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Money markets treasury sells bills, ecb rate cut awaited

* Demand robust for U.S. Treasury 6-month bills* ECB rate cut bets remain after EU summit outcome* Rate cut expectations based on weakening economyBy Ellen FreilichNEW YORK, July 2 Demand for three-month bills the U.S. Treasury sold on Monday was in line with bidding over the last three months but demand for six-month bills was more robust than usual. Treasury sold $30 billion in three-month bills at a high rate of 0.10 percent, awarding 12.35 percent of the bids at the high. The value of bids received over those accepted was 4.68. The $27 billion in six-month bills were sold at a high rate of 0.15 percent with 51.35 percent of the bids at the high. The ratio of bids received over those accepted was 4.82."Today's six-month auction drew the most robust bid in several months from the buyside perhaps due to the January 3 maturity date, which bridges year-end," said Thomas Simons, money market economist at Jefferies & Co in New York.

Perhaps the dour Institute of Supply Management report on U.S. manufacturing was constructive for purchases of short-term bills, but Simons said demand from money market funds was the biggest factor keeping bill rates low."Money funds need to keep their weighted average maturity and weighted average life at certain levels so they continue to buy bills and keep rates well below the 25 basis points interest rate on excess reserves," he said. Meanwhile, money markets expect the European Central Bank to cut interest rates this week as the euro zone economy struggles after policy action from last week's European Union summit provided only short-lived relief to volatile sovereign debt markets. Early Monday, Spanish and Italian debt yields fell after euro zone leaders last week surprised markets by agreeing on steps to curb the debt crisis. But eight hours later, the fall in Spanish debt yields lost steam amid concern over potential hurdles to implementation and uncertain global growth.

"The U.S. fiscal 'cliff,' and Europe and the implications of China's new five-year plan to re-orient their economy all throw assumptions into some kind of flux," said Jerry Webman, chief economist at OppenheimerFunds. In Europe, France sold a 51-week Treasury bill at a record low yield at a short-term debt auction on Monday, indicating demand amid concerns about the euro zone's debt crisis ease. France has seen borrowing costs fall in recent weeks to historic lows as investors seek the relative safety of French debt with the promise of richer yields than offered on German bonds. Forty-eight of 71 analysts polled by Reuters expect the ECB will trim interest rates on Thursday, with most predicting a 25-basis-point cut to 0.75 percent, where they will stay until 2014 at least.

The survey was taken before European leaders decided on a more flexible use of euro zone rescue fund last week, but given recent economic data and rhetoric from ECB policymakers, analysts are still betting on more monetary easing."Now the markets will look less to the leaders of the big European countries for direction and more to the European Central Bank which will come out with a statement on Thursday," said James Barnes, senior fixed income portfolio manager at National Penn Investors Trust Company in Wyomissing, Pa. What ECB President Mario Draghi says, whether about possible bond purchases or another long-term refinancing operation (LTRO) "can add to the good news that came out of the summit last week and add more clarity so that the market has a better idea of what to expect going forward," Barnes said. After euro zone leaders made some headway at last week's summit, the "European Central Bank will applaud that and be more open to taking some action on their end," Barnes said. European leaders decided last week that euro zone rescue funds could be used to stabilize bond markets without extra austerity measures and recapitalize banks directly without increasing the country's budget deficit. Goldman Sachs analyst Francesco Garzarelli said ECB policies have reduced the risk of a liquidity shortfall."Investors have 'learned' that the size of policymakers' response will be commensurate to the degree of stress in funding markets," he wrote in a note on Monday. Three-month Euribor rates inched lower on Monday to 0.652 percent from 0.653 percent. That was within range of a record low of 0.634 percent hit in early 2010.

Press digest australian business news feb 9

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. AUSTRALIAN FINANCIAL REVIEW (this site)Orbis Investment Management, the largest shareholder in PaperlinX, yesterday said it was "positively disposed" to removing Harry Boon as chairman of the paper manufacturer and installing Andrew Price, a veteran of the paper industry, on the group's board."We think it's exactly what the company needs at the moment," Simon Mawhinney, analyst at the fund manager, said. Page 19.-- Marius Kloppers, chief executive of BHP Billiton, yesterday said the global miner was not likely to be competing with the newly merged entity of commodities trader Glencore and rival Xstrata ,XTA.l> for takeover targets. The merger will create the fourth largest mining firm in the world behind Rio Tinto, Vale and BHP. "We only invest in tier one, long-life, low-cost assets  we will not invest money in anything that doesn't fall in that box," Mr Kloppers said. Page 21.-- Sources inside the mining industry have warned that global miner BHP Billiton will need to move quickly if it wants to acquire China Machinery Engineering Corp's rights to mine the Belinga iron ore deposit in Gabon. The country's government is looking for the new owners to develop the site for export as fast as possible, rather than keeping the mine's production out of the market. Page 23.-- The chief executive of Rio Tinto Energy, Doug Ritchie, yesterday said the global miner was interested in being a partner in a joint development of the Husab uranium site in Namibia. Extract Resources owns the deposit, although the local miner is expecting a A$2.2 billion takeover from China Guangdong Nuclear Power Corp after it acquired control of Kalahari Minerals, Extract's largest shareholder. Page 23.-- THE AUSTRALIAN (this site) Global miner Rio Tinto and other multinational resource companies will have their mining licences audited under a move announced by the Guinean government yesterday. The African country's Mines Minister, Mohamed Lamine Fofana, yesterday said at the Indaba mining conference that "a lot of companies took licences and then went all over the world to sell them". The minister added that the government was looking to alter some of its demands on miners, which is expected to include a reduction in taxes via export duties or royalties. Page 22.--

Australian Securities and Investments Commission deputy chair Belinda Gibson yesterday said the regulator would move to force issuers of debt products like debentures to clarify the risks involved."In some respects they look and feel like a bank, but they're not," Ms Gibson said. Around 45 companies issue debentures in Australia in a sector worth more than A$4.6 billion. Page 21.-- Ansell is on the brink of revealing a major takeover deal following a move by the condom and glove manufacturer to double its line of credit. Magnus Nicolin, chief executive of Ansell, yesterday said the firm's mergers and acquisitions "sweet spot" was US$30 million to US$75 million and that there was a "high likelihood" that it would be able to finalise one of its takeover targets by the end of the fiscal year. Page 21.-- Forestry group Gunns yesterday outlined plans for a A$280 million capital raising, backed by a A$150 million injection from New Zealand billionaire Richard Chandler. Mr Chandler's firm has announced plans to revive construction of the A$2.3 billion Bell Bay pulp mill in Tasmania. Peter Warnes from Morningstar said the raising would be "massively dilutive to existing shareholders" although he admitted that "if successful, the proposal probably ensures the future of the company and  the pulp mill". Page 21.--

THE SYDNEY MORNING HERALD (this site) BHP Billiton's petroleum division has announced that it will increase its attention on liquids such as oil at the expense of shale gas, less than 12 months after the global miner spent nearly A$20 billion on acquiring shale gas assets in the United States."I think what [Mike Yeager, head of petroleum at BHP] wants to do is probably less gas activity than he planned and probably on balance slightly more oil activity," Marius Kloppers, chief executive of the miner, said. Page B1.-- Stephen Williams, the head of Royal Bank of Scotland's Australian division, has reportedly told senior staff that he will resign from the investment bank after the expected sale of the unit to one of two foreign suitors. Observers say local lenders National Australia Bank, Australia and New Zealand Banking Group and Commonwealth Bank of Australia have looked at making an offer for the business, but no bids have emerged so far. Page B1.-- Observers have questioned whether the Australian Prudential Regulation Authority will approve Macquarie Group's proposed share buyback. The investment bank announced this week it would have more than A$900 million in capital above the banking regulator's 8.5 percent equity goal by the end of March. Brett Le Mesurier, banking analyst at financial services group BBY, however, said "a buyback of 10 percent of Macquarie's equity almost erodes this buffer". Page B3.

-- The chief economist of diversified lender HSBC Australia, Paul Bloxham, yesterday said large portions of the Australian economy would be under less pressure from the Australian currency's record levels if the Federal Government had not "significantly watered down" the mining tax."If the mining tax was larger, I think we would have probably seen less aggressive structural change," Mr Bloxham said at a function for the Institute of Company Directors representative body. Page B5.-- THE AGE (this site) Surf and street wear group Billabong yesterday attempted to quell speculation that chief executive Derek O'Neill would be removed by the board, amid heightened concern over the company's growing debt and falling sales. Shares in Billabong closed yesterday at A$1.845, after reaching a high of A$13.17 four years ago. Some observers have suggested that Gordon Merchant, founder and major shareholder in the group, may opt to take a more hands-on role with the company's day-to-day operations. Page B1.-- The Reserve Bank of Australia's decision to leave interest rates on hold at 4.25 percent earlier this week may not prevent local lenders from raising mortgage rates independently. The central bank's move result in a surge on the Australian dollar, which closed at a six-month high of US$1.0818 yesterday. T. S. Lim, analyst at broker Bell Potter Securities, said "every time you raise rates at a time when unemployment could tick up  you're going to put unnecessary stress on the mortgage book". Page B3.-- Shareholders in BHP Billiton yesterday were told that it will not be long before there is an increase in production from the global miner's largest ventures. Marius Kloppers, chief executive of BHP, said "enormous" benefits would soon be generated from the revamp of existing assets in Queensland, Chile and the Gulf of Mexico. "There is an enormous amount of latent capacity in our portfolio that will drive output over the short-to-medium term," Mr Kloppers added. Page B4.-- The S&P/ASX 200 Index finished 16.5 points higher to close at 4290.7 points yesterday, after a poor day's trade by global miner BHP Billiton and the major banks was mitigated by gains from the energy sector. Michael Heffernan, strategist and senior client adviser at broker Austock Securities, said the market had continued its positive momentum from earlier in the week, although BHP's announcement of a 5.5 percent drop in first-half net profit to US$9.941 billion was "on the disappointing side of ordinary". Page B9.

Press digest sunday british business feb 23

LONDON Feb 23 British newspapers reported the following business stories on this site Sunday TimesRSA'S HESTER PLANS 800 MLN STG CASH CALL RSA Chief Executive Stephen Hester will launch an 800 million pound ($1.33 billion) rights issue when the insurer reports its full-year results on Thursday in an effort to repair to the firm's balance sheet. JPMorgan and Bank of America Merrill Lynch have been hired to handle the fundraising. FAST-FOOD GROUP SSP HIRES BANKS FOR 2 BLN STG FLOAT The catering group behind the Upper Crust chain has appointed Goldman Sachs and Morgan Stanley to advise on a potential 2 billion pound float expected this summer. HSBC CHIEF'S SALARY COULD DOUBLE TO COUNTER BONUS CAP HSBC Chief Executive Stuart Gulliver is to be offered a huge salary increase to get around new European Union rules that limit bankers bonuses. Analysts believe his salary could double.

The Sunday TelegraphPUT INVESTMENT, ENERGY AT HEART OF BRITAIN'S BUDGET - CBI Business lobby group the Confederation of British Industry (CBI) has told Britain's Finance Minister George Osborne that investment and energy should be at the heart of next month's budget if economic growth is to continue, according to its submission to the Treasury. RBS FACES DRAMATIC OVERHAUL Royal Bank Of Scotland Chief Executive Ross McEwan will deliver a strategic review of the bank on Thursday, telling customers it will retune itself to focus on the UK economy and have fewer international operations.

INSURER RSA TO CANCEL DIVIDEND AFTER FRAUD, FLOODS Insurer RSA will axe its dividend for 2013 as it counts the cost of fraud at its Irish business and the winter floods in Britain. BACARDI SEES GAP FOR BOURBON MAKER IN PORTFOLIO The Chief Executive of Bacardi, the world's largest privately-owned spirits group, said the company wants to add a bourbon to its portfolio, with analysts pinpointing Jack Daniel's owner Brown-Forman as a possible target.

JUST-EAT HIRES BARCLAYS TO WOO INVESTORS AHEAD OF IPO Online takeaway service Just-Eat has hired Barclays to talk to potential investors ahead of a stock market listing valuing the company at as much as 900 million pounds later this year. JPMorgan and Goldman Sachs are already advising the venture capital-backed company and its shareholders. The Mail on SundayLAWMAKERS ACCUSE BARCLAYS OF INCOMPETENCE OVER PPI CLAIMS British lawmakers have accused Barclays of "incompetence" after some of its staff were given the wrong rules for awarding compensation over the mis-selling of payment protection insurance (PPI). MP and Treasury Select Committee member John Mann said he plans to raise the issue with Financial Conduct Authority. CO-OP ANNUAL RESULTS WILL BE 'UGLY' - CEO The Chief Executive of the Co-Operative Group Euan Sutherland said the food-to-funerals group will report some "very ugly" numbers in its annual results in March, after its banking arm was hit by a capital shortfall.

Press digest sunday british business jan 26

LONDON Jan 26 British newspapers reported the following business stories on Sunday: The Sunday Times U.S. ACTIVIST INVESTOR TARGETS BRITISH GROCERS Activist fund manager Elliott plans to lead a campaign to force grocers Tesco, Sainsbury's and Morrisons to hive off their property into separate listed companies with the supermarkets selling minority stakes. MOTHERCARE IN TALKS TO SELL EARLY LEARNING CENTRE Retailer Mothercare is in talks with several suitors to sell its Early Learning Centre toy shops as part of a recovery plan after it issued a profit warning two weeks ago. BUSINESS LEADERS SLAM LABOUR PLAN TO REVIVE 50P TAX RATE Entrepreneurs and executives have hit out at Labour's plan to reintroduce a 50 pence tax rate for high earners. Mike Rake, president of business lobby group CBI and chairman of BT, said the plan would lead to less tax income and the creation of fewer jobs. WATER COMPANIES PAID INVESTORS 11 BLN POUNDS IN PAST DECADE Britain's big six water companies paid 11 billion pounds ($18.2 billion) in dividends in the past decade while increasing bills by 55 percent and avoiding billions in income tax, according to analysis by The Sunday Times ahead of a crackdown by the industry's regulator. UBM FACES BREAK-UP AFTER HEDGE FUND RAID Hedge fund Hengistbury has built up a 5.2 percent stake in business publishing and events group UBM, increasing speculation that it will be broken up or will sell its PR Newswire division, worth about 500 million pounds. RSA COULD SCRAP DIVIDEND TO PLUG BALANCE-SHEET HOLE Insurer RSA is understood to be considering scrapping its dividend to help to raise at least 500 million pounds to plug a hole in its balance sheet. Sunday Telegraph BARCLAYS WEIGHING END OF PREMIER LEAGUE SPONSORSHIP Barclays is considering ending its 40 million pounds-a-year sponsorship of English soccer's Premier League when its current deal ends in 2016. PRUDENTIAL TO BACK UK SOCIAL HOUSING Prudential is to support efforts to build about 1,000 new homes by providing long-term financing of 156 million pounds to about 17 local housing associations in Wales. ARM CHAIRMAN TO STEP DOWN John Buchanan is understood to be preparing to step down as chairman of chip designer ARM for health reasons. AT&T STOKES VODAFONE BID TALK AT&T Chief Executive Randall Stephenson met EU telecoms commissioner Neelie Kroes in Davos to discuss the potential takeover of a leading European rival, with Vodafone said to be top of his list, Sky News reported. RBS MAY PLACE BUSINESS BANKING BACK INTO BRANCHES Royal Bank of Scotland is considering putting small business lending back under the control of it branch managers as part of a wider restructuring. Sunday Express SHOE RETAILER OFFICE COULD BE PUT ON BLOCK Shoe chain Office could be put up for sale in the next 12 months by its private equity owner Silverfleet Capital in a deal worth up to 300 million pounds. Mail on Sunday CHINA MOBILE WEIGHS VODAFONE INVESTMENT China Mobile has examined buying between 5 percent and 20 percent of Britain's Vodafone in the hope of setting up a joint venture, City sources said.