Asian Morning Briefing : Oil Prices Resumes Slilde

 
                      LAST    CHANGE   % CHG 
DJIA                 17180.8   -99.99  -0.58% 
Nasdaq               4605.16   -48.44  -1.04% 
S&P 500              1989.63    -12.7  -0.63% 
Japan: Nikkei 225    17099.4  -272.18  -1.57% 
Hang Seng            23027.9  -221.35  -0.95% 
Shanghai Composite   2953.42    15.25   0.52% 
S&P BSE Sensex       27319.6   -31.12  -0.11% 
Australia: S&P/ASX    5186.1    -33.5  -0.64% 
UK: FTSE 100         6182.72  -117.91  -1.87% 
 
 
                    PRICE CHG  YIELD% 
U.S. 2 Year             -2/32   0.580 
U.S. 5 Year             -9/32   1.574 
U.S. 10 Year           -11/32   2.120 
Australia 10 Year        3/32   2.883 
China 10 Year           -8/32   3.830 
India 10 Year            0/32   7.836 
Japan 10 Year            6/32   0.379 
German 10 Year          -1/32   0.629 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)        0.8215  0.0004 
Yen (USD/JPY)                117.94    0.11 
S. Korean Won (USD/KRW)     1097.61   -0.16 
Chinese Yuan (USD/CNY)       6.1902  0.0007 
Euro (EUR/USD)               1.2439       0 
WSJ Dollar Index               82.1       0 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      55.32   -2.49  -4.31% 
Brent Crude    60.68   -1.47  -2.37% 
Gold          1193.6   -28.9  -2.36% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT
        Oil prices resumed their slide, settling at fresh multiyear lows on concerns about ample supplies. U.S. stocks also declined amid the continued slump in oil prices. Treasurys and gold pulled back ahead of this week's Fed meeting, which will be the last policy meeting of the year. The yen gained against the dollar and euro on global market jitters.
        OPENING CALL
        On tap Tuesday is China's HSBC Markit December preliminary "flash" purchasing managers' index. This indicator's fall to a six-month low in November was one of the pieces of data that triggered a rate cut by the People's Bank of China. If there are no other signs of a rebound, speculation will grow that the PBOC and central government will take further measures to stimulate the economy.
        EQUITIES
        U.S. stocks fell amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting.
        Broadly, strategists and investors say the continuing drop in oil should be good for U.S. stocks, since it gives consumers and companies a break on energy costs. But investors who make broad, global bets worry the drop is a sign of slower-than-expected global demand. Crude oil fell 3.3% to settle at $55.91 a barrel, its fourth-straight decline.
        Beyond those concerns, long-term investors are hesitating to make new bets on stocks before the end of this year, traders said.
        "It's been go-along buying and selling today. I don't see a lot of urgency," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. "No one's making any real bets."
        Money managers were selling some of their winning stocks, traders said, to cut back on risk in case U.S. stocks continue to fall into year-end. Utilities and health-care stocks, the best-performing sectors in the S&P 500 this year, slid more than the broader index. The Nasdaq Biotechnology Index, up 31% year-to-date, fell 2.8%. Shares of Apple, which are up 35% this year, fell 1.4%.
        "Momentum works in both directions," said Michael Antonelli, sales trader at brokerage firm Robert W. Baird. "When the market sells off, [fund managers] have to sell to reduce [their] risk."
        In corporate news, shares of PetSmart rose 4.2% after the pet-supply retailer agreed to be bought by a group led by BC Partners for more than $8.2 billion, the biggest private-equity buyout this year.
        Shares of American Realty Capital Properties tumbled 8.5% after the real-estate investment trust said its chairman and chief executive have stepped down amid an investigation into potential accounting irregularities.
        Shares of Boeing rose 2% in late trading after the company said its board authorized the repurchase of $12 billion of shares over the next two to three years and raised its quarterly dividend by 25%.
        In Asian trading Monday, stocks weakened as worries about a suspected terrorist attack in Australia added to pressure from declining oil prices, and slower growth in the region kept investors at bay.
        FOREX
        The yen gained against most major currencies as uncertainty over falling oil prices outweighed victory by Japanese Prime Minister Shinzo Abe's Liberal Democratic Party in Sunday's general election.
        Tumbling oil prices have provoked uncertainty and volatility in many markets, as investors worry what effect the drop will have on already low inflation in many developed markets and on growth in the world's largest economies.
        Consequently, investors are moving out of the dollar and into the yen, in the belief that the Japanese currency will retain its value until the markets regain their calm.
        "Anxiety is creeping back into the market, which is pushing volatility back up," said Shaun Osborne, chief currency strategist at TD Securities. "There's safe-haven buying outright, and the yen remains a haven currency."
        Investors were more concerned about protecting their wealth than the longer-term implications of Japan's election. The LDP's landslide win secured a fresh mandate for Mr. Abe's efforts to revitalize the nation's economy, although his policies are likely to weaken the currency, analysts said.
        Looking ahead, the Federal Reserve concludes its two-day policy-setting meeting Wednesday, which is expected to shed light on timing for higher interest rates in the U.S. and provide direction for the dollar.
        BONDS
        U.S. Treasury bonds pulled back on after the biggest weekly rally in more than two years as investors cashed in some chips from the haven bond market.
        The price decline came ahead of the Federal Reserve's two-day interest-rate-policy meeting which starts on Tuesday. It will be the central bank's last policy meeting in 2014.
        "There has been some decent profit-taking," said Anthony Cronin, a Treasury bond trader at Société Générale. "Also given where yields are, the risk is that the Fed isn't as dovish as the market needs them to be to sustain these levels."
        Some analysts said that with lower oil prices reducing inflation expectations, the Fed will continue to be patient in raising interest rates, which would encourage investors to buy bonds.
        The Fed is scheduled to release its policy statement at 2 p.m. Wednesday, followed by a news conference by Fed Chairwoman Janet Yellen.
        Some traders say bond yields would rise if the Fed highlighted the benefits of lower oil prices to the economy and signaled that the oil market's impact on inflation expectations would be temporary.
        COMMODITIES
        Oil prices fell to fresh multiyear lows as concerns about a global glut of oil outweighed news of reduced Libyan exports.
        "The sellers are still in charge, and it seems like the market really hasn't bottomed," said Gene McGillian, senior analyst at Tradition Energy.
        Prices had risen earlier in the session after armed clashes in Libya over the weekend disrupted oil exports. Libya declared force majeure on two key oil ports, a top oil official told The Wall Street Journal on Sunday, as armed clashes disrupted about half of the country's crude export capacity. Samir Kamal, head of planning at Libya's state-run National Oil Co., said oil flows from fields supplying the terminals have been interrupted.
        The two ports typically ship 560,000 barrels a day combined, nearly half the country's export capacity. The two terminals reopened this summer after a one-year interruption, and increased Libyan oil exports are a key reason prices have plunged in recent months.
        Libyan ports have closed before only to quickly reopen, Mr. McGillian said, so the closures would need to be sustained for prices to stay higher.
        "The market gave, basically, an over-the-shoulder glance [to the Libya news] and left it in the rearview mirror," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Oil has a lot of moving pieces moving against it right now," including ample supplies, sluggish demand and the Organization of the Petroleum Exporting Countries' November decision to maintain its production quota.
        Gold prices finished lower, as the dollar firmed ahead of a Federal Reserve meeting later in the week.
        TODAY'S HEADLINES
        Russia's Central Bank Raises Key Rate to 17%
        Russia announced it raised its key rate to 17%, effective immediately. The news comes on the heels of Russia's currency losing more than one-tenth its value Monday--and Russian firms including Sberbank and Gazprom hitting new lows--as oil gave back earlier gains to end lower.
        Police Say Three Dead in Sydney Cafe Siege
        A siege that shut down a large part of central Sydney for more than 16 hours ended in bloodshed after two hostages and their armed captor were killed when police stormed the cafe behind volleys of bullets.
        U.S. Industrial Production Surpasses Prerecession Peak
        U.S. manufacturing output climbed past its prerecession peak this fall, suggesting the American economy is on solid footing despite growing signs of weakness abroad. Separately, the New York Fed's manufacturing index sank in December, and U.S. home-builder confidence slipped.
        American Realty Capital's Chairman, CEO Resign
        American Realty Capital Properties, the real-estate investment trust under investigation for accounting irregularities, said that Chairman Nicholas Schorsch and CEO David Kay have stepped down.
        PetSmart to Be Acquired by BC Partners-Led Group
        PetSmart agreed to be bought by a group led by BC Partners for about $8.25 billion, in the largest private-equity buyout of the year. BC prevailed in the auction over rival buyout firm Apollo Global Management.
        Riverbed Technology agreed to be acquired by private-equity firm Thoma Bravo for about $3.6 billion, following more than a year of pressure from activist investor Elliott Management.
        Boeing Unveils $12 Billion Buyback Plan, Boosts Dividend
        Boeing said its board authorized the repurchase of $12 billion of the aerospace and defense company's shares over the next two to three years and raised its quarterly dividend by 25%.
        BT Group in Exclusive Talks to Buy EE
        BT Group said it has entered exclusive talks to buy U.K. mobile operator EE for $19.6 billion in cash and stock from Germany's Deutsche Telekom and France's Orange.
        UAE Minister Sees Emergency OPEC Meeting as Premature
        OPEC won't have an emergency meeting unless something drastic happens in the market and the group won't cut its production now as the move would provide only a temporary fix, United Arab Emirates' oil minister said.
        SEC Files to Drop Herbalife Insider Case
        The Securities and Exchange Commission moved to dismiss insider-trading charges against a man accused of profiting from privileged information tied to Herbalife.
        RECENT DJ DOMINANTS
        Boutique Hotel Operator Kimpton Hotels Seeking to Sell the Company
        Google Enhancing Shopping Site in Challenge to Amazon
        KCG Europe Offices in London Without Electrical Power for Three Hours
        Canada's Beacon Securities Adds Cooke to Institutional Equity Sales Desk
        Polish MPC Hausner: Spring Deflation Would Speak for Rate Cut
        TODAY'S CALENDAR
        (Times in GMT, followed by country and event)
        0030 AUS Dec Reserve Bank Board Monetary Policy Meeting Minutes
        0135 JPN Dec Japan Flash Manufacturing PMI
        0145 CHN Dec HSBC China Flash Manufacturing PMI
        0200 CHN Nov FDI Foreign Direct Investment
        0700 UK Bank of England's Financial Stability Report
        0700 UK Bank of England publishes UK stress testing results
        0800 FRA Dec France Flash PMI
        0830 HK Oct External Merchandise Trade: Volume & Price Statistics
        0830 GER Dec Germany Flash PMI
        0900 EU Dec Eurozone Flash PMI
        0900 ITA Oct Foreign Trade EU
        0930 UK Oct ONS House Price Index
        0930 UK Nov UK producer prices
        0930 UK Nov UK monthly inflation figures
        1000 GER Dec ZEW Indicator of Economic Sentiment
        1000 EU Oct Foreign trade
        1045 UK BoE Governor Mark Carney participates in the Inspiring Women event
        1100 ITA Q3 Labour Cost Index
        1245 US ICSC-Goldman Sachs Chain Store Sales Index
        1330 US Nov New Residential Construction - Housing Starts and Building Permits
        1330 CAN Oct International transactions in securities
        1330 CAN Oct Monthly Survey of Manufacturing
        1355 US Johnson Redbook Retail Sales Index
        1445 US Dec US Flash Manufacturing PMI
        2130 US API Weekly Statistical Bulletin
        2350 JPN Nov Provisional Trade Statistics for the Month
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        (END) Dow Jones Newswires

        December 15, 2014 17:38 ET (22:38 GMT)
        Riverbed to be Acquired by Thoma Bravo
        (MORE TO FOLLOW) Dow Jones Newswires

        December 15, 2014 17:38 ET (22:38 GMT)

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