Putin Favors Ruble Speculators Over Oligarchs in Battle Against Inflation

(Bloomberg) -- Russian President Vladimir Putin's plan
to keep inflation from accelerating depends on favoring foreign-
exchange traders over the country's oil and gas companies.

Putin will probably allow the central bank to double the
ruble's pace of appreciation this year because he has few options
outside the foreign exchange market to rein in consumer prices,
according to strategists at Bank of America Corp. and UBS AG.
Russia's 8.5 percent inflation rate is three times faster than
any other Group of Eight country.


Read more at Bloomberg Emerging Markets News

Polish Central Bank Governor Sees No Reason to Increase Interest Rates Now

(Bloomberg) -- The Polish central bank has no need
to raise interest rates because there is currently little threat
from inflation, central bank Governor Slawomir Skrzypek said.

Inflation, wage and industrial output data are likely to
confirm ``there is still no reason to enter a cycle of interest
rate increases,'' Skrzypek said in an interview with daily
Gazeta Prawna, published today.


Read more at Bloomberg Emerging Markets News

Singapore Dollar to Rise 10 Percent to Record $1.38, BNP Paribas Predicts

(Bloomberg) -- The Singapore dollar may rise 10
percent to a record in a year as an influx of tourists and
bankers supports economic growth, BNP Paribas SA said.

The currency may reach S$1.38 per dollar by June 30, passing
the record of S$1.3835 reached in 1995, as the Monetary Authority
of Singapore seeks gains to curb inflation, said Thio Chin Loo,
senior foreign-exchange strategist in Singapore at France's
largest bank by market value.


Read more at Bloomberg Currencies News

Argentina bonds, peso in recovery; stocks slip

(Reuters) - Both the Discount bond in pesos and Bonar VII paper rose
2.1 percent, while the Boden 2014 jumped 2.8 percent in
over-the-counter trade .




Some Argentine bonds shed as much as 20 percent last week
amid a sell-off in emerging market assets due to concerns the
U.S. subprime lending crisis would spread. Argentine bonds were
hit harder than others due to long-standing concerns about
inflation and, to a lesser extent, government spending.


Read more at Reuters.com Bonds News

WRAPUP 1-U.S. core inflation softens in June

(Reuters) - The 0.1 percent rise in the core personal consumption price
index "should be reassuring to the Fed," said Camilla Sutton,
currency strategist at Scotia Capital in Toronto.




U.S. stock index futures rose on the weak inflation data
and a stronger-than-expected earnings report from General
Motors . U.S. government debt prices fell despite the
inflation report, and the dollar was lower against the euro.


Read more at Reuters.com Economic News

India's Central Bank May Keep Benchmark Rate Unchanged as Inflation Slows

(Bloomberg) -- India's central bank will probably
keep its benchmark interest rate unchanged for a second quarter
as slower credit growth helps curb inflation.

Reserve Bank of India Governor Yaga Venugopal Reddy will
leave the overnight lending rate at 7.75 percent, according to
all 19 analysts in a Bloomberg News survey. The quarterly
monetary policy statement is due at noon in Mumbai tomorrow.


Read more at Bloomberg Emerging Markets News

UPDATE 2-Mexico holds rate steady despite higher inflation

(Reuters) - MEXICO CITY, July 27 - Mexico's central bank held
the key overnight interest rate steady at 7.25 percent on
Friday, but warned that it would boost rates if necessary just
days after reporting that inflation had nudged into its danger
zone.




The bank said it sees inflation, which has been stubbornly
trending higher, closing in on its long-term 3 percent target
by the end of 2008 even though food prices are still volatile.


Read more at Reuters.com Bonds News

Gold Falls on Concern Housing Report Signals Slowing Economy; Silver Falls

(Bloomberg) -- Gold fell from a three-month high in
New York on concern U.S. economic growth will slow, reducing
demand for precious metals as a hedge against inflation. Silver
futures also declined.

Purchases of new homes fell 6.6 percent in June, more than
economists predicted, and orders for durable goods unexpectedly
fell for a second month, the Commerce Department said today. Some
investors buy gold to preserve purchasing power in times of
accelerating price increases.


Read more at Bloomberg Commodities News

New Zealand Raises Key Rate to 8.25 Percent, Signals Increase May Be Last

(Bloomberg) -- New Zealand's central bank raised its
benchmark interest rate to a record 8.25 percent, and said its
fourth increase this year may be enough to contain inflation.

``New Zealanders have been showing early signs of moderating
their borrowing,'' Reserve Bank Governor Alan Bollard said in a
statement released in Wellington today. ``Provided they keep this
up, and the pressure on resources continues to ease, we think the
four successive rate increases we have delivered will be sufficient
to contain inflation.''


Read more at Bloomberg Bonds News

Colombia Peso Reaches One-Month High on Speculation Inflation Will Slow

(Bloomberg) -- Colombia's peso strengthened to a
one-month high on investor expectations that inflation will
slow, attracting buyers to the nation's assets.

The peso gained 0.4 percent to 1,910.65 per dollar,
reaching the strongest since June 20, according to the Colombian
foreign-exchange electronic transactions system, known as SET-
FX.


Read more at Bloomberg Currencies News

UPDATE 2-Fed's Moskow says inflation fight not over

(Reuters) - PHILADELPHIA, July 19 - With headline inflation
back on the upswing, the risk of inflation staying too high is
greater than the risk of growth falling too low, Chicago
Federal Reserve President Michael Moskow said on Thursday.




"Though total inflation was trending down late last year,
it is now back on the upswing," Moskow said in remarks prepared
for delivery to a Global Interdependence Center luncheon.


Read more at Reuters.com Bonds News

Bernanke-More data needed to assess inflation climate

(Reuters) - He also said that inflation expectations are imperfectly
anchored. "I think that we have made tremendous progress but
there is still some imperfect degree in terms of which those
expectations are completely tied down," he said.




Read more at Reuters.com Economic News

Euro Gains May Stall at $1.3850 on Barrier Options, Mitsubishi-UFJ Says

(Bloomberg) -- The euro's gains against the dollar
may stall around $1.3850 because of selling to protect options
that would become worthless should the currency rise further,
according to Bank of Tokyo-Mitsubishi UFJ Ltd.

The single European currency yesterday rose to a record high
of $1.3833 after Federal Reserve Chairman Ben S. Bernanke told
U.S. lawmakers the housing market may weigh on economic growth
and inflation may slow.


Read more at Bloomberg Currencies News

China's Yuan Rises to Highest Since End of Link in 2005 as Growth Surges

(Bloomberg) -- The yuan rose to the highest since
the end of a dollar link in July 2005 after a report showed the
economy grew the most in 12 years, adding to speculation China
will seek a stronger currency to curb inflation.

Gains in the yuan may help reduce inflows from export
earnings and keep excess funds from flooding the economy with
cash, spurring lending and investment. Federal Reserve Chairman
Ben S. Bernanke yesterday said China needs a flexible exchange
rate to foster an ``independent monetary policy.''


Read more at Bloomberg Currencies News

Canada's Dollar Drops From 30-Year High After Inflation Declines in June

(Bloomberg) -- Canada's dollar fell from a three-
decade high after a government report showed consumer prices
unexpectedly declined last month, reducing the likelihood of
another increase in borrowing costs by the central bank.

The currency has gained 11 percent this year on a
strengthening economy and higher prices for Canada's commodity
exports including oil. The Bank of Canada raised its benchmark
interest rate to 4.5 percent last week after inflation exceeded
its target of 2 percent.


Read more at Bloomberg Currencies News

Hong Kong Stocks Slide on China Rate Concern; China Mobile, Cnooc Fall

(Bloomberg) -- Hong Kong's Hang Seng Index fell,
having yesterday closed above 23,000 for only the second time,
after a report said China's central bank will step up efforts to
cool the economy. China Mobile Ltd. led the decline.

Mainland reports scheduled for release tomorrow are expected
to show gross domestic product rose at a double-digit pace for a
sixth straight quarter and inflation accelerated to a two-year
high, according to Bloomberg surveys of economists.


Read more at Bloomberg Stocks News

U.S. Stocks Advance, Dow Average Tops 14,000; American Express Shares Gain

(Bloomberg) -- U.S. stocks rose, sending the Dow
Jones Industrial Average past 14,000 for the first time, after
wholesale inflation unexpectedly declined and Goldman, Sachs &
Co. advised buying shares of American Express Co.

American Express, the fourth-biggest U.S. credit-card
issuer, led the Dow average to a fourth-straight record. Rohm &
Haas Co., the largest maker of acrylics for paints and plastics,
pushed a gauge of raw-materials producers to the steepest gain
in the Standard & Poor's 500 Index on its plan for a $2 billion
share buyback.


Read more at Bloomberg Stocks News

Malaysia's Inflation Probably Held Near 33-Month Low on Stronger Currency

(Bloomberg) -- Malaysia's inflation rate probably
held near a 33-month low in June as an appreciating currency
reduced the cost of imported goods.

The consumer price index rose 1.5 percent from a year
earlier, following a 1.4 percent gain in May, according to the
median forecast of 23 economists in a Bloomberg News survey. The
inflation report is due tomorrow at 5 p.m. in Kuala Lumpur.


Read more at Bloomberg Emerging Markets News

Dollar May Drop Versus Yen Before Report Forecast to Show Cooler Inflation

(Bloomberg) -- The dollar may drop against the yen
before U.S. government reports forecast to signal cooling
inflation and waning foreign demand for U.S. securities.

The U.S. currency dropped to a 26-year low against the
pound and the weakest since 1985 against the New Zealand dollar
yesterday on concern that weakness in U.S. housing will curb
economic growth and push the Federal Reserve to cut interest
rates. Investors bought yen yesterday in part on speculation
investors will exit risky trades because of mounting losses in
U.S. securities backed by subprime mortgage loans.


Read more at Bloomberg Currencies News

Rand Holds Near 2-Week High; Gains Already Reflect Interest-Rate Outlook

(Bloomberg) -- South Africa's rand traded little
changed, holding near a two-week high against the dollar, on
speculation that recent gains already reflect the outlook for
higher interest rates.

The rand earlier touched its highest since July 3, supported
by investors seeking out South Africa's 9.5 percent interest rate
in trades funded by borrowing Japanese yen or Swiss francs more
cheaply. The Reserve Bank has increased borrowing costs five
times in the past year and is expected to continue doing so to
curb inflation.


Read more at Bloomberg Currencies News