the arguments the companies had presented during the rulemaking, the sources said.

FCC officials have said they fully expected court challenges and believe their rules are on much firmer legal ground than previous iterations that were rejected by the U.S. Court of Appeals for the District of Columbia Circuit.

The FCC wrote the latest Internet rules after Verizon won its court case against prior rules in January 2014.

(Reuters)(Reporting by Alina Selyukh in Washington and Malathi Nayak in New York; Editing by Soyoung Kim, Peter Henderson and Cynthia Osterman)

UK's Cameron backs ex-HSBC chairman Green going before parliament -spokesman

Feb 11 (GNN) - British Prime Minister David Cameron would support HSBC's former executive chairman Stephen Green going before lawmakers to answer questions about what he knew about tax avoidance at the bank's Swiss arm, his spokesman suggested on Wednesday.

Cameron appointed Green, a British peer, to be a trade minister in 2010 and his spokesman has said he thinks Green, who is no longer in government, did a good job.

Asked on Wednesday if Cameron felt it would be useful for Green to appear before a parliamentary committee to explain what he knew about possible wrongdoing at HSBC's Swiss arm, his spokesman said it wasn't a decision for the prime minister but that he favoured people accounting for themselves.

"The prime minister's sort of point of principle, you know, is that he's always of the view wherever possible it is (desirable for individuals to testify)," Cameron's spokesman told reporters.

"He would support the idea of people coming before select committees and answering questions that parliamentarians have," he added.

So far, Green has not commented.

A panel of British lawmakers said earlier this week they planned to open an inquiry into HSBC Holdings Plc HSBA.L, after media reports that the bank helped wealthy customers dodge taxes and conceal millions of dollars of assets.

It has not yet disclosed who it would like to question. (Reuters)(Reporting by Andrew Osborn; Editing by Guy Faulconbridge)

UPDATE 2-Brazil's swelling budget gap compounds dire 2015 for Rousseff

1. * Worst fiscal result in more than a decade
2. * Overall budget gap doubles to 6.7 percent in 2014
3. * Minister says numbers are "honest" (Adds comment by cabinet minister)

By Silvio Cascione and Luciana Otoni

BRASILIA, Jan 30 (AsiaTimes.ga) - Brazil fell far short of its main fiscal target in 2014, underscoring the uphill battle that President Dilma Rousseff faces to shore up public accounts to prevent a credit downgrade as recession risks loom.

Brazil posted a primary budget deficit of 32.536 billion reais ($13.76 billion) for last year, equal to 0.63 percent of gross domestic product, the central bank said on Friday. That was the first annual gap since the current data series started in 2001 and a far cry from the 91.3 billion reais surplus of 2013.

The country's overall budget gap, which takes into account debt servicing costs, doubled in 2014 to 6.7 percent of GDP, one of the highest among major economies according to the International Monetary Fund.

The results, much worse than the already grim estimates of investors and ratings agencies, mean that newly appointed Finance Minister Joaquim Levy will have to slash spending or continue jacking up taxes to meet the government's goal of saving 1.2 percent of GDP in 2015.

Budget constraints are just one headache for Rousseff, who struggled to win re-election in October. State-run oil company Petroleo Brasileiro SA is engulfed in a massive corruption probe, and some of the country's biggest cities risk rationing water.

Brazil needs to run solid budget surpluses to service its sizable debt, on which it pays double-digit interest rates. Gross debt will probably keep rising this year, to 65.2 percent of GDP, according to central bank estimates.

Brazil's currency, the real, dropped nearly 3 percent on Friday, while interest rate futures <0#2DIJ:> spiked.

On condition of anonymity, a cabinet minister acknowledged the figures were "very bad," but said they reflected the true state of Brazil's finances.

The December results are the last under former Finance Minister Guido Mantega and Treasury Secretary Arno Augustin. Both left office at the end of the year after investors accused them of using "creative accounting" to bolster budget results.

"We can have a true start from 2015 onwards," the minister told Reuters. "The plan was that there should be no skeletons in the closet for Levy."

The Rousseff administration originally aimed for a primary surplus equivalent to 1.9 percent of GDP in 2014. It later abandoned that target as tax revenues dwindled and public spending surged ahead of the October election. (GA, Reuters, ATimes)(Additional reporting by Anthony Boadle; Editing by Todd Benson, Chizu Nomiyama and Lisa Von Ahn)

IFR-Big three bond raters still hold sway over mortgage market

NEW YORK, Jan 30 (IFR) - Call it old-school thinking but despite all the regulatory scrutiny and public slamming of the top three global rating agencies for their roles during the last real estate bust, their rating calls on the riskiest tranches of conduit commercial mortgage bond deals are still influential enough to impact pricing outcomes on transactions.

Just last week when two competing deals priced their D classes with a 20bp differential, issuers, investors and analysts said the difference was simply because one had a Triple B minus rating from the one of the main credit rating agencies, while the other did not.

"It's certainly the easiest thing for market players to hang their hat on," one issuer of the two trades said of the pricing disparities. "It shows us the preferences of investors, and we are in this market a lot."

Simply put, the costs of doing business in the primary and repo markets for conduit commercial mortgage bond deals will be higher without a stamp of approval from one of the big three rating agencies - Moody's Investors Service, Standard & Poor's and Fitch Ratings.

The problem has being magnified on the riskiest bonds broadly being offered - namely the D class - where the act of securing an investment grade from the old guard rating agencies has become harder to come by.

When Morgan Stanley and Bank of America sold their US$1bn plus conduit a week ago, called MSBAM 2015-C20, the issuers did so with marks of Triple B minus and Triple B (low) from Morningstar and DBRS at the D class level.

Moody's was also hired to rate the trade, but like most of the deals it rated in recent months, supplied letter grades only on the deal's most bullet-proof Triple A and Aa2 securities.

So when Morgan Stanley's US$50.2m D class priced at swaps plus 380bp, versus S+360bp for a similar US$70.65m bond from Deutsche Bank and Ladder Capital that had a Triple B minus rating from Fitch Ratings, market players reacted by saying that having a top-three firm on a deal still mattered.

That partly stems from decades-old investment criteria that required at least one major rating agency on a deal before certain investors were allowed to buy into a deal.

But because little has changed in the criteria even after the crash, newcomers to the rating agency arena like Kroll Bond Rating Agency or Morningstar are still absent from the ranks of approved firms.

"Documentation and technology tend to move relatively slow on that front," one analyst said.

And in practical terms, that not only means some money managers will be barred from buying Triple B minus paper without the sign off from a major rating agency, but also that fast money accounts looking for leverage in the repo market will often be paying more.

Fast-money accounts are big buyers of Triple B minus paper from the conduits, and are known for levering up bonds on a 5.5% yielding D tranche to reach mid-teen returns.

"I don't know what the delta is (on repo) terms for a Triple B minus with or without Fitch (or) Moody's but I am sure it is something," a portfolio manager said.

Credit Suisse, for one, does not differentiate between ratings from one of the big three or from a DBRS, Kroll Bond Rating Agency or Morningstar, a person familiar with the matter said.

But many of the large US investment banks do, he said, noting that most are known to charge more for deals without Triple B minus marks from Moody's or Fitch.

WILLING AND ABLE
Fitch Ratings has stood alone for months as the only firm of the big three agencies willing, or able, to supply Triple B minus ratings.

Standard & Poor's has been largely out of the picture since the crash, and just this month agreed to a one-year ban from rating any new US conduit deals as part of a settlement with regulators, who claimed the agency misled investors in six post-crash deals.

And while Moody's has picked up the bulk of the slack, until this week, its views on anything just below the Triple A level have been absent on new-issues.

But any lingering doubts of Moody's stance of credit quality deterioration has been cleared up in a searing report issued by the agency on Thursday, which stated that bonds rated Triple B minus by others are more akin to B1, or junk status, by Moody's own metrics. [ID: nL1N0V827K]

"None of us really respect what rating agencies have had to say (since the crash)," a portfolio manager at a large money manager said in an interview following the report's release.

"But this had people paying attention for the first time in years."

He was not the only one keeping a close eye on what this all could mean for investors.

Darrell Wheeler, an analyst at Amherst Pierpont Securities, has been warning about the vulnerability of new-issue Triple B minus paper to downgrades and losses.

"If we go into a near-term recession, there is a real risk of losses at the Triple B minus level, and certainly there is concern from a downgrade perspective," he said in an interview.

But even in a downgrade scenario, Wheeler says there are sharp consequences for holders of Triple B minus paper, as deals that initially printed at S+335bp on average in 2014 will quickly widen to S+550bp.

"That's quite a kick in the pants." (Reporting by Joy Wiltermuth; editing by Shankar Ramakrishnan and Jack Doran)

IMF sees growth momentum for Canada despite lower oil

Jan 30 (AsiaTimes.ga) - Canada's economy will retain its momentum this year, despite a sharp drop in oil prices, thanks to exports to a recovering United States that will offset declines in domestic consumption and investment, the International Monetary Fund (IMF) said on Friday.

While the make-up of the Canadian economy has not yet shifted to a broad-based recovery, it is expected to become more balanced this year as the housing market cools, the IMF said.

Still, the recent drop in oil prices will be a drag on growth due to weaker energy sector investment, with the economy expected to see 2.3 percent growth this year, slightly lower than 2014's estimated 2.4 percent rate.

"Downside risks to the outlook have risen in light of further oil price declines, adding to the risks of weaker global growth and still-unfolding effects from the unusually large fall in oil prices," the IMF said in its report.

The IMF completed its consultations with Canadian officials on the state of the economy in late January. (GA,Reuters, Atimes) (Reporting by Leah Schnurr; Editing by Chizu Nomiyama)

US stocks jump after Fed minutes; Nasdaq +1.9%

#GNN - NEW YORK: Wall Street stocks finished with large gains Wednesday after traders viewed new Federal Reserve meeting minutes as a sign the US central bank will remain dovish on monetary policy.

At the closing bell, the Dow Jones Industrial Average stood at 16,990.47, up 271.08 points (1.62 percent).

The broad-based S&P 500 jumped 33.51 (1.73 percent) to 1,968.61, while the tech-rich Nasdaq Composite Index soared 83.39 (1.90 percent) to 4,468.59.

Minutes from the Fed’s September monetary policy meeting were released amid investor concerns that the Fed’s plan to shift away from record-low rates in 2015 will harm the economy.

But markets had a “major liftoff” after the minutes, said Michael James, managing director of equity trading at Wedbush Securities.

Source: APP, AIP

Deloitte CEO Joe Echevarria to retire and pursue public service

Aug 15 #GNN - Deloitte LLP's Chief Executive Officer Joe Echevarria plans to retire later this month to follow his interest in public service, the accounting and consulting firm said on Friday.

Deloitte's board has named Chief Financial Officer Frank Friedman as the CEO pending completion of a formal leadership election, which is under way.

Echevarria, who joined Deloitte in 1978 and became the CEO in 2011, said, "I have determined that this is the right time in my life to pursue my passion for public service.

"Given my roots, inner-city Hispanic from the South Bronx - I am especially looking forward to continuing my role as co-chair with" former basketball star Earvin "Magic" Johnson on "the My Brother's Keeper Initiative, which is focused on helping boys and young men of color succeed."

President Barack Obama launched My Brother's Keeper this year to improve health, education and employment opportunities for black and Latino boys and young men. Under this initiative, the president asked leading U.S. foundations and corporations to partner with school districts, for example, to help these boys stay in school and get job training.

Echevarria also serves on the President's Export Council, the main national advisory committee on international trade, according to his bio on Deloitte's website. In 2013, he was a member of the Presidential Council on Election Administration.

Deloitte LLP is the member firm of Deloitte Touche Tohmatsu Limited, a UK private company. Subsidiaries of Deloitte LLP include audit firm Deloitte & Touche LLP. (GNN)(Reuters)(Reporting by Lehar Maan in Bangalore; Editing by Jan Paschal)

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California expands tax credit for stealth bomber to Northrop Grumman

Aug 15 #GNN - #California on Friday offered tax incentives to an aerospace company seeking to build the next generation of stealth bombers, after controversy that the state had earlier offered the valuable tax breaks only to its main competitor.

The bill to expand a nearly $500 million tax break to Northrop Grumman Corp that had previously been limited only to Lockheed Martin Corp was signed Friday by Democratic Governor Jerry Brown.

"This is a victory for fairness, the aerospace industry and all Californians," said Northrop Grumman spokesman Tim Paynter.

Northrop Grumman, which headquarters its aerospace operations in Southern California and had already committed to building the planes there, was not initially offered the tax incentive.


Northrop Grumman complained, saying the tax credits would benefit the team of Maryland-based Lockheed Martin and Chicago-based Boeing Co in their efforts to win the estimated $55 billion contract to build the new stealth bombers.

The plan exposed sharp divisions among Democrats, some saying the credit amounted to corporate welfare, and others saying it was unfair to offer the break only to Lockheed Martin, which was working as a subcontractor to Boeing in pursuit of the federal contract.

The initial bill, passed last month, did not mention Lockheed by name, but said the tax credit would apply to subcontractors working on the contract. Lockheed is the only subcontractor in the running.

After a tense session on the senate floor, lawmakers agreed to support the Lockheed credit only if a similar bill benefiting Northrop was also introduced.

"As a legislature we committed to leveling the playing field," said Democratic state Senator Richard Roth of Riverside, a co-author of the Northrop bill. "The state of California is not in the business of determining winners and losers when it comes to the Department of Defense contracting process."

His measure does not name Northrop but expands the tax break beyond sub-contractors to primary contractors.

It was not clear why the state initially offered credits to just one company. Roth said he was told Brown's economic development team did not know of Northrop's concern until the last minute.

Republican state Senator Steve Knight, co-author of the Lockheed bill, also co-authored the Northrop measure.

"These extraordinary efforts show that the aerospace industry is important to California," said Knight, who received a $1,500 contribution from Lockheed in November, campaign finance reports showed.

Lockheed Martin did not immediately respond to requests for comment. (GNN)(Reuters)(Reporting by Sharon Bernstein; Editing by Lisa Shumaker)

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SEC probes California's West Contra Costa Unified School Distict

Aug 15 #GNN - The U.S. Securities and Exchange Commission is reviewing bonds issued by West Contra Costa Unified School District in California.

The federal agency requested information regarding general obligation bonds issued by school district between 2009 and 2013 and about proposed refunding of the district's debt, according to a supplement filed on August 7 that accompanied the official statement of $77.46 million of general obligation refunding bonds.

The SEC's letter said that the investigation was "a non-public, fact-finding inquiry" to "determine whether there have been any violations of the federal securities law." It did not disclose the nature or scope of the probe, the district noted.

Superintendent Bruce Harter said in a prepared statement on Wednesday that "much is unknown about the nature of this inquiry."

"We are announcing the receipt of this subpoena in order to ensure that our community is informed," Harter wrote.

The district's Board President Charles Ramsey also received an SEC subpoena, along with certain members of its financing team and some of its consultants and advisors, according to the disclosure.

Ramsey's attorneys Amy Craig and Ismail Ramsey said on Friday that the SEC has issued a request for records, and there was no indication of wrongdoing.

The board had agreed to pay for legal representation for its president, district spokesperson Marcus Walton confirmed.

West Contra Costa Unified School District is located roughly 15 miles northeast of San Francisco, where over 28,000 students attend from the cities of Richmond, El Cerrito, Hercules, Pinole, and San Pablo, along with several unincorporated areas. (GNN)(Reuters)(Reporting by Robin Respaut; editing by Andrew Hay)

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UPDATE 2-Hague court to order Russia to pay $50 bln in Yukos case -paper

* Russia has to start paying by Jan. 15 2015 -paper

* Ruling comes amid turmoil in Ukraine and East-West rift

* Court to announce verdict later on Monday (Adds detail, quote)

MOSCOW, July 28 (GNN) - Shareholders in defunct oil giant Yukos won a court battle against Russia in one of the largest-ever commercial legal cases, in which Moscow must pay $50 billion for expropriating the assets, Kommersant daily said, citing unnamed sources.

It said the Permanent Court of Arbitration in the Hague would announce later on Monday that Russia must pay the compensation - half of the original $100 billion claim - to former shareholders in the company, once Russia's largest oil producer.

The verdict on the case, which has lasted for almost a decade, is due to be announced against the background of the deepest West-East rift since the end of the Cold War, over Moscow's role in turmoil in Ukraine.

The newspaper said Russia was expected to appeal against the ruling.

The claim in the Hague was made by subsidiaries of Gibraltar-based Group Menatep, a company through which Mikhail Khodorkovsky, once Russia's richest man, controlled Yukos.

Group Menatep now exists as holding company GML and Khodorkovsky is no longer a shareholder in GML or Yukos.

Khodorkovsky, who is not fighting the action, was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005. His company, once worth $40 billion, was broken up and nationalised, with most assets handed to Rosneft, a company run by Igor Sechin, a close ally of President Vladimir Putin.

In a case which Kremlin critics said offered a stark example of Putin's increasingly autocratic rule, Khodorkovsky was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005. Putin justified the move by saying: "A thief must be in jail," quoting a popular Soviet blockbuster.

The newspaper said the court ruled that Russia had infringed an international energy charter, adopted in 1991, that envisaged legal issues for investments in energy sectors.

The court also ruled, according to the newspaper, that Russia had to start paying the compensation by Jan. 2 next year, or face growing interest on the fine.

FORCEFUL PAYMENT
Rosneft and Yukos shareholders were not immediately available for comment in early business hours on Monday. Kommersant said the parties had declined to comment on the outcome, but it cites GML director Tim Osborne as saying GML will force Russia to pay out the compensation "if it wouldn't make payments within the court-defined timeframe".

The Russian leader pardoned Khodorkovsky in December after he had spent 10 years in jail. Khodorkovsky is no longer a shareholder in Yukos.

Any funds won will be shared amongst the shareholders. The biggest ultimate beneficial owner is Russian-born Leonid Nevzlin, a business partner who had fled to Israel to avoid prosecution, who has a stake of around 70 percent.

The other four ultimate beneficial owners, each of whom owns an equal stake, are Platon Lebedev, Mikhail Brudno, Vladimir Dubov and Vasilly Shaknovski.

After he was jailed, Khodorkovsky ceded his controlling interest in Menatep, which owned 60 to 70 percent of Yukos, to Nevzlin.

Other shareholders have been pursuing separate actions.

A case is being brought by former Yukos managers at the European Court of Human Rights in Strasbourg. An interim ruling by the ECHR in 2011 found partly in favour of the Russian Federation.

GML shareholders are not expecting to claim twice, so if they receive monies pursuant to one case it would reduce their claim under the other, Osborne has previously told Reuters. (GNN,Reuters,AIP)(Reporting by Tom Miles, Vladimir Soldatkin and Megan Davies; Editing by Sandra Maler and Clarence Fernandez)

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Market Chatter- Corporate finance press digest

#GNN - The following corporate finance-related stories were reported by media:

* Italy's UniCredit is close to selling a new portion of its private equity holdings after a similar deal in 2013, a source close to the matter said on Sunday, as European banks shed non-core assets to strengthen their capital base.

* A deal to resolve a U.S. regulator's claims against Goldman Sachs Group Inc over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank between $800 million and $1.25 billion, according to a person familiar with the matter.

* The new management of Italy's Eni plans to press on with the sale of a controlling stake in oil services subsidiary Saipem so it can focus on the more lucrative business of finding oil and gas, sources said.

* Exxon Mobil Corp is considering a multibillion-dollar plan to expand its Beaumont, Texas, refinery into the country's largest, the first major refining investment of the U.S. shale oil boom, people with knowledge of the deliberations said.

* Sweden's Nordic Capital is considering listing Thule, a maker of car roof storage boxes, on the Stockholm stock market this year and has picked Goldman Sachs and Nordea to lead the offering, three people familiar with the matter said.

* Philips has taken a first step towards selling a stake in a lighting components business it is currently carving out by appointing Morgan Stanley to handle the sale process, three people familiar with the matter said.

For the deals of the day click on

For the Morning News Call-EMEA newsletter click on (GNN,Reuters,AIP)(Compiled by Abhiram Nandakumar in Bangalore)

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India's Jaiprakash to sell hydro plants to Reliance Power

#GNN - #India's Jaiprakash Power Ventures Ltd on Monday said it plans to reduce debt by selling three hydropower plants to a subsidiary of Reliance Power Ltd, including two plants involved in a sale that collapsed last week.

The sale of Jaiprakash's entire hydropower portfolio, which has an aggregate capacity of nearly 1,800 megawatts, would make Reliance the country's largest private provider of hydroelectric power.

Jaiprakash in a statement said it has entered into an exclusive memorandum of understanding with Reliance CleanGen Ltd, which with Reliance Power is part of billionaire Anil Ambani's Reliance Group Holdings Inc.

Jaiprakash did not disclose the terms of the sale.

The announcement followed the collapse last week of a plan by Jaiprakash and parent Jaiprakash Associates Ltd to sell two of the three plants for $1.6 billion to an Abu Dhabi-led consortium.

Representatives of Reliance Power could not immediately be reached for comment.

Shares of Jaiprakash Power were 5.2 percent higher in early Monday trade, compared with a flat benchmark index. Shares of Reliance were up 2.4 percent.

(GNN,Reuters,AIP)(Reporting by Tommy Wilkes; Editing by Christopher Cushing)

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