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Argentina to make debt offer to Paris Club: source

Argentina will make an offer to members of the Paris Club on Monday to renegotiate the terms of some $9.5 billion of debt it still owes to the group of creditor nations, an Argentine source said. _0"> Talks on the debt, which Argentina stopped servicing as part of its massive default in 2002, have been stalled for years. Paris Club members Germany and Japan between them hold about 60 percent of the outstanding amount. With Buenos Aires signaling it wants to settle disputes with its creditors, Paris Club members have been eager to get a concrete proposal for the debt to be repaid over a period of time to be determined in negotiations. "We will make an offer," the Argentine source told Reuters before a meeting between the delegation led by Economy Minister Axel Kicillof with Paris Club officials in the French capital. Speaking in Buenos Ares, Cabinet chief Jore Capitanich told reporters that the negotiation would have to respect Argentina's national interest

Panama Canal Authority rejects EU mediation offer in contract row

The Panama Canal Authority (PCA) has turned down an offer by the European Commission to mediate in a multi-billion dollar dispute with a Spanish-led construction consortium which threatens to halt work on widening the century-old waterway. The consortium, known as Grupo Unidos por el Canal (GUPC), had threatened to suspend work by Monday unless the Panama Canal Authority (PCA) paid $1.6 billion in cost overruns on one of the world's largest construction projects. But on Sunday the group backed down from the threat. The European Commission said on Monday GPUC, led by Spanish builder Sacyr ( id="symbol_SCYR.MC_0"> SCYR.MC ), had requested mediation by the European commissioner for industry Antonio Tajani, who accepted. But the PCA immediately rejected it. "The contract over a third set of locks has already mechanisms to resolve disputes and none of them includes the intervention of a third party," PCA said in a statement. "This will only be dealt wi

JPMorgan sues Berlin transport provider over derivatives contract

JPMorgan ( id="symbol_JPM.N_0"> JPM.N ) is suing Berlin's public transport provider in a British court to recover the $204 million plus interest it says it is owed over an "unfortunate" derivatives contract taken out before the financial crisis. The lawyer for the U.S. bank said Berliner Verkehrsbetriebe (BVG) was looking for anyone other than itself to blame for the losses on the collateralized debt obligation (CDO). "Rather than simply accepting that it had been unfortunate in the events that happened in the financial markets... BVG has decided to follow a course doing everything it could to avoid paying its debts... casting around for someone to blame other than itself," Laurence Rabinowitz told a London court on the first day of the trial. Problems arose simply because the transaction occurred just when serious cracks in the world's financial system were appearing, Rabinowitz added. BVG, which runs the German capital's underground

Deutsche Bank to rein in global bond trading in profit push

Deutsche Bank ( id="symbol_DBKGn.DE_0"> DBKGn.DE ) is to rein in global trading ambitions to put more emphasis on profitability than size at its core bond trading business where a sharp drop in revenues contributed to a big fourth quarter loss. The 1.15 billion euro ($1.56 billion) loss compounds problems that have dogged Germany's biggest bank over the past year, including a list of lawsuits and regulatory wrangles and the need to shore up its balance sheet. Co-Chief Executive Anshu Jain stuck by the bank's promise to meet its 2015 targets while predicting a tough 2014. "We are forecasting that 2014 will represent the turning point where the bulk of our legacy losses, litigation and derisking costs ... will be behind us," he told analysts in a conference call on Monday. Jain said Deutsche's debt downturn was structural and required shifting activities away from Europe and toward the more vibrant U.S., and away from size and towards profitabilit

Air industry mulls jet fuel hedging options

Taking out complex call options or even buying a refinery are some of the measures airlines should consider as they try to combat volatile oil prices, air finance industry experts said. _0"> Jet fuel can account for anywhere from between 20 and 50 percent of an airline's operating costs, and predicting oil prices is a headache. "No one knows where oil prices will be in six months, let alone 10 years away," James Dempsey, Ryanair ( id="symbol_RYA.I_0"> RYA.I ) group treasurer, told a conference hosted by Airline Economics on Monday. "Oil prices are one of the biggest risk factors in the business." Delta Air Lines ( id="symbol_DAL.N_1"> DAL.N ) bought its own refinery in 2012 to address the risks from fuel prices. Even though the refinery turned only a small profit for the first time in the third quarter of 2013, over 60 percent of air finance executives polled at the conference on Monday believed this was a good move. So

Peugeot moves closer to Dongfeng deal as sales sag

French carmaker PSA Peugeot Citroen ( id="symbol_PEUP.PA_0"> PEUP.PA ) has taken a decisive step towards a tie-up with China's Dongfeng Motor Co. ( id="symbol_0489.HK 0489.HK ) as the board approved the outlines of a contentious survival plan that divided the founding Peugeot family. _1"> In a blow to Chairman Thierry Peugeot, who had championed an alternative plan, the board agreed in principle to a capital increase that would see the Chinese state-owned carmaker and French government acquire minority stakes and the family cede control, sources familiar with the matter said on Monday. Peugeot confirmed in a statement that it was looking to raise 3 billion euros ($4.1 billion) in a deal with Dongfeng, after unveiling a further 4.9 percent decline in global vehicle deliveries for 2013 earlier on Monday. The French government would subscribe to the share issue "on the same terms and conditions as Dongfeng", Peugeot said, an assertation later c

Housing crash hit minority communities hardest, study shows

The rise and fall of U.S. home values during the housing bubble and bust disproportionately affected black and Hispanic homeowners, real estate website Zillow said in a study released on Thursday. Hispanic communities were hit hardest by the collapse of the real estate market, with home values in those neighborhoods falling an average of 46 percent from the height of the bubble to the bottom. Communities where blacks were the predominant group saw values drop 32 percent during the same period. In contrast, white and Asian communities saw drops of 24 percent and 20 percent respectively. The research shows that "minority home buyers are encountering difficulties that often aren't shared by white home buyers," said Stan Humphries, Zillow chief economist. U.S. home prices dropped more than 30 percent from their mid-2006 peak to the bottom in 2012. Fast-rising property values have helped solidify the sector's recovery. "Even after they achieve the dream, they

World economy on recovery road, but weak inflation threatens: Reuters poll

A much better year lies in store for most of the world's major developed economies, although weak inflation will persist, complicating central banks' ability to get interest rates back to normal, Reuters polls forecast on Thursday. As in the last few years, the United States looks set to the lead the way, with growth also quickening in Britain and Germany . However, Japan looks set to disappoint and the euro zone will probably lag again compared with its Western peers. Emerging markets again look a mixed bag. Perhaps the main difference this year is that forecasts from the 300 or so economists polled across the world over the last week at least suggest little prospect of a return to recession in the euro zone , the world's largest trading bloc. Overall, the poll showed the world economy will grow 3.6 percent this year compared with 2.9 percent in 2013. That would snap a three-year stretch of slowing global growth since the world economy first rebounded from the seve

U.S. data points to firming labor market, inflation tame

The number of Americans filing new claims for unemployment benefits fell for the second consecutive week last week, suggesting a sharp step-down in job growth in December was likely to be temporary. The better labor market tone was also captured by a survey on Thursday showing an acceleration in manufacturing activity in the Mid-Atlantic region, accompanied by a rise in factory jobs. "We view the tepid December payroll gain as an aberration and expect job creation to look stronger in January," said John Ryding, chief economist at RDQ Economics in New York. Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 326,000, the Labor Department said. That compared to economists' expectations for a fall to 328,000. Job growth slowed sharply in December, with employers adding only 74,000 new positions. Nonfarm payrolls increased 241,000 in November and the retreat last month was blamed on cold weather. In a separate report, the Philadelphia

What is your risk appetite? regulator asks U.S. banks

Big U.S. national banks would have to report their risk appetites and boost oversight by their boards under new rules proposed by a U.S. bank regulator on Thursday to help avoid a repeat of the 2007-2009 financial crisis. The Office of the Comptroller of the Currency (OCC) issued the guidelines as part of its "heightened expectations" program for the biggest U.S. banks. Bank regulators, particularly the OCC, came under intense scrutiny for not cracking down on dangerous activity that fueled the 2007-2009 financial crisis. The OCC also faced criticism after the "London whale" incident, in which traders at JPMorgan Chase placed outsized bets that wound up costing the bank billions of dollars. Regulators and lawmakers said that incident occurred in part because JPMorgan's management failed to scrutinize risk-taking in every part of the bank. The bank's directors also were caught unaware of the activity. JPMorgan wound up paying more than $1 billion to re

U.S. Fed balance sheet grows to $4 trillion

The U.S. Federal Reserve's balance sheet reached $4 trillion in the latest week as its latest stimulus program aimed to help the economy added more Treasuries and mortgage-backed securities to its holdings, central bank data released on Thursday showed. _0"> On January 15, the Fed's liabilities, which are a broad gauge of its lending to the financial system, rose to $4.029 trillion from $3.986 trillion a week earlier. The Fed's third round of quantitative easing began in late 2011 when its balance sheet was less than $3 trillion. On December 18, the central bank decided to shrink its monthly purchases of Treasuries and MBS by $10 billion to $75 billion in January. The Fed's holdings of Treasuries rose to $2.221 trillion as of Wednesday, up from $2.213 trillion the previous week. The Fed's ownership of mortgage bonds guaranteed by Fannie Mae ( id="symbol_FNMA.OB_0"> FNMA.OB ), Freddie Mac ( id="symbol_FMCC.OB_1"> FMCC.OB ) and

Senate approves $1.1 trillion bill to end government funding battle

Washington's battles over government funding ended with a whimper on Thursday as the U.S. Senate approved a $1.1 trillion spending bill that quells for nearly nine months the threat of another federal agency shutdown. _0"> The measure, which funds thousands of government programs from the military to national parks through the September 30 fiscal year-end, passed by a strong, 72-26 majority. President Barack Obama is expected to sign it into law. The vote came exactly three months after the end of a 16-day government shutdown in October that was waged over disputed funding of "Obamacare," the president's signature health care law. "We're a little late, but we have gotten the job done," said Senate Appropriations Committee Barbara Mikulski said on the Senate floor. (Reporting by David Lawder, editing by G Crosse and David Gregorio)

Senate approves U.S. budget bill, ends shutdown threat

Washington's battles over government funding ended with a whimper on Thursday as the U.S. Senate approved a $1.1 trillion spending bill that quells for nearly nine months the threat of another federal agency shutdown. The measure, which funds thousands of government programs from the military to national parks through the September 30 fiscal year-end, passed on a strong, 72-26 bipartisan vote. President Barack Obama is expected to sign it into law by Saturday. The vote came exactly three months after the end of a 16-day government shutdown in October that was waged over disputed funding of "Obamacare," the president's signature health care law. "We're a little late, but we have gotten the job done," Senate Appropriations Committee Barbara Mikulski said on the Senate floor. The fiscal focus in Congress now turns to debate over another boost in the $17 trillion federal debt limit. An increase could be needed in as little as six weeks. Republicans ha

Japan consumer mood worsens in December

Japanese consumer confidence worsened in December, a Cabinet Office survey showed on Friday, in a possible sign of wariness towards a sales tax hike in April. _0"> The survey's sentiment index for general households, which includes views on incomes and jobs, was 41.3 in December, down from 42.5 in November. A reading below 50 suggests consumer pessimism. The Cabinet Office cut its assessment of consumer confidence, saying it is stalling. (Reporting by Tetsushi Kajimoto; Editing by Shinichi Saoshiro)

Fitch affirms Netherlands at AAA, outlook negative

The Netherlands kept its triple-A credit rating from Fitch, which said on Friday the decision reflected the country's strong underlying economic, institutional and credit fundamentals. The rating agency kept the outlook at negative, however, because of the Netherlands' weak economic growth prospects. Another rating agency, Standard & Poor's, stripped the Netherlands of its top-grade AAA rating in late November, also citing its low growth prospects. That left Germany , Luxembourg and Finland as the only members of the 17-nation euro zone with the coveted top rating from all three leading credit agencies. Moody's, which still rates the Netherlands triple-A with a negative outlook, will publish its next update on March 7. "The country's flexible, diversified, high value-added and competitive economy benefits from strong domestic institutions, a track record of sound budgetary management and historically broad public and political consensus in support of

Japan raises its economic view, capex seen on the rise

Japan raised its assessment on the overall economy for the first time in four months, reflecting strong private consumption and improving capital expenditure, suggesting Tokyo's aggressive stimulus is solidifying an economic recovery. The government on Friday also raised its view on consumer spending for a second straight month, saying it is "increasing" as sentiment remains upbeat and as demand rises ahead of a sales tax hike in April. In addition, with company profits and business conditions recovering, the government upgraded its assessment on capital spending for the first time in four months, saying it is picking up. "The economy is recovering at a moderate pace," the government said in its January report released on Friday, using slightly stronger wording than the previous month when it said the economy was on track towards a moderate recovery. The upbeat view comes as Japan's economy benefits from the government's massive fiscal and monetar

China central bank tells lenders to strengthen liquidity management

China's central bank on Friday urged commercial lenders to strengthen liquidity management and set a reasonable pace on lending, even as it pledged to adjust liquidity to help maintain appropriate credit growth this year. _0"> Rising money market rates and bond yields in recent months indicate the People's Bank of China is committed to curbing high debt levels in the economy to head off potential financial risks, but there is little sign of abrupt policy tightening. "We will use various liquidity management tools in a flexible way and improve the system to appropriately adjust liquidity to maintain reasonable growth in credit and social financing," Zhang Xiaohui, head of the central bank's monetary policy department, wrote in the China Finance magazine, run by the central bank. The PBOC has pledged to keep monetary policy largely stable this year with timely fine-tuning in line with economic changes. The central bank warned in a statement after a me

ThyssenKrupp CEO tells investors needs time for overhaul

Steel maker ThyssenKrupp's ( id="symbol_TKAG.DE_0"> TKAG.DE ) Chief Executive Heinrich Hiesinger asked shareholders to be patient on Friday as he completes what is proving to be a troublesome overhaul of the company. Since becoming CEO three years ago, Hiesinger has been trying to shift the focus of ThyssenKrupp, once a symbol of Germany's industrial prowess, from the volatile steel sector to higher-margin products and services such as elevators, industrial plants and high-performance car parts. His efforts, however, have been besieged by setbacks. ThyssenKrupp has posted three straight years of losses, its deteriorating finances forced it to ask shareholders for cash, major deals have been only partly successful, and compliance issues have emerged that have been both costly and embarrassing. "This restructuring, this fundamental renewal, will take time," he told investors at ThyssenKrupp's annual shareholders' meeting. After repeatedly exte

U.S. factories close out 2013 on strong footing

U.S. factory output rose a stronger-than-expected 0.4 percent in December, closing out a strong quarter in which overall industrial production advanced at its fastest clip in 3-1/2 years. _0"> The data from the Federal Reserve on Friday was the latest to underscore a strengthening in the economy. Helped by the rise in manufacturing activity, overall output at the nation's factories, mines and utilities rose 0.3 percent. Mining production rose 0.8 percent, but utilities output dropped 1.4 percent after a big November gain. For the fourth quarter as a whole, industrial production advanced at a 6.8 percent pace, the largest quarterly increase since the second quarter of 2010. Economists polled by Reuters had expected factory output to rise 0.3 percent, while the gain in overall industrial production matched forecasts. To increase output, U.S. industry employed 79.2 percent of its capacity - the most since June 2008 and a touch above forecasts. Still, capacity use remain

Rouhani to woo business in Davos but Iran hurdles abound

Iranian President Hassan Rouhani will court global business in Davos next week after winning an easing of some economic sanctions, but any trade bonanza depends on the long-term success of nuclear diplomacy. A U.S. stranglehold on Iran's access to the international financial system, the uncertain future of talks on its nuclear program beyond a six-month initial deal, and vested interests in the Islamic Republic suspicious of Western investment all stand in Rouhani's way. "I would be surprised if you saw Iran shooting quickly to the top of the list of attractive markets, although it may be attractive for certain manufactured goods companies in the short to medium term," said a Western business consultant who works with many of the world's biggest companies. "The fact that Iran is making signals in the right direction is welcome but I think the bulk of business people will be cautious and will play a bit of a wait-and-see game," he said, asking - li

Growth in EU faster than foreseen in autumn: Rehn

The economic recovery in the European Union is proceeding faster than had been forecast in the fall, which will likely allow upward revisions to growth forecasts, EU Economic and Monetary Affairs Commissioner Olli Rehn said on Friday. _0"> "It seems that we will be able to raise slightly our forecasts for this year because the global economies are growing faster than we had forecast in the fall," Rehn told reporters in Rome. He said he was "confident" that Italy would meet its public finance targets, and that the government could request some flexibility on its deficit if it keeps its budget in check. (Reporting by Giuseppe Fonte, writing by Steve Scherer)

U.S. appeals panel appears to side with Fed in 'swipe fee' suit

U.S. appeals judges appeared on Friday to side with the Federal Reserve over a group of retailers who are disputing the level of fees set by the Fed on the use of debit cards. _0"> Businesses pay "swipe fees" to banks when customers use debit cards to purchase goods or services to cover the costs of offering the cards. At the instruction of Congress, the Fed in 2011 limited those fees, and settled on 21 cents per transaction. A U.S. district court agreed with the merchants that the agency set the cap higher than lawmakers intended and threw out the Fed's fee limits last year. The Fed appealed the ruling. The three-member appeals panel on Friday pushed back against the retailers' argument that the Fed's fee cap could only incorporate certain costs to banks that were identified by Congress. "You're climbing a really steep hill...none of us buy that," Judge Harry Edwards said to Shannen Coffin, an attorney with Steptoe & Johnson who wa

U.S. industry shows muscle in late 2013

U.S. industrial output rose at its fastest clip in 3-1/2 years in the fourth quarter as factory activity closed out the year on a strong note, a sign of the economy's brightening prospects. Manufacturing production rose a stronger-than-expected 0.4 percent in December after an out-sized 1.0 percent increase the prior month, a Federal Reserve report on Friday showed. That helped push overall output at the nation's factories, mines and utilities up 0.3 percent last month. Economists polled by Reuters had expected factory output to rise 0.3 percent, while the gain in overall industrial production matched forecasts. "It adds to the evidence that the fourth quarter was a good one," Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh. "It also provides further evidence that the slowdown in employment growth in December was a fluke." For the fourth quarter as a whole, industrial production advanced at a 6.8 percent pace, the largest quarte

Fed's Lacker says U.S. data justifies less bond buying

Signs of an improving labor market justify further reductions in monthly bond purchases by the Federal Reserve, a senior official at the U.S. central bank said on Friday. _0"> Richmond Fed President Jeffrey Lacker told journalists that a report showing weak U.S. hiring in December appeared to be "aberrational." "It would take a very significant change in the outlook for me to support not tapering, and I don't think the data we've seen so far are close to that," Lacker said following a speech to risk managers. He said a variety of labor market indicators, including the level of employment and the number of job openings, paint a picture of the sustained improvement in the job market outlook sought by the Fed. "They all line up," Lacker said. The Fed announced last month it was reducing monthly bond purchases to $75 billion from $85 billion. The program has aimed to spur a faster recovery from the 2007-09 recession. Investors expect th

US municipal bond insurance's contraction slowed in 2013

The amount of insured U.S. municipal bonds fell last year to the lowest level since the financial crisis - $12.08 billion - but Thomson Reuters data released on Friday showed the freefall may be over. _0"> Last year's decline in bond insurance of 9 percent was the smallest in a decade, the data showed. Some of the drop was related also to an overall fall in debt sales of 15.1 percent last year. Insured bonds took up a slightly larger share of new debt sales in 2013, representing 3.9 percent of all municipal bond issuance dollars compared to 3.6 percent in 2012. Before the 2008 financial crisis, insured bonds made up about half of all new debt issuance. By buying insurance, municipalities could use the guaranteeing companies' top ratings to push their borrowing costs down. When the companies' ratings were cut on exposure to risky mortgage-related debt, use of municipal bond insurance plummeted. In 2008 the amount of insured debt fell 64 percent. Only one compan

China home price rises show signs of easing in December

China's home prices continued to surge in December, though the pace of gains overall did not exceed the previous month's and rises eased in some major cities, suggesting that government tightening measures may be starting to bite. _0"> Home prices in many Chinese cities have continued to set records in the past year despite a four-year long government campaign to cool the market, adding to the threat of a price bubble and forcing some local governments into a fresh round of curbs in November. Average new home prices in 70 major Chinese cities climbed 0.4 percent in December on the month, easing from November's 0.5 percent and the fourth straight slowdown since August's 0.8 percent gain, according to Reuters calculations from data released by the National Bureau of Statistics (NBS) on Saturday. "The slower home price gains in December showed recent curbs unveiled by local governments in tier-1 and some tier-2 cities have started to stabilize market expe

'Don't hollow out financial transactions tax', says EU tax chief

The European Union's top tax official has called on member countries not to dilute proposals for a financial transactions tax in the euro zone , suggesting the bloc could instead implement the plan more gradually. _0"> Algirdas Semeta, the European Commissioner for tax affairs, told Austrian paper Der Standard he thought a deal was possible in the first half of this year even though some countries wanted to exempt sovereign bonds, interbank securities repurchase deals and pension fund transactions from the levy. Derivatives and securitized debt, blamed for deepening the financial crisis, may also escape the financial transactions tax (FTT) as policymakers fear it would harm funding for companies and the economy, a document seen by Reuters showed. The 11 countries discussing the tax, which include France and Germany but not Britain, are trying to hammer out a revised proposal for the tax, which will make banks repay some of the aid that kept them going during the 2007

China decries U.S. spending bill

China's Commerce Ministry has condemned a $1.1-trillion spending bill passed by the U.S. Congress last week over clauses that limit technological purchases from the Asian giant, saying they clash with the principles of fair trade. _0"> The bill, signed by President Barack Obama on Friday, included a cyber-espionage review process for federal purchases of technology from China , a measure incorporated last year amid growing U.S. concern over Chinese cyber attacks. In a weekend statement, China's Commerce Ministry said the move "went against the principles of fair trade" as it sought to curb purchases of Chinese technology and export of satellites and parts to China. "China is resolutely opposed," the ministry said in comments attributed to an unnamed official in its U.S. trade division. The bill sent a wrong message, did not aid exchanges and cooperation in the high-tech field and would have a negative effect on Chinese companies, besides harmin

Hochtief gets offers for Aurelis real estate arm: sources

Hochtief ( id="symbol_HOTG.DE_0"> HOTG.DE ), the German builder controlled by Spanish group ACS ( id="symbol_ACS.MC ACS.MC ), has received bids for its real estate business Aurelis in a potential 1 billion euro ($1.4 billion) deal, three people familiar with the matter told Reuters. _0"> Several private equity groups have handed in binding offers for the former Deutsche Bahn DBN.UL real estate unit that Hochtief bought in 2007 for 1.6 billion euros. _1"> Brookfield, Morgan Stanley Real Estate Investing (MSREI) and Patron Capital have looked at Aurelis, but it was not clear whether the investors are among the final bidders. The sale is part of an overhaul meant to help Hochtief cut its debt while it focuses on plans to become one of the biggest global infrastructure providers. Hochtief owns 50 percent of Aurelis, with private equity group Grove - founded by billionaire George Soros - holding the other half. "There are bids for 100 percent as

YRC Worldwide reaches tentative deal with Teamsters union

Trucking company YRC Worldwide Inc ( id="symbol_YRCW.O_0"> YRCW.O ) and the Teamsters union reached a tentative deal for a new labor contract that sets the stage for the struggling company to push ahead with a refinancing plan. _0"> YRC shares rose 22 percent in extended trading. The revised proposal would be reviewed at a meeting of local union officials on January 21 and would have to be ratified by union members, the International Brotherhood of Teamsters said in a statement. The 26,000 YRC members represented by the union had last week voted down a proposal by the company to extend their labor contract. That vote put in jeopardy efforts to refinance the company's debt, more than $1 billion of which will start coming due in February. YRC said on Friday that the tentative agreement, which comes a day after the company restarted talks with the Teamsters, addresses concerns raised by the union and contains a number of revisions to the earlier proposal.