Asia stocks slip, Japan rebounds in holiday-thinned trade

TOKYO - Asian shares pared losses on Monday as a weaker yen helped Japan's Nikkei snap a four-day losing streak, but trade was thin with many regional markets closed for the Lunar New Year holiday.

Wall Street's losses on Friday curbed overall sentiment, though S&P 500 E-Mini futures ESc1 rose about 0.4 percent as investors focused on signs of strength in a mixed U.S. nonfarm payrolls report released late last week.

Financial spreadbetters predicted Britain's FTSE 100 to open around 0.6 percent higher, and Germany's DAX and France's CAC 40 to each open up about 0.4 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent, with Australian shares slipping a few points to end nearly flat.

But Japan's Nikkei erased early steep losses as the dollar gained on the yen, and ended up 1.1 percent.

With Singapore, Hong Kong and mainland China all closed for the new year holiday, volume was thin. China, a focus of recent market concern, will be closed for the entire week for the holiday.

Data released over the weekend showed China's foreign reserves fell for a third straight month in January, as the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows.

Beijing has been struggling to underpin the yuan, which faces depreciation pressure as China's growth rate slows to its lowest levels in a quarter of a century.

"Just as China's persistent accumulation of foreign reserves in the first decade of the 21st century signalled that its managed currency was undervalued, its persistent loss of foreign reserves signals that the yuan has become overvalued by market criteria," economist Bill Adams at PNC Financial Services Group said in a research note.

"There is a large probability that China's central bank tires of spending its foreign reserves to defend an overvalued currency in the near future. The People's Bank of China will likely widen the currency's trading band and permit a larger managed slide against the dollar in coming months."

Also over the weekend, North Korea's launch of a long-range rocket drew international condemnation.

SOME STRENGTH IN US JOBS

On Wall Street, major U.S. indexes logged both daily and weekly drops. The Nasdaq Composite led session losses, plunging 3.25 percent after a spate of disappointing forecasts from the technology sector.

Recently weak U.S. economic data has led investors to pare bets on a steady pace of interest rate increases by the Federal Reserve.

The U.S. nonfarm payrolls report on Friday showed an increase of just 151,000 jobs last month, falling well short of expectations for a rise of 190,000.

But the unemployment rate fell to 4.9 percent, the lowest since February 2008, and wages rose, indicating some signs of underlying strength in the labour market despite the weak headline figure.

Speculators slashed bullish bets on the U.S. dollar for a sixth straight week through Feb. 2, as net longs fell to their lowest level since roughly the third week of October, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.

In currency markets, the dollar index, which tracks the greenback against a basket of six major rivals, edged up 0.1 percent to 97.127, well above a nadir of 96.259 plumbed last Thursday, its lowest since October.

The dollar rose about 0.5 percent to 117.42 yen, moving away from Friday's 2-1/2 week low of 116.285. It slid 3.6 percent last week, its biggest weekly drop since July 2009.

"What we are seeing today is a correction after overwhelming selling in the dollar we saw last week. It is just unwinding of positions, not fresh bets against the yen," said Koichi Takamatsu, executive director of forex trading at Nomura Securities.

The euro edged down about 0.2 percent to $1.1137, though it remained in sight of Friday's three-month high of $1.1250 scaled immediately after the headline figure of the payrolls data led investors to reduce their bets on further Fed rate hikes.

The Australian dollar added 0.5 percent to $0.7094 after plunging nearly 2 percent against its U.S. counterpart on Friday.

Crude oil futures edged higher on hopes that big oil producers will take steps to address the global supply glut that has led to recent steep selloffs.

Saudi Arabia's oil minister Ali al-Naimi discussed cooperation between OPEC members and other oil producers to stabilise the global oil market with his Venezuelan counterpart on Sunday, according to state news agency SPA.

But nothing was decided, so caution kept gains in check. Brent crude added about 0.9 percent to $34.38 a barrel, while U.S. crude futures also rose about 0.9 percent to $31.17.

source: www.abs-cbnnews.com

Asian shares slump in holiday-thinned trade

TOKYO - Asian shares got off to a rocky start on Monday after mixed U.S. jobs data helped sink shares on Wall Street, but trade was thin with many regional markets closed for the Lunar New Year holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent, with Australian shares slipping 0.3 percent. Japan's Nikkei skidded 1.2 percent in early trade.

With Singapore, Hong Kong and mainland China all closed for the new year holiday, "volumes will be well below average and there tends to be a build-up of global leads that is released once Asian investors return to their desk – expect 'release valve trading late in the week," Evan Lucas, market strategist at IG in Melbourne, wrote in a note to clients.

U.S. nonfarm payrolls increased by just 151,000 jobs last month, falling well short of expectations for a rise of 190,000.

But the unemployment rate fell to 4.9 percent, the lowest since February 2008, and wages rose, indicating some signs of underlying strength in the labor market despite the weak headline figure.

Recently weak U.S. economic data has led investors to pare bets on a steady pace of interest rate increases by the Federal Reserve.

Markets in China, a focus of recent market concern, will be closed for the entire week for the holiday.

Data released over the weekend showed China's foreign reserves fell for a third straight month in January, as the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows.

Beijing has been struggling to underpin the yuan, which faces depreciation pressure as China's growth rate slows to its lowest levels in a quarter of a century.

"Just as China's persistent accumulation of foreign reserves in the first decade of the 21st century signaled that its managed currency was undervalued, its persistent loss of foreign reserves signals that the yuan has become overvalued by market criteria," economist Bill Adams at PNC Financial Services Group said in a research note.

"There is a large probability that China's central bank tires of spending its foreign reserves to defend an overvalued currency in the near future. The People's Bank of China will likely widen the currency's trading bank and permit a larger managed slide against the dollar in coming months."

Also over the weekend, North Korea's launch of a long-range rocket drew international condemnation.

On Wall Street, major U.S. indexes logged both daily and weekly losses. The Nasdaq Composite led session losses, plunging 3.25 percent after a spate of disappointing forecasts from the technology sector.

In currency markets, the dollar index, which tracks the greenback against a basket of six major rivals, was steady at 97.038, well above a nadir of 96.259 plumbed last Thursday, its lowest since October.

The dollar edged up about 0.1 percent to 116.96 yen, moving away from Friday's 2-1/2 week low of 116.285 in a week in which it logged a 3.6-percent slide, its biggest weekly drop since July 2009.

The euro edged down about 0.2 percent to $1.1142, though it remained in sight of Friday's three-month high of $1.1250 scaled immediately after the headline figure of the payrolls data led investors to reduce their bets on further Fed rate hikes.

Crude oil futures slipped in thin trade, but were underpinned by glimmers of hope for steps by oil producers to address the global supply glut that has led to recent steep selloffs.

Saudi Arabia's oil minister Ali al-Naimi discussed cooperation between OPEC members and other oil producers to stabilize the global oil market with his Venezuelan counterpart on Sunday, according to state news agency SPA.

Brent crude was down 0.4 percent at $33.91 a barrel, while U.S. crude futures shed about 0.2 percent to $30.84.

source: www.abs-cbnnews.com

$10-billion settlement of foreclosure abuse cases said to be near

Banks and regulators worked late Sunday to finalize a nearly $10-billion settlement that would halt a much-maligned program to review foreclosures from the height of the housing crisis, according to four people familiar with the talks.

At least 14 banks are involved. Since the reviews began in late 2011, the banks have paid $1.5 billion to consultants examining foreclosure records -- but not a penny to aggrieved borrowers. Both bankers and regulators found that result untenable, officials have said.

The new agreement could be announced as early as Monday morning by the Office of the Comptroller of the Currency, the arm of the Treasury Department that regulates banks with national charters, four people familiar with the negotiations said.

The people spoke on condition of anonymity because the discussions were sensitive and incomplete. The principal negotiators included six big banks that provide customer service on 90% of all U.S. home loans: Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., U.S. Bancorp and PNC Financial Services.

Regulators were presenting the deal late Sunday to eight smaller mortgage servicers that had agreed to the reviews in 2011 but were less involved in the settlement negotiations.

The regulators were prepared to announce a settlement even if some of the smaller banks declined to accept it, three of the people with knowledge of the talks said, in part because of pressure from bankers wanting to report a settlement when they announced fourth-quarter financial results.

Other efforts to help troubled borrowers and address foreclosure abuses include a $26-billion settlement last February among five giant banks and a coalition of federal agencies and state attorneys general.

The reviews of individual cases were distinctive, however, because they represented a chance to gauge the extent of the legal shortcuts, lost paperwork and abusive fees that had prompted widespread complaints.

Consumer advocates fretted that abandoning that process could mean there would be no such definitive accounting of the foreclosure mess. And they called for detailed disclosure of how the consultants had conducted reviews and how the nearly $10 billion would be spent.

“Unlike the AG settlement, which had a huge amount of scrutiny, there’s been a real lack of transparency in the foreclosure reviews and this settlement,” said Paul Leonard, California director of the Center for Responsible Lending.

The proposed settlement includes $3.75 billion in cash payments to borrowers eligible for reviews, two people familiar with the proposed agreement said.

Under the original plan devised by the comptroller and the Federal Reserve in April 2011, 4.4 million Americans whose homes were in foreclosure proceedings in 2009 and 2010 could  request a free review. Only about half a million have done so.

Borrowers who never requested a review would get only a few hundred dollars under the proposed settlement. Those who requested reviews would get bigger payments. And those determined to have definitely or likely suffered harm from flawed foreclosures could be in line for much larger payments.

Another $6 billion in "soft" aid would assist delinquent borrowers, mainly through loan modifications, relocation assistance and short sales, in which homeowners are allowed sell their home for less than they owe on their mortgage. Some, but not all, of those borrowers are among those who had been eligible for the foreclosure reviews.  

 

Payments will be allocated according to the share of the homes in foreclosure in 2009 and 2010. That would mean Bank of America, which at the time was the biggest servicer of the loans, would pay the most.

After the initial agreement was reached with the 14 banks accused of improper foreclosures, the Federal Reserve filed enforcement actions accusing the giant Wall Street investment banks Goldman Sachs and Morgan Stanley of similar abuses. Those cases are pending and it couldn't be determined if those banks would sign on to a similar settlement.

source: latimes.com