Japan shares clear 18-year peak, dollar firm

SYDNEY - Asia shares were trying to score a sixth session of gains on Wednesday as investors chose to be optimistic on the chances of a Greek debt deal, while the dollar held firm as the prospect of U.S. rate rises came back into view.

Japan's Nikkei led the way as a rise of 0.5 percent cleared a peak from 2000 to reach ground last trod in late 1996.

MSCI's index of Asia-Pacific shares outside Japan edged up 0.13 percent to bring its gains over the past six sessions to about 2.9 percent.

In China, official efforts to calm jittery investors seem to have steadied sentiment after steep losses last week. Shanghai stocks were up 1.6 percent but trade remained volatile.

Gains on Wall Street had been minor, though still enough to see the Nasdaq to a record peak. The Dow ended Tuesday up 0.13 percent, while the S&P 500 added 0.06 percent and the Nasdaq 0.12 percent.

Risk appetites were whetted after Greece's leftwing government expressed confidence that parliament would approve a debt deal with lenders, despite an angry reaction from some of its own lawmakers.

EU finance ministers meet on Wednesday to discuss whether or not to put the plan to euro zone state heads. If it goes ahead, the Greek parliament could vote as early as this weekend.

Bond investors were encouraged enough to push down yields on Greek 10-year debt by 60 basis points, with yields in Italy and Portugal following.

Yields went the other way in the United States following a string of generally upbeat economic data and comments from Fed Governor Jerome Powell that the economy could be ready for interest rate increases in both September and December.

That was unwelcome news for debt markets which are priced for only one hike this year. Yields on 10-year Treasury notes duly rose to their highest in 1-1/2 weeks at 2.43 percent.

"Markets appear to have interpreted the prospect of a deal between Greece and its creditors as removing a source of uncertainty, which may allow the Fed to commence hiking interest rates in September," said analysts at ANZ.

All of which helped give the U.S. dollar index its biggest daily gain since late May.

The greenback was particularly strong against the euro, which had peeled off to $1.1176 from a $1.1410 top at the start of the week. Against the yen, the euro was down at 138.34, having fallen from 140.

The dollar was also firm at 124.86 yen and well above the recent trough of 122.46.

In commodity markets, oil prices rebounding ahead of U.S. inventory data expected to show strong demand for gasoline.

U.S. crude futures added 11 cents to $61.12 a barrel, while Brent rose 10 cents to $64.55.

Gold slipped on the firmer dollar to reach $1,176.90 an ounce.

source: interaksyon.com

Microsoft profit falls on sluggish Windows, currency pressure

SEATTLE — Microsoft Corp on Monday reported a fall in its quarterly profit that was in line with Wall Street forecasts, as sluggish personal computer sales dampened demand for Windows software and the company struggled with the impact of the strong U.S. dollar.

Shares of the world’s largest software company, which have surged to 14 year highs in the past few months, fell 3 percent in after-hours trading, to $45.63.

“While currency is a headwind for Microsoft and other large international companies, we would characterize the headline numbers as good enough, although some bulls may have been hoping for a bigger beat,” said Daniel Ives, an analyst at FBR Capital Markets.

Microsoft’s flagship Windows business has been under pressure for three years as PC sales have declined, although the market appears to be stabilizing in recent months.

Currency shifts against the strong U.S. dollar also crimped profit in the fiscal second quarter, ended Dec. 31, although Microsoft did not specify by how much. Microsoft gets almost three-quarters of its revenue from overseas, but a significant amount of that is still in U.S. dollars.

“Overall, the only surprise I think was in commercial licensing, where we had a little bit of a headwind from foreign exchange as well as macro conditions in China and Japan,” the company’s chief financial officer, Amy Hood, said in a phone interview with Reuters.

Commercial licensing is chiefly sales of Windows and Office to business customers, which is Microsoft’s biggest revenue generator.

Microsoft reported profit of $5.86 billion, or 71 cents per share for the latest quarter, compared with $6.56 billion, or 78 cents per share, in the year-ago quarter.

Sales rose 8 percent to $26.47 billion, largely due to the acquisition of Nokia’s phone handset business last year.

Analysts had expected revenue of $26.3 billion and earnings of 71 cents per share, on average, including some restructuring costs.

source: interaksyon.com

Dollar gains ground on yen, Japan shares test highs

SYDNEY - The U.S. dollar was holding broad-based gains in Asia on Tuesday in a boon for shares of Japanese exporters but a burden for oil, gold and stocks in the energy majors.

As the dollar finally broke to a six-year peak on the yen and a one-year top on the euro, Brent oil sank to 16-month lows while gold carved out a three-month trough.

A falling yen tends to be viewed as positive for Japanese exporters and corporate profits, and helped lift the Topix 0.2 percent to 1,301. That was within a whisker of this year's peak at 1,308.08 and a break there would put it on ground last trod in July 2008.

According to Nomura Securities, a fall of 1 yen against the dollar boosts aggregate operating profits at Topix firms by 300 billion yen.

Markets elsewhere in the region were steady with MSCI's broadest index of Asia-Pacific shares outside Japan down a slight 0.1 percent.

Despite market concerns over China's economy, stocks there have been buoyed by talk of more stimulus and reform measures.

The CSI300 of the leading Shanghai and Shenzhen A-share listings edged higher on Tuesday having put in its best performance in a year last week with gains of almost 5 percent.

On Wall Street, the Dow closed down 0.15 percent, while the S&P 500 fell 0.31 percent but the Nasdaq eked out a 0.2 percent gain.

Energy led the decline, with the S&P energy index .SPNY off 1.6 percent and Exxon Mobil down 1.5 percent.

Investors were now eagerly awaiting the launch of new products by Apple later on Tuesday in a much-hyped event at Cupertino, California.

Apple has fed high expectations, with promises by executives that the company's best product pipeline in 25 years is being readied inside its secretive facilities.

Dollar up, pound down

In currencies, the dollar index climbed as far as 84.425, bringing into view the July 2013 peak of 84.753. A break there will take it to highs not seen since July 2010.

Giving bulls encouragement was a research from the San Francisco Fed noted that investors are pricing in a lower trajectory for interest rates rises than members of the Fed itself are.

"The market's interpretation is that perhaps it had better re-price those expectations," said Emma Lawson, senior currency strategist at National Australia Bank.

As a result, yields on 10-year U.S. Treasuries rose to 2.496 percent US10YT=RR, up from a low of 2.3870 touched last Friday after the soft August payrolls report.

The greenback raced to a high of 106.28 yen, while the euro slumped to a low of $1.2878. Investors were already giving the common currency a wide berth after the European Central Bank surprised on Thursday with a fresh round of stimulus.

Sterling was nailed to 10-month lows after a second opinion poll found a marked increase in support for Scottish independence just 10 days before the country votes on whether to break away from the United Kingdom.

The TNS poll found support for independence had risen six points to 38 percent, just a pip behind the 'No' camp at 39 percent. That follows a YouGov poll that showed approval of independence at 51 percent against the unity camp's 49 percent, the first to find a majority for a 'Yes' vote.

The YouGov poll caused tremors in financial markets on Monday, knocking the pound lower and hurting stocks of companies with a large Scottish presence. Sterling was at a fresh trough of $1.6079 on Tuesday in Asia.

The gains for the dollar meant losses for commodities, with gold down at $1,255.56 an ounce after losing more than 1 percent on Monday.

Brent crude oil eased another 6 cents to $100.14, after slumping as far as $99.36 overnight, the lowest since May 2013. U.S. crude managed to bounce 30 cents to $92.96 a barrel.

source: interaksyon.com