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[IFX Darika]

European businesses feel doing business in China is getting harder, a report from the European Union Chamber of Commerce in China showed Wednesday.

In its business position paper 2009/2010, the business lobby said European businesses have observed a slowdown after China made strict regulations over the past twelve months, with some sectors reporting that the situation has actually gotten worse as industrial-policy interventions and foreign investment restrictions have increased.

The European Chamber urged China to open up its markets and to make fundamental reforms to maintain the attractiveness of China as an investment destination for European businesses. Such moves will also help China to build a sustainable economic recovery.

"European businesses believe that the current economic crisis provides a prime opportunity for China to restructure the economy and build a transparent and fair business environment for all companies, both domestic and foreign."

The European Chamber believes that China can play a proactive role in easing trade tensions by arresting the regression in the reform process observed in many industries and adopting measures to build a level playing field for all businesses in China.

"Such moves would also serve to boost investment and domestic consumption, and in turn enable the Chinese economy to achieve its latent potential."

"Over the past year, the European Chamber has noted a gradual slowdown - and in some cases a partial reversal - in the economic opening up process," said Joerg Wuttke President of the European Chamber.

However, China's experience in the last three decades has clearly proved that it is precisely in periods of crisis that increased opening and reform has bred the greatest success.

"We are convinced that this is an ideal moment for China to adopt a new and bolder cycle of reforms, a move that would ensure that China maximizes its growth potential over the next five to ten years," Wuttke said.

The European Chamber will be presenting its paper to government and regulatory agencies in China, to the European Commission and EU member state governments, and to a wide range of business organizations and companies in China and Europe.

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[IFX Darika]

Crude oil prices saw little change for a second straight session on Thursday, remaining near the $68 per barrel mark. Traders looked ahead to the jobs report on Friday

Light sweet crude for October fell to $67.96, down nine cents on the session. Prices touched as high as $69.40 after earlier hitting as low as $67.66.

The Labor Department's non-farm payroll report is expected at 8:30 a.m. ET tomorrow. Jobs are expected to drop by 225,000 jobs in August, compared to a drop of 247,000 in July. The unemployment rate is expected to inch up to 9.5%, compared to 9.4% a month earlier.

In economic news, the Labor Department reported jobless claims edged down to 570,000 from the previous week's revised figure of 574,000. Economists had been expecting jobless claims to slip to 564,000 from the 570,000 originally reported for the previous week. The Labor Department's monthly employment situation report is due tomorrow.

Later, the Institute for Supply Management said its index of activity in the service sector rose to 48.4 in August from 46.4 in July, with a reading below 50 indicating a contraction in the sector. Economists had been expecting a slightly lower reading of 48.0.

On Wednesday, the Energy Department revealed U.S. commercial crude oil inventories decreased by 400,000 barrels in the week ended August 28 to reach 43.4 million barrels. Experts were looking for a drop of about 1.9 million barrels. Total motor gasoline inventories decreased by 3.0 million barrels last week.

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[IFX Darika]

During early deals on Monday, the US dollar and the Japanese yen edged down against their major counterparts as a rise in Asian and European stock prices reduced demand for currencies perceived as safe havens.

The dollar and the yen are viewed as safe-haven currencies and both currencies gain, when investors turn risk averse and fall when risk appetite improves.

The dollar slipped to a 6-day low against the European currency, 13-day low versus the British pound, 4-day low against the Swiss franc, while edged higher to a 6-day high against the Japanese yen.

Against the European currency, the US dollar edged down during early deals on Monday. At 3:05 am ET, the dollar touched a 6-day low of 1.4363 against the euro, compared to 1.4312 hit late New York Friday. The next downside target level for the US currency is seen around 1.445.

The Sentix investor confidence indicator for the Eurozone rose to minus 14.61 in September from minus 17 in August. Economists had forecast a reading of minus 13.7. Among the sub-indicators, the current situation index moved to minus 32.75 from minus 39, while the expectations index fell to 5.50 in September from 8 in August.

The US currency that closed Friday's North American session at 1.6399 against the British pound slipped to a 13-day low of 1.6445 at 3:35 am ET Monday. The pound-dollar pair is currently trading at 1.6419 with 1.660 seen as the next target level.

Against the Swiss franc, the greenback traded down during Monday's early deals. At 3:05 am ET, the dollar-franc pair declined to a 4-day low of 1.0558, compared to Friday's closing value of 1.0603. If the pair falls further, 1.054 is seen as the next target level for the pair.

The US dollar gained ground after hitting a low of 92.95 against the Japanese yen during today's early Asian deals. At 4:15 am ET, the dollar-yen pair climbed to a 6-day high of 93.31. On the upside, 93.6 is seen as the next target level for the pair. The pair closed Friday's New York deals at 93.01.

The Japanese yen showed weakness against its major counterparts during today's early deals.

The Japanese currency edged down to a 10-day low of 153.29 against the British pound and a 6-day low of 133.89 versus the European currency during today's early deals. If the Japanese yen falls further, 154.1 against the pound and 134.5 versus the euro are seen as the next target levels. The yen closed Friday's deals at 152.53 against the pound and 133.11 against the euro.

Against the Swiss franc, the Japanese unit showed weakness during today's deals. At 4:15 am ET, the yen slipped to a 6-day low of 88.32 against the franc, compared to Friday's closing value of 87.76. The next downside target level for the Japanese yen is seen around 88.6.

The U.S. financial markets are closed today in observance of the Labor Day holiday.

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[IFX Darika]

The global economy is probably out of freefall and stabilizing faster than previously expected, European Central Bank President Jean-Claude Trichet said Monday.

"We are probably in large part of the global economy out of the period of free-fall," he said at the end of a discussion held at the Bank for International Settlements, Basel, Switzerland.

Trichet, who chairs the oversight body of the Basel Committee on Banking Supervision, said the outlook for the global economy had brightened and the recovery would be faster than anticipated.

"We have to remain prudent and cautious and it's not excluded we will have a bumpy road. Uncertainties are big," Trichet said. He stated that the current situation still requires "caution, prudence and alertness."

Further, Trichet pointed out that protectionism and imbalances in the world economy are the two main risks to a recovery.

"Authorities and the private sector will not be forgiven if we again have to cope with a situation as dramatic as the one we have had to cope with in September last year," Trichet warned.

He also noted that reforms are necessary to strengthen the financial system to avoid further risks.

Late on Sunday, leading central bank governors and banking regulators agreed on a new set of measures to strengthen supervision of the global banking system. With the new rules in force, banks would be required to earmark major part of their profits as reserve to use in tough times.

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[IFX Darika]

Thursday, the Bank of England is set to announce its interest rate decision. The central bank is widely expected to leave the interest rate untouched at a record low of 0.5% and to continue its GBP 175 billion asset purchase programme.

At 2.45am ET, the French statistical office INSEE is scheduled to issue industrial production data. Month-on-month, industrial production is forecast to rise 0.4% in July and manufacturing output growth is seen at 0.5%.

Thereafter, the Hungarian CPI and Turkish GDP reports are due. Economists forecast Hungarian annual inflation to rise to 5.8% in August from 5.1% in July. The Turkish economy is forecast to shrink 8% annually in the second quarter.

Half an hour later, consumer prices details are due from Denmark and Sweden. Sweden consumer prices are forecast to drop 1% annually in August compared to a 0.9% fall in July. Meanwhile, Danish annual inflation is expected to rise to 1.1% in August from 1% in July.

At 4.00am ET, the European Central Bank is set to issue monthly bulletin. In the meantime, Norwegian CPI and PPI reports are also due.

At 5.00am ET, a final report for the second quarter GDP is due from the Italian statistical office.

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[IFX Darika]

The dollar was stable Monday morning in New York following last week's brutal losses, as traders geared up for a busy week on the economic front.

Increased risk aversion has driven the dollar to its lowest level of the year versus a basket of major currencies, but renewed concerns about the sustainability of the economic recovery could give the buck a boost in the coming days.

Monday's economic calendar is fairly light, with President Obama giving a speech on the economy and financial regulation in New York.

However, later in the week, traders will be flooded with a spate of economic data, which could help them gain more clarity on the economy's course.

The Commerce Department's retail sales report for August, the results of the New York Federal Reserve's and Philadelphia Federal Reserve's manufacturing surveys for September and the Federal Reserve's industrial production report for August may be closely watched.

The dollar rose sharply versus the sterling, jumping almost 2 cents to 1.6550 from a monthly low set late last week.

The buck also firmed up versus the euro, holding near 1.4550. Last week, the dollar hit a 2009 low of 1.4634 as stocks continued to improve.

The European Commission kept its economic outlook unchanged from May's spring forecast. Gross domestic product or GDP is expected to fall 4% this year in both the Eurozone and in the EU.

The dollar pared some of its recent losses versus the yen, improving to 90.90 from a February low of 90.18. With the advance, the dollar stayed away from a 13-year low of 87.08 set back in January.

Meanwhile, the buck hit a weekly high of C$1.0900 versus the loonie. Early in August, the dollar hit a yearly low of C$1.0630, but has since managed to stabilize.

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[IFX Darika]

During early European deals on Monday, the US dollar rose to new multi-day highs against its major counterparts as a fall in most Asian and European stocks boosted demand for the safe haven greenback.

The dollar and the yen are viewed as safe-haven currencies and both currencies gain, when investors turn risk averse and fall when risk appetite improves.

Most of the stock markets were modestly lower today as investors look to this week's Federal Reserve meeting for more clues about the strength of the U.S. Recovery.

Early in Europe, Britain's FTSE 100 lost 0.4 percent, Germany's DAX fell 0.8 percent and France's CAC-40 dropped 0.3 percent.

In Hong Kong, the Hang Seng fell 150.60 points, or 0.7 percent, at 21,472.85 in back-and-forth trade, while South Korea's Kospi lost 0.3 percent to 1,695.50. China's Shanghai benchmark was up 0.2 percent at 2,967.01 and Australia's benchmark shed 0.3 percent.

Japanese financial markets are closed today for public holidays. Financial markets in India, Indonesia, Malaysia, Philippines and Singapore were also closed Monday for holidays.

World markets posted more gains last week as U.S. Federal Reserve Chairman Ben Bernanke said recession in the world's largest economy was "likely over."

This week, investors will watch closely what the Fed has to say about the economy and the scale of the recovery after a two-day meeting that wraps up Wednesday.

At its August meeting, the FOMC decided along the expected lines and maintained the fed funds futures rate unchanged. In its post-meeting policy statement, the Fed noted that economic activity is leveling out, an improvement from its previous opinion that the pace of contraction is slowing. There weren't any major changes to the references the committee made towards other measures.

Regarding its Treasury securities purchasing program, the central bank said the committee would gradually slow the pace of these transactions. The central bank anticipates the full amount of $300 billion to be purchased by the end of October. The FOMC reiterated its commitment to retain interest rates at exceptionally low levels for an extended period.

Against the European currency, the US dollar edged higher during early deals on Monday. At 2:35 am ET, the dollar reached a 6-day high of 1.4639 against the euro, compared to 1.4704 hit late New York Friday. The next upside target level for the dollar is seen around 1.437.

The US currency that closed Friday's North American session at 1.6246 against the British pound rose to a 19-day high of 1.6137 at 2:35 am ET Monday. The pound-dollar pair is currently trading at 1.6168 with 1.603 seen as the next target level.

British house prices increased in September on rising confidence and dwindling stock of property, results of a closely watched survey showed Monday.

Average asking prices were up 0.6% in September from August as autumn sellers raised price expectations, the property website Rightmove reported. House prices had declined 2.2% in August after rising 0.6% in July.

Meanwhile, the latest Quarterly Bulletin from the Bank of England showed today that sustainable rebalancing in the UK and the global economy depend on structural forces, including the extent to which consumers in deficit nations remain restrained and domestic demand in surplus countries pick up.

Against the Swiss franc, the greenback traded higher during Monday's early deals. At 5:15 am ET, the dollar-franc pair climbed to a 4-day high of 1.0357, compared to Friday's closing value of 1.0305. If the pair gains further, 1.055 is seen as the next target level.

The Swiss National Bank said today in a report that the M3 money supply increased 7.7% year-on-year in August, unchanged from the previous month. A year ago, the M3 money supply was up 2.5%. The M2 money supply climbed 41.8% on an annual basis in August, faster than the 41.3% growth in the previous month.

The dollar that closed Friday's New York deals at 91.46 against the Japanese yen advanced to 92.21 at 5:15 am ET. This set a 11-day high for the dollar. On the upside, 93.4 is seen as the next target level for the dollar-yen pair.

The Conference Board is scheduled to release a report on the U.S. leading index for August at 10 AM ET. The consensus estimate calls for a 0.7% increase in the leading indicators index for the month.

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[IFX Darika]

Singapore's consumer price index dropped 0.3% year-on-year in August, slower than than a 0.5% fall in the preceding month, a report by Statistics Singapore said Wednesday. Economists expected a 0.4% fall.

Housing costs fell 1.6%, due to lower electricity and gas tariffs and cheaper liquefied petroleum gas (LPG). Transport and communication costs fell 0.4%, mainly due to cheaper petrol prices. Excluding accommodation costs, the consumer price index declined 0.9%.

Month-on-month, consumer prices were up 0.4%, owing to higher costs of transport and communication, clothing and footwear, as also housing and stationery items. Excluding accommodation costs, consumer prices were up 0.5%. Meanwhile, after adjusting for seasonal effects, consumer prices were up 0.4% on a monthly basis in August.

In the first eight months, consumer prices rose 0.5% compared to last year.

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[IFX Darika]

Tuesday, Malaysian Prime Minister Najib Razak said the government intends to reduce operating expenditure and to broaden its tax base. However, the reduction in expenditure would not affect the efficiency of the government, said Najib.

The government's pump priming measure is currently costing a billion ringgit a month. The government is set to present its 2010 budget next month.

Najib, who is also the finance minister, told reporters that the government is mindful of the need to rein in the fiscal deficit. The government expects the budget deficit to fall to 7.6% of GDP this year.

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