Week of December 11, 2011 thru December 17, 2011

China PBOC To Sell CNY38 Bln In 1Y Paper On Tuesday

BEIJING (MNI) - The People's Bank of China announced it will sell CNY38 billion in one-year paper as part of its open market operations on Tuesday.

A total of CNY13 billion of central bank paper and bond repurchase agreement is set to mature this week.

China Yuan Ends Up 6.3606 Against Dlr vs 6.3647

BEIJING (MNI) - The Chinese yuan tested the down limit on Monday but ended up at 6.3606 against the U.S. dollar on the over-the-counter market Monday, after hitting down limit in the previous eighth straight day.

The close compares with last Friday's 6.3647.

The yuan trade between 6.3613 and 6.3582 on Monday.

The People's Bank of China set the yuan's central parity rate at 6.3297 this morning, higher than last Friday's 6.3352.

In the offshore non-deliverable yuan forward market, the one-year contract was trading at 6.4070 against the greenback in late afternoon, compared with last Friday's close of 6.4030.

The yuan's daily trading band against the greenback is currently set at 0.5%.

[TOPICS: M$Q$$$,M$A$$$,MMQPB$]

LatamWatch: Argentina Pres Starts 2nd Term; Reserves Recover

* Brazil National Monetary Council Could Ease Macroprudential Measures * Mexico Construction Seen Bolstering Industrial Production

BUENOS AIRES, MEXICO CITY and SAO PAULO, Dec 12 (MNI) - Argentine President Cristina Fernandez de Kirchner this week starts her second four-year term, possibly with measures to deepen a pro-consumption economic model that has brought steady expansion since 2003.

The president, however, will face challenges in sustaining the growth, with forecasts suggesting expansion could slow to less than 4% next year from an 8% average over the past eight years.

The downturn is a response to a decline in global commodities demand and prices as crises hit the global economy.

Germany's Wholesale Prices Rebound 0.7% M/M In November

November: +0.7% m/m, +4.9% y/y October: -1.0% m/m, +5.0% y/y September: +0.3% m/m, +5.7% y/y August: +0.1% m/m, +6.5% y/y July: -0.6% m/m, +8.2% y/y


FRANKFURT (MNI) - Wholesale prices in Germany rebounded in November, with all major components more expensive, the Federal Statistical Office reported Monday.

After a drop in October, wholesale prices rose 0.7% in November, the biggest jump since March, lifting prices 4.9% on the year.

As Brent crude prices saw a modest recovery on average in November, solid fuel and mineral oil wholesale prices increased 2.5% on the month to give an annual rise of 16.8%.

Food, drink and tobacco were 0.6% costlier than in October and up 3.0% on the year.

ASIA FX: US Dollar Gains Marginally as Euro Continues to Slip

SINGAPORE, Dec. 12 (MNI) - The U.S. dollar traded slightly firmer in the Asian session Monday, as the euro continued to weaken on lingering concerns about debt problems in the eurozone and as investors braced for possibly fresh ratings actions on European sovereign debt.

Dealers said with last week's EU Heads of State Summit now over, market players were shifting their focus to events unfolding this week that might drive risk sentiment.

In particular was last week's news that ratings agency Standard & Poor's had placed the sovereign ratings on 15 eurozone countries on CreditWatch with negative implications.

S&P is expected to complete its review of the ratings this week, with some expecting it as early as later today.

Japan Nov Consumer Confidence Posts 1st Drop in 7 Months

-- Japan Nov SA Consumer Confidence Index 38.1 Vs Oct 38.6
-- Japan Govt Cuts View: Consumer Confidence Nearly Flat

TOKYO (MNI) - Japan's consumer confidence fell for the first time in seven months in November as the global economic slowdown and the strong yen clouded prospects for job creation and income growth, data released by the Cabinet Office showed on Monday.

The closely watched index stood at 38.1 in November, down from 38.6 in October, when it was unchanged. Confidence had been gradually recovering since April, when it slumped to 33.1, the lowest since April 2009, in the aftermath of the March 11 earthquake disaster.

China Econs Warn On Recession As Euro Crisis Drags On: Press

BEIJING (MNI) - Chinese government economists have joined the ranks of sceptics arguing that the latest efforts by European leaders to resolve the single currency union's debt crisis are inadequate, and that China needs to prepare for another recession in the advanced economies.

State Information Center economist Zhang Monan said the agreements finalized at last week's contentious European summit won't fundamentally resolve the crisis and warned that a wave of sovereign downgrades is inevitable in the coming year.

She said the imposition of overly-aggressive austerity packages on European economies will trigger greater social and political turmoil in the region.

LatamWatch: Argentina Pres Starts 2nd Term; Reserves Recover

* Brazil National Monetary Council Could Ease Macroprudential Measures * Mexico Construction Seen Bolstering Industrial Production

China PBOC Sets Dlr-Yuan Parity Higher At 6.3297; +3.71% Y/Y

BEIJING (MNI) - The People's Bank of China set the yuan's central parity rate against the U.S. dollar at 6.3297 on Monday, higher than last Friday's 6.3352.

Today's parity is below the record high of 6.3165 set on Nov.4.


Today fixing 6.3297 8.4549 8.1521 Prev. fixing 6.3352 8.4521 8.1529 Prev.

Japan Nov Corp Goods Price Up Slightly, Global Demand Slow

-- Japan Nov CGPI +1.7% Y/Y; MNI Poll Median Forecast: +1.5%
-- Japan CGPI Posts 14th Straight Y/Y Rise; Oct Revised +1.6%

TOKYO (MNI) - Japan's corporate goods price index rose 1.7% from a year earlier in November, marking the 14th consecutive y/y rise with the pace of increase little changed from a downwardly revised +1.6% in October amid slowing global demand, data released by the Bank of Japan Monday showed.

Petroleum product and processed food prices marked slightly larger year-on-year gains in November than in October while year-on-year drops in transport equipment and general machinery prices widened last month.