U.S. Treasuries Are Little Changed on Growth Concern as Stocks Decline

(Bloomberg) -- Treasuries were little changed as
global stocks fell and speculation increased that losses tied to
subprime mortgages will slow economic growth.

Ten-year notes may extend their gains into a fifth week
after the risk of owning corporate bonds rose and a report showed
employers added fewer jobs than expected last month. Investors
increased bets the Federal Reserve will cut interest rates as
soon as October.


Read more at Bloomberg Bonds News

Gold Little Changed in Asia as Dollar Weakness Boosts Appeal; Silver Rises

(Bloomberg) -- Gold in Asia was little changed near a
one-week high, supported by investors demand for the precious
metal as an alternative asset after the dollar weakened on signs
the U.S. economy might slow. Silver rose.

Gold usually moves in the opposite direction to the dollar,
which fell to a four-month low against the Japanese yen and also
traded near a record low against the euro today. Speculation that
a slowing U.S. economy may keep the Federal Reserve from raising
interest rates also weakened the dollar and boosted the appeal of
the precious metal as alternative investment.


Read more at Bloomberg Commodities News

Gold, Silver Rise as Lack of Higher U.S. Interest Rates May Erode Dollar

(Bloomberg) -- Gold and silver rose in New York on
speculation a slowing U.S. economy may keep the Federal Reserve
from raising interest rates, weakening the dollar and boosting
the appeal of precious metals as alternative investments.

Five of the past six bear markets for the dollar have
resulted in a higher gold price. The metal is up 6.7 percent
this year as the dollar has declined to a record low against the
euro. Investment in StreetTracks Gold Trust, an exchange-traded
fund backed by bullion, reached a record 507 tons on Aug. 1.


Read more at Bloomberg Commodities News

TREASURIES-Stocks turn bonds negative

(Reuters) - A government report showed the U.S. economy grew at a
stronger-than-expected annual rate of 3.4 percent in the second
quarter, rebounding from a dismal start to the year.




The report's inflation gauge plunged, indicating that the
Federal Reserve now has more leeway if it needs to cut
benchmark interest rates in the second half of this year.


Read more at Reuters.com Bonds News

Bernanke's Forecast of Stronger Growth May Be Threatened by Market Tumult

(Bloomberg) -- The week's turmoil in financial
markets casts doubt on the Federal Reserve's forecast of a
gradual U.S. economic recovery in the second half, raising the
odds it will need to shift its focus to spurring growth from
fighting inflation.

The turbulence, as stocks suffered their worst drop in five
months while corporate borrowing costs soared, threatens a
triple whammy for the economy. It robs investors of spending
power, makes business investment more expensive and may prolong
the housing recession.


Read more at Bloomberg Stocks News

U.K. Pound Advances for Sixth Week on GDP Report, Outlook for Higher Rates

(Bloomberg) -- The pound posted its longest winning
run against the dollar in more than a year after a report showed
U.K. economic growth unexpectedly quickened in the second
quarter, fueling expectations of higher interest rates.

The U.K. currency rose to a 26-year high on speculation the
Bank of England will raise rates half a percentage point from
5.75 percent by year-end while the Federal Reserve stays on hold.
The pound also advanced as the Fed trimmed its forecasts for
economic growth and Bear Stearns Cos. reported losses on hedge
funds that bet on bonds backed by subprime loans.


Read more at Bloomberg Currencies News

Dollar Falls to Record Low Versus Euro on Concern Subprime Losses to Mount

(Bloomberg) -- The dollar fell to a record low
versus the euro and headed for a sixth straight weekly drop as
concern increased that losses in subprime mortgages will worsen
a slowdown in U.S. housing and curb economic growth.

The currency also tumbled versus the yen as investors
exited riskier bets. Federal Reserve Chairman Ben S. Bernanke
said yesterday there will be ``significant financial losses'' on
mortgages given to people with poor credit histories.


Read more at Bloomberg Currencies News

Treasuries Advance on Speculation Subprime Losses to Damp Economic Growth

(Bloomberg) -- Treasuries climbed on speculation
rising subprime mortgage defaults will worsen a slowdown in the
housing market and curb economic growth.

U.S. 10-year notes headed for a second weekly gain as funds
including two at Bear Stearns Cos. incurred losses on securities
backed by home loans. Federal Reserve Chairman Ben S. Bernanke
said losses on investments linked to mortgages given to people
with poor credit histories may total $100 billion. The risk of
owning European corporate bonds rose to a two-year high today.


Read more at Bloomberg Bonds News

Gold, Silver Gain as Dollar's Slump Boosts Metals' Appeal as Investment

(Bloomberg) -- Gold and silver gained for a second
day in New York on speculation a decline in the value of the
dollar will boost the appeal of precious metals as alternative
investments.

Gold generally moves in the opposite direction of the
dollar. The U.S. currency fell to a record against the euro
yesterday on speculation that interest rates will rise faster in
Europe after Federal Reserve Chairman Ben S. Bernanke scaled
back forecasts for U.S. economic growth.


Read more at Bloomberg Commodities News

UPDATE 2-Bernanke says optimistic on Basel II consensus

(Reuters) - WASHINGTON, July 19 - Federal Reserve Chairman
Ben Bernanke said on Thursday he remains optimistic top U.S.
banking regulators will reach a consensus on an international
capital adequacy plan under the Basel II framework.




"I think the Basel II approach, with perhaps with some
modifications but in essence what was agreed upon with the
international banking authorities, is the right approach for
providing that kind of capital base protection," Bernanke told
the Senate Banking Committee.


Read more at Reuters.com Bonds News

U.K. Pound May Advance Versus Dollar on Outlook for BOE Rates, U.S. Growth

(Bloomberg) -- The pound may rise against the dollar
on speculation the Bank of England will keep raising interest
rates as the Federal Reserve keeps borrowing costs on hold.

The U.K. currency advanced to a 26-year high versus the
dollar after the Fed yesterday trimmed its forecast for economic
growth and Bear Stearns Cos. reported losses on hedge funds that
bet on bonds backed by subprime mortgages. Investors expect the
BOE to raise rates half a percentage point by year-end, futures
trading shows.


Read more at Bloomberg Currencies News

Australia Dollar Trades Near 18-Year High as Prices of Commodities Gain

(Bloomberg) -- The Australian dollar traded near an
18-year high against the U.S. currency and the strongest in 16
years versus the yen as the prices of raw materials the nation
exports rose.

The currency gained for a sixth day against the yen as a
measure of six metals on the London Metal Exchange, including
copper and aluminum, climbed 0.7 percent yesterday. Commodity
exports add about 14 percent to Australia's gross domestic
product. It also advanced a second day against the U.S. dollar
after the Federal Reserve lowered its economic growth forecast.


Read more at Bloomberg Currencies News

Brazil's Real Advances as Concern About Rising U.S. Interest Rates Eases

(Bloomberg) -- Brazil's currency rose to a seven-
year high as concern eased that the Federal Reserve will raise
benchmark U.S. interest rates.

A U.S. report showed consumer prices rose at the slowest
pace in five months, damping speculation the Fed will raise
borrowing costs and helping maintain the spread between Brazilian
and U.S. rates that has lured money to the South American
country.


Read more at Bloomberg Currencies News

US shares extend losses on Bernanke testimony

(Reuters) - U.S. stocks added to losses on Wednesday as Federal Reserve Chairman Ben Bernanke's comments to Congress about the economy, inflation and housing added to Wall Street jitters.

In addition, Bernanke said the Fed expects to see economic growth expand at 2.25 percent to 2.5 percent this year and 2.5 percent to 2.75 percent in 2008, one-quarter percentage point below the Fed's estimate six months ago.


Read more at Reuters Africa

Dollar Slumps to Record Low Against Euro on Bear Stearns Subprime Losses

(Bloomberg) -- The dollar dropped to a record low
against the euro after Bear Stearns Cos. reported hedge fund
losses, fueling speculation investors will spurn U.S. assets as
the economy slows.

The currency also fell against the yen as investors scaled
back carry trades, where they buy higher-yielding securities with
money borrowed in Japan. Federal Reserve Chairman Ben S. Bernanke
may be asked about financial industry losses caused by mortgage
defaults when he testifies before Congress today.


Read more at Bloomberg Currencies News

Senators urge US agencies to finalize Basel II

(Reuters) - The two senators sent the letter to the heads of the
Federal Reserve, Comptroller of the Currency, Federal Deposit
Insurance Corp. and Office of Thrift Supervision, who are
expected to meet later this month to try to hammer out their
differences.




Read more at Reuters.com Bonds News

UPDATE 1-U.S. June industrial production up 0.5 pct

(Reuters) - WASHINGTON, July 17 - U.S. industrial output rose
by a slightly more-than-expected 0.5 percent in June as
production for automobiles surged 2.5 percent during the month,
a Federal Reserve report on Tuesday showed.




Analysts polled by Reuters were expecting to see a 0.4
percent rise in June. Total output at the nation's factories,
mines and utilities fell by a revised 0.1 percent in May
compared with a flat reading initially.


Read more at Reuters.com Economic News

Dollar Advances Versus Yen After U.S. Core Producer Prices Climb in June

(Bloomberg) -- The dollar gained against the yen
after a government report showed a measure of prices paid to
U.S. producers rose more than analysts forecast.

Traders bought dollars as signs of quicker inflation
bolstered speculation the Federal Reserve will refrain from
lowering its benchmark lending rate this year.


Read more at Bloomberg Currencies News

U.K. Pound Rises to 26-Year High Versus Dollar on Outlook for BOE Rates

(Bloomberg) -- The pound rose to a 26-year high
against the dollar on speculation the Bank of England will keep
raising interest rates while the Federal Reserve stays on hold.

The U.K.'s currency gained for a second day before a
government report tomorrow that's forecast to show that
inflation has exceeded the BOE's 2 percent target for 14 months.
The pound last week had its biggest gain in three weeks against
the dollar on speculation a slump in the U.S. subprime mortgage
market will curb growth in the world's biggest economy.


Read more at Bloomberg Currencies News

Treasuries Rise on Subprime Mortgage Crisis, Outlook for Economic Slowdown

(Bloomberg) -- Treasuries rose as the subprime
mortgage crisis sent investors to the safety of U.S. government
debt and raised concern that housing weakness will slow the
world's largest economy.

Benchmark 10-year note yields dropped this week after
Standard & Poor's and Moody's Investors Service warned about the
credit quality of subprime mortgages. Federal Reserve Chairman
Ben S. Bernanke may comment on housing during congressional
testimony next week.


Read more at Bloomberg Bonds News