October 13, 2011

JGB futures fall, smooth auction despite technical glitch


By Akiko TakedaTOKYO, Oct 13 (Reuters) - Japanese government bond futures fell on Thursday as hopes for the euro zone pushed money into the stock market, but the day’s 30-year note auction went smoothly despite major disruptions to morning trade due to a technical glitch at a key interdealer.Japan Bond Trading Co (JBTC), the operator of country’s main broker-to-broker dealing system for cash bonds, said a glitch forced a halt to morning trading. It resumed operations at 12:25 p.m. (0325 GMT).The glitch prompted some hedge-selling in JGB futures. Volume climbed to more than 34,000 lots, the most since September 6.JBTC handles cash JGB interdealer activity for more than 200 brokers and banks. Its JGB market prices are used as de facto market benchmarks.Despite the glitch, the dominant theme for the day was an apparent greater willingness by investors to take on risk.”We need to gauge if the recent rebound in share prices is temporary one or if there is a real recovery in ‘risk-on’ sentiment… but fundamental problems in the euro zone debt situation still exist and given this, JGB players should still be willing to buy on dips for a month or so,” said Yusuke Ikawa, rate strategist at RBS.In Europe, Slovakian lawmakers reached a deal to ratify a plan to bolster the European Financial Stability Facility by Friday and German Chancellor Angela Merkel said she was certain of full ratification of the fund’s expansion by the Oct. 23 European Union summit.December 10-year JGB futures fell 0.24 point to 142.24, after marking their lowest level since Sept. 1 at 142.13 and breaking below the upper end of the Ichimoku cloud.In cash bonds, the 10-year JGB yield rose 2 basis points to 1.015 percent, the highest level since Oct. 3.The yield-curve bear-steepened as superlongs such as 20- and 30-year bonds underperformed. Both yields climbed by 3 basis points, with the 20-year yield rising to 1.730 percent and the 30-year yield up at 1.935 percent.But analysts said the auction results were better than expected despite JBTC’s system trouble.”There was a concern that the auction would proceed smoothly due to the technical problem, but it went fine, with a higher than expected lowest accepted price,” said Ikawa at RBS.$1 = 77.340 Japanese Yen)

October 12, 2011

UPDATE 1-Alcoa Q3 profit up, but sees slower growth


* Profit and sales slip from Q2Oct 11 (Reuters) - Alcoa Inc , the largest U.S. aluminum producer, said third-quarter profit jumped from a year ago, but earnings and revenue slipped from the second quarter as economic growth slowed from the first half of this year.Net earnings were $172 million, or 15 cents per share, compared with $61 million, or 6 cents per share, a year earlier, the Pittsburgh-based company said on Tuesday.Income from continuing operations was also 15 cents per share, but down from 28 cents per share in the second quarter.Revenue rose 21 percent to $6.4 billion from a year earlier, but was 3 percent lower than the second quarter of this year as metals prices slumped sharply.Aluminum prices fell almost 20 percent in the third quarter on global economic concerns and Alcoa’s share price fell 41 percent during the same period.