JGBs fall on BOJ rate view, short covering stalls

(Reuters) - Futures initially pulled further away from a seven-year low
as the market followed a gain in U.S. Treasuries, only to run
into selling by domestic banks, market participants said.




"A Treasury-led rise in early trade had its limitation as the
market continues to expect the BOJ to boost interest rates in
coming months," a senior trader at a European brokerage said.


Read more at Reuters.com Bonds News

Yen slides to record low against the euro

(Reuters) - The yen hit a record low versus the euro on Tuesday and was stuck near a 4-1/2-year trough against the dollar as investors kept favouring carry trades funded with the low-yielding Japanese currency. The yen has fallen across the board since Bank of Japan Governor Toshihiko Fukui said late last week he had no preconceived ideas about a future rate rise, dousing expectations of a rate increase in July.

Most market players are looking for the BOJ to raise rates to a 12-year high of 0.75 percent in August, but such a move is not expected to dull the allure of carry trades -- borrowing cheap funds in the yen to buy higher-yielding currencies.


Read more at Reuters Africa

Housing Starts in U.S. Probably Fell in May, Prolonging Slump, Survey Says

(Bloomberg) -- Housing starts in the U.S. probably
fell in May, signaling the slump in home construction will
continue to depress growth, economists said before a government
report today.

Builders broke ground on new houses at an annual rate of
1.473 million in May, down 3.6 percent from 1.528 million the
prior month, according to the median forecast of 68 economists
surveyed by Bloomberg News. Building permits probably rose to
1.47 million from a nine-year low 1.457 million in April.


Read more at Bloomberg Bonds News

Philips to buy Color Kinetics for 592 mln euros

(Reuters) - Philips is the world's biggest lighting maker, a top three
hospital equipment maker and Europe's biggest consumer
electronics producer.




Read more at Reuters.com Mergers News

Raines Says Fannie Mae Regulator Hides Details in Accounting Investigation

(Bloomberg) -- Franklin Raines, ousted as chief
executive officer of Fannie Mae in 2004, said regulators are
withholding documents that may show a deliberate attempt to drive
down the company's stock price.

The Office of Federal Housing Enterprise Oversight
``continues to guard jealously against the disclosure of
information,'' Raines said in a filing yesterday with the U.S.
District Court in Washington. Ofheo is denying access
``presumably for fear that the integrity of its own public
statements will be called into serious question,'' the filing
said.


Read more at Bloomberg Bonds News

Bernanke, Trichet Turn to BIS as Investors Ignore Warnings on Global Risk

(Bloomberg) -- Six decades ago, the U.S. Treasury
wanted to shut down the Bank for International Settlements,
saying it helped finance the Nazis. Today, Jean-Claude Trichet
and Ben S. Bernanke are transforming the organization into one
of the world's most powerful networking clubs.

With hedge funds and private equity firms pumping record
sums of money around the world economy, central bankers fret
that investors are taking on too much risk. As a result, the
bankers are increasingly turning to the Basel, Switzerland-based
BIS, the oldest international financial institution, for
research and advice, and to coordinate damage-control plans.


Read more at Bloomberg Bonds News

ICI's Cloudy Future, Alwaleed Losses, `Return of Vol': Timshel by Wilson

(Bloomberg) -- Imperial Chemical Industries Plc's
future is no clearer now that Akzo Nobel NV has begun a much-
anticipated takeover attempt.

ICI, the maker of Dulux and Glidden paints, closed 5.8
percent higher yesterday than Akzo's proposed price of 600 pence
a share. The rally showed investors agreed with the London-based
company's conclusion that the 7.2 billion pound ($14.3 billion)
offer was too low.


Read more at Bloomberg Stocks News

PRESS DIGEST - British business - June 19

(Reuters) - Alain Levy, the French head of music at EMI , who was
sacked in January following the latest in a string of profit
warnings by the company, received a 1.12 million pound bonus
last year as part of a total remuneration package of 4.6 million
pounds. EMI said that under the terms of his contract, Levy was
entitled to both a bonus and a pay-off "in the event of his
termination without cause ". He is
also entitled to continue to receive retirement benefits and
other benefits in kind for a year after his sacking.




RUMOUR OF THE DAY


Read more at Reuters.com Mergers News

China's Airlines Made Profit in May as Econonic Growth Spurs Travel Demand

(Bloomberg) -- China Southern Airlines Co., the
nation's largest airline, and all other Chinese domestic
carriers posted a profit last month, as economic growth boosted
demand for traveling and air cargo transport.

Combined sales of Chinese carriers rose 11 percent to 21.1
billion yuan ($2.77 billion) in May from a year earlier,
exceeding costs of 19.9 billion yuan, the General Administration
of Civil Aviation said on its Web site last night.


Read more at Bloomberg Emerging Markets News

Asian Stocks Slide From Record High, Led by Nissan; BHP Drops on Metals

(Bloomberg) -- Asian stocks fell, dragging a
regional benchmark from a record high, after confidence in the
U.S. homebuilding industry dropped to a 16-year low and metals
prices declined.

Nissan Motor Co. and James Hardie Industries NV led a drop
among companies that rely on U.S. sales on speculation spending
in the world's largest economy will wane. BHP Billiton Ltd., the
world's largest mining company, ended a three-day climb, while
energy stocks including Inpex Holdings Inc. advanced after crude-
oil prices rose to the highest in nine months.


Read more at Bloomberg Stocks News

Bank of Montreal plans C$1.2 billion debt issue

(Reuters) - Interest is payable semi-annually at 5.20 percent until
June 21, 2012, and at a floating rate equal to the rate on
three-month Bankers' Acceptances plus 1 percent, paid quarterly
thereafter to maturity.




The issue, which is expected to close on June 21, will add
to the bank's Tier 2 capital base, BMO said.


Read more at Reuters.com Bonds News

Valero Shuts Unit at Its McKee Refinery in Texas for `Unplanned' Repairs

(Bloomberg) -- Valero Energy Corp., the largest
U.S. refiner, said it shut the fluid catalytic cracking unit at
its McKee refinery near Sunray, Texas, for ``unplanned
maintenance.''

The shutdown will have ``no material impact on
production,'' Valero spokesman Bill Day said in an e-mailed
statement.


Read more at Bloomberg Energy News

New Zealand Dollar Near 20-Year High Versus Yen on Appeal of Higher Yields

(Bloomberg) -- New Zealand's dollar traded near the
strongest in almost 20 years against the yen as investors were
attracted to returns from the nation's higher yields.

The currency has gained 31 percent against the yen in the
past 12 months, buoyed by so-called carry trades where investors
borrow yen at lower interest rates to buy higher-yielding assets
elsewhere. The Bank of Japan kept its benchmark rate at 0.5
percent last week, the lowest among major economies and 7.5
percentage points below New Zealand's key rate.


Read more at Bloomberg Currencies News

UPDATE 1-Progressive to sell $1 bln of subordinated debt

(Reuters) - The fixed-to-floating rate junior subordinated debentures due
2007 were priced at 99.729 percent of par.




Goldman, Sachs & Co. is the sole structuring
coordinator for the offering.


Read more at Reuters.com Bonds News

UPDATE 1-Epix says no immediate FDA approval for imaging agent

(Reuters) - Epix shares rose nearly 20 percent to $6.99 in late
electronic trade after closing at $5.84 on the Nasdaq.




Blood pool agents help clinicians to light up a patient's
arteries to facilitate magnetic resonance imaging.


Read more at Reuters.com Government Filings News

US STOCKS-Wall Street droops as oil tops $69 a barrel

(Reuters) - NEW YORK, June 18 - U.S. stocks slipped on Monday
as oil climbed notched a 10-month high while nearing $70 a
barrel, taking a toll on energy-dependent sectors, while more
worrisome data from the housing sector weighed on home
builders.




Adding to the wary mood, The Wall Street Journal said
Merrill Lynch & Co. took control of $400 million of
loan assets underlying a troubled hedge fund at Bear Stearns
Cos. Inc. Merrill was a chief lender to the fund, which
was heavily invested in subprime loans.


Read more at Reuters.com Market News

Yen Trades Near Record Low Versus Euro on BOJ Interest Rate, Carry Trade

(Bloomberg) -- The yen traded near a record low
against the euro on speculation the Bank of Japan will refrain
from accelerating interest-rate increases this year, prompting
investors to buy higher-yielding assets funded by loans in Japan.

Japan's currency sank to the weakest in more than four years
versus the dollar yesterday and a 15-year low versus the British
pound as the nation's lowest interest rates among major economies
encouraged the so-called carry trades. The yen has weakened
versus all 16 most-active currencies since the start of the year.


Read more at Bloomberg Currencies News

RPT-TREASURIES-Bonds rise, supported by housing weakness

(Reuters) - By John Parry




NEW YORK, June 18 - U.S. government debt prices
rose on Monday posting a second straight session of gains for
the first time in a month after surprisingly stark signs of
further deterioration in the housing market.


Read more at Reuters.com Bonds News

Mexico Bolsa Advances on Tax Plan, Led by America Movil: Chile Ipsa Slips

(Bloomberg) -- Mexico's Bolsa index rose for a fourth
day on expectations that President Felipe Calderon has the support
to pass legislation that will boost tax collection and spur
government spending.

``The fact that there's growing consensus that a fiscal reform
is going to be submitted has investors optimistic,'' said analyst
Mauricio Brocado at Actinver SA in Mexico City, after El Economista
reported Calderon will propose a flat 15 percent tax rate and a 2
percent fee on cash deposits in a bill to be presented this week.


Read more at Bloomberg Stocks News

Reuters Summit-UPDATE 1-Blue Nile sees $1 bln sales in 6-7 years

(Reuters) - NEW YORK, June 18 - Online jewelry retailer Blue
Nile expects to reach $1 billion in annual sales in
the next six to seven years, Chief Executive Mark Vadon said on
Monday at the Reuters Consumer and Retail Summit in New York.




Vadon expects 50 percent of sales to come from engagement
rings and 50 percent from non-engagement jewelry in the same
time frame. The U.S. company's sales currently consist of about
70 percent engagement rings, he said on Monday.


Read more at Reuters.com Market News

US STOCKS-Indexes flat as oil pinches, while M&A rolls on

(Reuters) - NEW YORK, June 18 - U.S. stock indexes were
treading water on Monday as oil prices above $69 a barrel took
a toll on energy-dependent sectors and offset some of the
gains from a fresh round of corporate takeovers.




Adding to the wary mood on Wall Street, the Wall Street
Journal reported that Merrill Lynch & Co. had taken
control of $400 million of loan assets underlying a troubled
hedge fund at Bear Stearns Cos. Inc. that was heavily
invested in subprime loans.


Read more at Reuters.com Market News

U.K. Pound Gains Before Bank of England Minutes Back Case for Higher Rate

(Bloomberg) -- The pound rose to the highest in more
than a week against the dollar on speculation the minutes of the
Bank of England's last meeting will reinforce the case for higher
interest rates.

Since the June 7 meeting, Governor Mervyn King and policy
maker Paul Tucker have again expressed concern about inflation,
underpinning expectations of an increase in borrowing costs. The
BOE will release the minutes on June 20. The pound also gained to
near an 11-year high versus the yen, as accelerating house prices
added to the case for higher rates.


Read more at Bloomberg Currencies News

Oil Approaches $70 for First Time in Nine Months on Nigeria Strike Planss

(Bloomberg) -- Crude oil in New York approached $70
a barrel for first time since September after Nigerian unions
planned a strike this week, threatening supplies from Africa's
biggest oil producer.

Oil production is likely to be affected during the strike as
Nigeria's two main oil unions plan to participate, a labor leader
said. Nigeria produces low-sulfur, or sweet, crude oil, prized by
U.S. refiners because of the high proportion of gasoline it
yields. New York oil reached a record $78.40 a barrel on July 14
on concern that Middle East unrest would cut oil shipments.


Read more at Bloomberg Energy News

Cephalon wins U.S. approval for Nuvigil sleep drug

(Reuters) - BOSTON, June 18 - After multiple stops and starts, biotechnology company Cephalon Inc. has won U.S. approval for its drug to treat excessive sleepiness in patients with conditions such as obstructive sleep apnea.



The Frazer, Pennsylvania-based company said on Monday that the U.S. Food and Drug Administration approved the drug, Nuvigil, to treat overwhelming sleepiness associated with sleep apnea, narcolepsy and shift work.


Read more at Reuters.com Government Filings News

U.S. home builder index extends slide in June: NAHB

(Reuters) - Economists had predicted the index would be unchanged from May's 30 reading, based on a Reuters survey. Readings below 50 mean more builders view market conditions as poor rather than favorable.




"It's clear that the crisis in the subprime sector has prompted tighter lending standards in much of the mortgage market, and interest rates on prime-quality home mortgages have moved up considerably during the past month along with long-term Treasury rates," said NAHB Chief Economist David Seiders.


Read more at Reuters.com Business News

Trump Entertainment CEO departs

(Reuters) - But the Star-Ledger reported that Perry was fired amid controversy about narrowing the list of potential bidders. The New Jersey paper said Perry was the lone dissenter in a board vote to enter negotiations with a group led by former casino executive Dennis Gomes.




Trump Entertainment wasn't immediately available for comment.


Read more at Reuters.com Mergers News

Oil Rises to Nine-Month High After Workers in Nigeria Threaten to Strike

(Bloomberg) -- Crude oil rose to a nine-month high
after a coalition of labor unions in Nigeria, Africa's biggest
oil producer, threatened to strike this week.

Oil production is also likely to be affected during the
strike as Nigeria's two main oil unions plan to participate, said
Lumumba Okugbawa, deputy general secretary of the Petroleum &
Natural Gas Senior Staff Association of Nigeria, or Pengassan.
Nigeria produces low-sulfur, or sweet, crude oil, prized by U.S.
refiners because of the high proportion of gasoline it yields.


Read more at Bloomberg Commodities News

Buy-out row spoils Arcelor Mittal merger birthday

(Reuters) - Arcelor Mittal says it plans to use the investor day to
inform individual European shareholders about the successful
integration of Mittal Steel and Luxembourg-based Arcelor after
the latter agreed to be bought in June 2006.




However, that merger has not been finalised as minority
shareholders in Arcelor, representing 6 percent of the company,
remain vehemently opposed to the terms of a buy-out.


Read more at Reuters.com Mergers News

Brazil's currency gains on inflows, stocks steady

(Reuters) - The real , strengthened 0.26 percent to 1.907 per
U.S. dollar.




The currency has risen to near six-year highs against the
U.S. dollar and has undermined investment plans by local
manufacturers in machinery and equipment, Luciano Coutinho,
president of Brazil's state development bank BNDES, said on
Monday.


Read more at Reuters.com Bonds News

UPDATE 1-Russia to rule on Kovykta this week- Trutnev

(Reuters) - "In any case I do not think this issue will drag on for
long. I think it will be over during this week. It is a
technical question. All the work has been done," Trutnev was
quoted as telling reporters.




Russia's licensing agency, Rosnedra, which has repeatedly
delayed a decision on whether to strip TNK-BP's Kovykta licence,
said on Monday it would review the early withdrawal of the
licence on June 22.


Read more at Reuters.com Mergers News

Canada's Dollar Falls in Almost 3 Weeks on Speculation of Lower Inflation

(Bloomberg) -- The Canadian dollar fell to an
almost three-week low on speculation inflation may have eased,
reducing the likelihood the Bank of Canada will increase
borrowing costs twice this year.

``There's a bit of concern that the consumer prices may be
weaker than expected,'' said Matthew Strauss, senior currency
strategist at RBC Capital Markets Inc. in Toronto, a unit of
Canada's biggest bank by assets. ``The Canadian dollar may be
topped for the time being.''


Read more at Bloomberg Currencies News

TREASURIES-Bonds dip on profit-taking, mortgage hedging

(Reuters) - Also, dealers were said to be selling Treasuries to lock in
the yields on an expected flood of corporate bonds for sale
this week, according to traders.




Earlier, Treasury bond prices rose on follow-through buying
in the wake of Friday's tame core inflation data. They also
enjoyed safe-haven bids on renewed worries about problems in
subprime mortgages amid reports of heavy selling by a mortgage
hedge fund, analysts said.


Read more at Reuters.com Bonds News

Dollar and yen dips as carry in focus

(Reuters) - The dollar weakened against most major currencies on Monday, tracking a slide in U.S. bond yields, while the yen fell to near 4-1/2 year lows on fading expectations of higher Japanese interest rates.

The greenback extended losses after data on Friday showed underlying consumer price gains were smaller than expected last month. This sparked a bond market rally that pulled U.S. yields down from a five-year peak hit last week and pushed the euro above $1.34 for the first time since early June.


Read more at Reuters Africa

US STOCKS-Wall St set to open higher on deal speculation

(Reuters) - NEW YORK, June 18 - U.S. stocks were poised to
open higher on Monday, boosted by deal news including a report
that BHP Billiton has revived plans for a $40 billion takeover
of aluminum producer Alcoa Inc. .




Shares of Alcoa rose 2.4 percent in trading before the bell
after the Times newspaper in London reported BHP Billiton
Ltd./Plc , the world's biggest mining group,
may bid for the aluminium producer.


Read more at Reuters.com Bonds News

Brazil's Real Climbs on Outlook for Benign Inflation, Faster GDP Growth

(Bloomberg) -- Brazil's real rose to its strongest
since October 2000 on speculation benign inflation and faster
growth will keep luring foreign investment to the local stock and
bond markets.

The real advanced as much as 0.7 percent to 1.8995 per
dollar, the strongest since hitting 1.8990 per dollar on Oct. 31,
2000. It traded at 1.9012 per dollar at 9 a.m. New York time. It
rose 2.4 percent last week and has gained 12.3 percent this year,
making it the best performer among the 16 currencies most traded
against the dollar.


Read more at Bloomberg Currencies News

Cadence Design buyout talks stall over price: paper

(Reuters) - At $6.5 billion, Cadence may be too expensive for the firms, the Times said. The Times first reported interest in Cadence on June 4.




Neither Blackstone, KKR nor Cadence immediately returned calls seeking comment.


Read more at Reuters.com Business News

ACE Aviation Holdings, Agrium, Alcan and Legacy: Canadian Equity Preview

(Bloomberg) -- The following is a list of companies
whose shares may have unusual price changes in Canadian markets
today. This preview includes news that broke after markets closed
June 15. Symbols are in parentheses after company names and prices
are from the last close.

The Standard & Poor's/TSX Composite Index added


Read more at Bloomberg Stocks News

Actelion, Alcoa, Emeritus, Force Protection, Lexicon: U.S. Equity Preview

(Bloomberg) -- The following is a list of companies
whose shares may have unusual price changes on U.S. exchanges
tomorrow. This preview includes news that broke after exchanges
closed two days ago. Stock symbols are in parentheses after
company names. Shares prices are as of 7:30 a.m. New York time.

Actelion Ltd. (ALIOF US) shares rose $1.44, or 3.1 percent,
to $47.89 in regular trading in Germany. A newly approved rival
to its best-selling Tracleer lung treatment may not be as big a
threat as previously thought, some analysts said. Gilead Sciences
Inc. (GILD US) on June 15 won U.S. approval for ambrisentan,
which will compete with Tracleer as a treatment for pulmonary
arterial hypertension, a narrowing of the arteries that causes
shortness of breath and heart failure.


Read more at Bloomberg Stocks News

California, Marathon Oil Deals Lead $10 Billion of U.S. Tax-Exempt Sales

(Bloomberg) -- California and Marathon Oil Corp.
will borrow a total of $3.5 billion in the largest tax-exempt
bond sales this week, leading $10 billion of long-term debt
offerings by U.S. state and local governments.

California, marketing a $2.5 billion general obligation
issue, is first giving individuals the chance to buy the bonds
today and tomorrow. Citigroup Inc. will set prices and rates on
the bonds for institutions such as mutual funds and insurers at
midweek. Marathon Oil is raising $1 billion through a program to
boost Louisiana's economy after Hurricane Katrina devastated
parts of the state. Morgan Stanley is managing the sale.


Read more at Bloomberg Bonds News

Wall St set to extend gains as rate outlook shifts

(Reuters) - U.S. stocks rose for a third straight day on Friday, helping
the Standard & Poor's 500 rack up its best weekly gain in
two months, after a government report showed core consumer
inflation picked up at a slower pace than expected in May.




U.S. interest rate futures <0#ED:> show investors rule out a
rise in U.S. interest rates for at least another two years.


Read more at Reuters.com Bonds News

Bank of England Raises Concern About Lenders Easing Credit Conditions

(Bloomberg) -- The Bank of England said it's
concerned that lenders are easing credit restrictions as financial
companies compete to benefit from the fastest global growth in
more than three decades.

``Lenders reportedly continued to compete aggressively for
business on non-price terms, driving lending standards down
further,'' the U.K. central bank said in its quarterly bulletin
today. As a result of lower standards, the quality of covenants,
loan conditions that give lenders added protection, is also
deteriorating, the bank said.


Read more at Bloomberg Bonds News

German DAX Benchmark Rises for a Fourth Day, Led by Volkswagen, Henkel

(Bloomberg) -- Germany's benchmark DAX Index gained
for a fourth day, led by Volkswagen AG after the carmaker said it
will raise the number of workers in its Auto 5000 plant in
Wolfsburg, Germany. Henkel KGaA and BASF AG also increased.

The DAX added 54.06, or 0.7 percent, to 8084.70 at 9:46 a.m.
in Frankfurt. DAX futures expiring in September climbed 0.8
percent to 8173. The HDAX Index of the country's 110 biggest
companies increased 0.7 percent.


Read more at Bloomberg Stocks News

Kenya's central bank cuts interest rate to 8.5 pct

(Reuters) - Kenya's central bank said on Monday said it had cut its key CBR interest rate to 8.5 percent from 10 percent.

"The Monetary Policy Advisory Committee (MPAC) held its fifteenth meeting on Wednesday ... and advised the CBK (Central Bank of Kenya) to set the CBR at 8.5 percent," a weekly bulletin from the central bank said. "The Central Bank concurred with the recommendation."


Read more at Reuters Africa

Italy, Ericsson, Groupama, Belgium Plan Debt Sales: European Bond Alert

(Bloomberg) -- The following is a list of bond sales
denominated in euros or pounds and expected in the coming days
and weeks.

Investment-Grade Sales


Read more at Bloomberg Bonds News

FTSE Shares Including ICI, Prudential Gain; Vodafone Falls After Report

(Bloomberg) -- U.K. stocks including Imperial
Chemicals Industries Plc rose. The U.K. maker of Dulux and
Glidden paints rejected a 7.2 billion-pound ($14.2 billion) bid
from Akzo Nobel NV of the Netherlands as too low.

Shares of Prudential Plc also advanced. Vodafone Group Plc
fell after gaining for three straight sessions.


Read more at Bloomberg Stocks News

Treasury Bear Market, Worst Since 1999, Muffled by Reserves, Derivatives

(Bloomberg) -- The steepest decline in Treasuries
since 2004 is convincing even the most bullish investors that U.S.
government bonds are now in a bear market.

Bill Gross, the manager of the world's biggest bond fund at
Pacific Investment Management Co., and Dan Fuss, whose Loomis
Sayles Bond Fund has been the best performer among its peers the
last decade, are preparing for higher market rates after yields
on 10-year Treasuries, the benchmark for home mortgages and
corporate borrowing, rose to a five-year high last week.


Read more at Bloomberg Bonds News