India's Local Bond Rating to Be Kept at Non-Investment Grade, Moody's Says

(Bloomberg) -- India's local currency bonds will
keep a non-investment rating as the government isn't reducing
its budget deficit fast enough, Moody's Investors Service said.

The rating ``remains constrained'' at Ba2, two notches
below investment grade and the same level as Armenia and Jamaica,
as state debt equal to three-quarters of the economy ``leaves
public finances vulnerable,'' Moody's lead sovereign analyst for
India, Aninda Mitra, said in an e-mail to Bloomberg News.


Read more at Bloomberg Emerging Markets News

CORRECTED - UPDATE 1-Hidden subprime losses may mirror Japan bank crisis

(Reuters) - NEW YORK, July 27 - Investors and banks holding
on to U.S. subprime mortgage bonds in hopes of a recovery in
value may make losses worse, mirroring the Japanese banking
crisis in the 1990s, according to a new report.




The Japanese banking crisis, triggered in the early 1990s
by a slumping property market and brokerage collapses, led to a
decade-long credit crunch. The government subsequently had to
step in to stabilize the banking system by injecting public
money into top banks.


Read more at Reuters.com Bonds News

Buy Global Stocks, U.S. Mortgage-Backed Credit, HSBC Strategists Say

(Bloomberg) -- Investors should buy stocks worldwide
following last week's market sell-off, and add to holdings of
U.S. mortgage-backed bonds, according to strategists at HSBC
Holdings Plc.

A team in charge of asset allocation strategy raised their
recommended holding of global stocks to 67.6 percent of total
assets, according to report sent to clients today. That's up from
a previous 60.1 percent, or a ``benchmark'' position.


Read more at Bloomberg Stocks News

Paulson's Yuan Appreciation Anticipated by Pictet, Western Asset's Trades

(Bloomberg) -- Investors from Switzerland to
California are banking on U.S. Treasury Secretary Henry Paulson
convincing China to let its yuan appreciate more than 5 percent
in coming months.

Western Asset Management Co. in Pasadena and Pictet Asset
Management in Geneva are buying contracts tied to the future
value of the yuan, driving the price so high that the currency
must strengthen at least 5.5 percent in the next 12 months
before they see any profit. The so-called non-deliverable
forwards are rising at the fastest pace in two years.


Read more at Bloomberg Currencies News

Investors Abandon Bank of Ireland, Allied Irish Shares on Housing Slump

(Bloomberg) -- Investors are abandoning Irish stocks
as rising interest rates hurt western Europe's fastest-growing
economy of the past decade.

The country's ISEQ Overall Index, a third of which is made
up of Ireland's three biggest mortgage lenders, has slumped 9.9
percent in 2007. It's the worst performer among equity benchmarks
for the 13 nations sharing the euro, and the only one besides
Italy's and Belgium's that has fallen this year.


Read more at Bloomberg Bonds News

China's Debt Rating Raised to A1 by Moody's on Foreign Reserves, Economy

(Bloomberg) -- China's debt rating was upgraded by
Moody's Investors Service, citing the country's swelling
foreign-currency reserves, surging exports and improvements to
the banking system.

The country's long-term foreign-currency rating jumped to
A1, the fifth-highest ranking, from A2, the ratings company said
in a statement today.


Read more at Bloomberg Emerging Markets News

Weekly Charts Suggest Euro's Rally to Record High Is Over, Citigroup Says

(Bloomberg) -- Investors should sell the euro
against the U.S. dollar because technical charts signal the
currency may slide to $1.3400, said analysts at Citigroup Global
Markets Inc.

``There is a danger that a deeper correction toward $1.3400
may be on the cards,'' analysts led by New York-based global head
of currency strategy Tom Fitzpatrick wrote in a research note
yesterday.


Read more at Bloomberg Currencies News

UPDATE 1-Shanghai Auto to issue up to 8 bln yuan in bonds

(Reuters) - Shanghai Automotive shares closed up 4.8 percent at 22.93
yuan on Wednesday, outperforming a 2.7 percent gain in the
Shanghai benchmark index .




"Investors are optimistic about the prospects for Shanghai
Auto's own-brand vehicle plan, as the bond sale would provide
substantial funding for the project," said Zhao Shengli, an
analyst with Galaxy Securities.


Read more at Reuters.com Bonds News

Yen May Rebound as Volatility Erodes Carry Trades, Shinko's Suzuki Says

(Bloomberg) -- The yen may gain to more than a two-
month high of 119.50 against the dollar as rising options
volatility prompts traders to exit carry trades, said Kengo
Suzuki, currency strategist at Shinko Securities Co. in Tokyo.

``Investors aren't being compensated enough for the risk of
putting on dollar-yen carry trades,'' said Suzuki. ``It's
possible for the yen to head higher against the dollar and this
could spread to other currencies.''


Read more at Bloomberg Currencies News

Japanese Corporate Bond Risk Approaching a Peak, JPMorgan Chase Forecasts

(Bloomberg) -- The price to protect Japanese debt
from default is close to a peak because there will be a limited
impact on the economy from U.S. mortgage defaults, according to
JPMorgan Chase & Co.

Investors should sell credit-default swaps tied to 1 billion
yen ($8.3 million) of debt in the iTraxx Japan Series 7 Index
once the price reaches 3 million yen, said Mana Nakazora, chief
credit analyst at JPMorgan in Tokyo. The cost to guard against
defaults among 50 investment-grade companies on the index rose to
2.74 million yen yesterday from 1.6 million yen on May 17,
according to Credit Suisse Group.


Read more at Bloomberg Bonds News

Japan's 10-Year Bonds Decline as Yields Near Six-Week Low Deter Investors

(Bloomberg) -- Japanese government bonds dropped,
ending their longest rally since November, as 10-year yields
near the lowest in more than six weeks deterred investors from
buying the securities before a government auction this week.

Investors saw little reason to extend a five-day rally
without evidence growth in the world's second-largest economy is
slowing. The yield premium on 20-year bonds relative to five-
year securities reached the most in two months on speculation
traders will sell to protect against possible losses at an
auction of the longer-maturity debt in two days.


Read more at Bloomberg Bonds News

Investor Confidence in High-Yield Loans Deteriorates, LevX Index Shows

(Bloomberg) -- Investor confidence in high-risk,
high-yield loans deteriorated for the third straight day,
according to traders of credit-default swaps on European debt.

The iTraxx LevX Index of contracts on loans to 35 companies
today fell 0.1 to 97.90, reversing earlier gains, according to
Deutsche Bank AG. The index fell to 97.50 last week, the lowest
since it started trading in October.


Read more at Bloomberg Bonds News

Bonds sag on Dow over 14,000 and inflation worries

(Reuters) - Investors also sold bonds as inflation worries were stirred by an unexpectedly large rise in the core U.S. Producer Price Index for June. Inflation erodes the value of bonds.




The decline in Treasury prices was offset by continuing worries about subprime mortgages and an industry report showing the housing market is still stuck in a slump.


Read more at Reuters.com Hot Stocks News

U.K. Pound Rises to 26-Year High Against Dollar After June Inflation Data

(Bloomberg) -- The pound rose to a 26-year high
against the dollar after a report showed U.K. inflation exceeded
the Bank of England's 2 percent limit for a 14th month in June.

The U.K. currency posted its biggest gain in a week on
speculation the BOE will keep raising interest rates while the
Federal Reserve stays on hold, increasing the attraction of
pound-denominated assets. Investors raised bets on how high BOE
policy makers will lift borrowing costs following the release of
the inflation report, futures trading shows.


Read more at Bloomberg Currencies News

UPDATE 1-Coffeyville refinery shut to Sept, debt rating cut

(Reuters) - NEW YORK, July 16 - Independent U.S. refiner
Coffeyville Resources' debt ratings were cut on Monday as an
industry source said the company's flooded Kansas refinery was
unlikely to restart until early September.




Moody's Investors Service pushed Coffeyville's corporate
family rating deeper into speculative territory, cutting it
from B2 to B3 amid uncertainty over the losses Coffeyville
faces from the shutdown of the refinery and an associated oil
spill.


Read more at Reuters.com Bonds News

Australia's S&P/ASX 200 Index Drops, Led by Rio Tinto Group, BHP Billiton

(Bloomberg) -- Australian stocks fell. Rio Tinto
Group dropped for a second day on concern its $38.1 billion bid
for Alcan Inc. will increase its debt, while BHP Billion Ltd.
declined on concerns recent gains have outstripped earnings.

``With Rio, there's no doubt takeovers are generally more
positive for the acquired stock than the acquirer,'' said Shane
Oliver, who helps manage the equivalent of $83 billion at AMP
Capital Investors in Sydney. ``The market may be concerned about
the increased debt factor.''


Read more at Bloomberg Stocks News

Market watchers won't rule out takeover of Macy's

(Reuters) - In recent weeks, speculation has surfaced that the operator of the Macy's and Bloomingdale's store chains might be a takeover target for private equity firms.




Investors have placed bullish bets in the options markets by buying Macy's calls. For the past three Fridays, Macy's call volume was heavier than usual as investors hoped to profit from a share rally.


Read more at Reuters.com Bonds News

Treasuries Decline Second Day as Stocks Advance, Concern Over Risk Eases

(Bloomberg) -- Treasuries fell for a second
straight day as stocks advanced, suggesting investors are
becoming less averse to risky assets.

Expectations for higher corporate profits and takeover
speculation eased concern a housing market slump will curb
economic growth. Treasuries advanced the most since February on
July 10 as Standard & Poor's and Moody's Investors Service
warned about the credit quality of subprime mortgages.


Read more at Bloomberg Bonds News

Moody's May Cut $5 Billion of CDOs Backed by Subprime Mortgage Securities

(Bloomberg) -- Moody's Investors Service may cut $5
billion of collateralized debt obligations after lowering the
ratings of the subprime mortgages that make up the securities.

A downgrade would affect 184 pieces of 91 CDOs, representing
about 3.6 percent of rated CDOs containing asset-backed
securities, Moody's said in a statement today. Moody's yesterday
sliced ratings on $5.2 billion of subprime bonds that back the
CDOs.


Read more at Bloomberg Bonds News

Yen Drops Versus Euro as Advance in Stocks Signals Return to Risky Assets

(Bloomberg) -- The yen fell versus the euro, dollar
and a dozen other major currencies as strength in U.S. stocks
signaled investors are returning to risky assets.

Investors sold the yen as they resumed so-called carry
trade bets, where they borrow in Japan to purchase securities in
countries where interest rates are higher. The yen gave up gains
posted earlier today and yesterday when investors fled risky
trades following Moody's Investors Service's move to cut ratings
on $5.2 billion of bonds backed by U.S. subprime mortgages.


Read more at Bloomberg Currencies News