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ECB braces for QE as others shift rates

01 Mar

A picture illustration shows Euro banknotes in ZenicaBy Philip Blenkinsop BRUSSELS (Reuters) – Greek funding and quantitative easing in Europe, an expected rate cut in Australia and the buoyant U.S. labor market are set to be the focus of an economic week dominated by a host of central bank meetings. The European Central Bank’s Governing Council convenes in Cyprus on Thursday and may take a decision on whether to accept Greek government bonds as collateral for its direct ECB funding, which it stopped doing at the start of February. If the ECB does not – and it most likely will not – it could be forced to prolong the provision of Emergency Liquidity Assistance (ELA) to the Greek central bank. “The Greek question will be a hot topic,” said ING Chief Eurozone Economist Peter Vanden Houte.

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Warren Buffett says Berkshire has 'right person' as heir

28 Feb

Buffett, Chairman of the Board and CEO of Berkshire Hathaway, poses for a portrait in New YorkWarren Buffett told investors on Saturday that Berkshire Hathaway Inc had found his successor, giving more details than ever about the heir to the company he has run for 50 years. “Both the board and I believe we now have the right person to succeed me as CEO – a successor ready to assume the job the day after I die or step down,” the billionaire, 84, said in his annual letter to Berkshire shareholders. “In certain important respects, this person will do a better job than I am doing,” Buffett added, as Berkshire Hathaway reported a 17 percent drop in fourth-quarter net income, coupled with an improvement in its operating results. In previous annual letters, Buffett has said that Berkshire’s board had been fully aware of his chosen successor but he kept his options open for other possible candidates.

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Jobs report may test market's complacency

28 Feb

A morning commuter carries an umbrella as she passes by the NYSE during a winter storm in New YorkThe U.S. stock market has been quiet this week – too quiet. Wall Street has traded in a tight range of late, with both volatility and trading volumes drying up as the earnings season winds down and Federal Reserve Chair Janet Yellen’s recent Congressional testimony delivered no surprises. About 238,000 jobs are expected to have been added in February, according to the non-farm payroll report that will be released on Friday, down from the 257,000 added in January. “Economic data will be the biggest driver of market moves over the next month, and the key one is the jobs report,” said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Asset Management.

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U.S. economy slows in fourth quarter, but growth outlook still favorable

27 Feb

Freighters and cargo containers sit idle at the Port of Los Angeles as a back-log of over 30 container ships sit anchored outside the Port in Los AngelesBy Lucia Mutikani WASHINGTON (Reuters) – U.S. economic growth braked more sharply than initially thought in the fourth quarter amid a slow pace of stock accumulation by businesses and a wider trade deficit, but the underlying fundamentals remained solid. Gross domestic product expanded at a 2.2 percent annual pace, revised down from the 2.6 percent pace estimated last month, the Commerce Department said on Friday. With consumer spending accelerating at its quickest pace since the first quarter of 2006 and sturdy gains in other measures of domestic demand, the slowdown in growth is likely to be temporary. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised down by one-tenth of a percentage point to a 4.2 percent pace in the fourth quarter, still the fastest since the first quarter of 2006.

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Lower gasoline prices dampen U.S. consumer inflation

26 Feb

Shoppers roam the aisles at the Safeway store in Wheaton MarylandBy Lucia Mutikani WASHINGTON (Reuters) – U.S. consumer prices in January posted their biggest drop since 2008 as gasoline prices continued to tumble and underlying inflation rose modestly, which could allow a cautious Federal Reserve more room to hold off on raising interest rates. Other data on Thursday showed a rebound in business investment spending plans, but probably not enough to change expectations of moderate economic growth in the first quarter. “It will be some time before the Fed gets the necessary confirmation that inflation will move back to target in the medium-term, and we continue to see September as the most natural starting point for the lift-off in rates,” said Millan Mulraine, deputy chief economist at TD Securities in New York. The Labor Department said its Consumer Price Index fell 0.7 percent last month, the largest decline since December 2008, after slipping 0.3 percent in December.

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World stocks stay near all-time high after Fed signals

25 Feb

Traders are pictured at their desks in front of DAX board at Frankfurt stock exchangeBy Marc Jones LONDON (Reuters) – World stocks stayed within reach of an all-time high on Wednesday as investors welcomed comments from Federal Reserve Chair Janet Yellen suggesting that the U.S. central bank is in no rush raise interest rates. Following Wall Street’s gains on Tuesday and more rises in Asia overnight, however, MSCI’s 46-country world index was up 0.1 percent at 433.29 points and straining for the 434.24 all-time peak it scaled in September.

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Wall St little changed with Yellen testimony on deck

24 Feb

Traders work on the floor of the New York Stock ExchangeU.S. stocks were flat shortly after the open on Tuesday, as the Dow and S&P 500 held near record levels before testimony by Federal Reserve Chair Janet Yellen and a flurry of economic data. Yellen will give the central bank’s semi-annual Monetary Policy Report to the Senate Banking Committee at 10 a.m., the first of her two days of testimony. Investors will attempt to parse her commentary for clues on the timing of an interest rate hike in the wake of the dovish Fed minutes released last week. “It’s a classic wait-and-see day,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

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U.S. existing home sales hit nine-month low, supply weak

23 Feb

A real estate sign advertising a home for sale is pictured in Vienna, VirginiaThe National Association of Realtors said on Monday existing home sales declined 4.9 percent to an annual rate of 4.82 million units, the lowest level since April last year. December’s sales pace was revised up to 5.07 million units from a previously reported 5.04 million units.

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Wall St. dips after Dow, S&P touch records; energy drags

23 Feb

Traders work on the floor of the New York Stock ExchangeU.S. stocks edged lower in early trading Monday amid weakness in oil prices, after the Dow and S&P closed at records last week in the wake of a conditional agreement by euro zone finance ministers to extend Greece’s bailout.

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Fed rate rise timing back in the spotlight

22 Feb

U.S. Federal Reserve Chair Janet Yellen holds a news conference at the Federal Reserve in WashingtonGreece’s struggles with its euro zone creditors may have grabbed much of the world’s attention, but U.S. Federal Reserve Chair Janet Yellen is likely to reclaim the spotlight this week with testimony on a long-anticipated shift in policy. If the Fed sticks to mid-year for its first interest rate rise in a decade, it will be perceived as a reflection of the world economy’s growing resilience. U.S. core CPI inflation data due next week will also give some idea of just how much the collapse in oil prices which has tamped down inflation globally will work as a counterweight to the Fed’s apparent comfort so far with higher rates in June.

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