Week of November 18, 2012 thru November 24, 2012

China Oct House Prices Rise Marginally; Govt Curbs Cap Gains

BEIJING (MNI) - The central government's tough line on housing market curbs capped the rise in prices again in October, official data released Sunday indicated.

Chinese house prices rose in October on a sequential basis for a fifth month in a row, though prices nationwide edged up just 0.08%, according to a floor-space weighted average of prices in the 35 largest cities calculated by MNI.

That compares with compared with September's 0.07% gain, the 0.13% rise seen in August, July's 0.15% rise and a 0.09% rise seen in June.

On a year-on-year basis, prices were down for a ninth straight month, dropping 1.02% y/y in October, a better reading than -1.23% in September. The October reading also compares with August's -1.30% y/y, July's -1.43% y/y and June's -1.58%.

US News Events Calendar

--Meetings & Events of Interest to Subscribers



20-Nov 1400/0900 Richmond Federal Reserve Bank Pres. Jeffrey Lacker speaks at the Shadow Open Market Committee's Fall Symposium which is titled "The Fed's Monetary Policy Adrift" and after will answer questions, in New York. www.shadowfed.org

20-Nov 1715/1215 Federal Reserve Chairman Ben Bernanke speaks to the Economic Club of New York followed by 20 minutes of questions from former Fed Gov.

US Tsy: FX Swaps,Fwds Exempted From Regultn Under Commods Act


US Debt Offering, Auction Calendar for Tsy and Agency Issues

November 16

Source: U.S. Treasury, Fannie Mae, Freddie Mac Amounts in billions of U.S.

US Tsy's Geithner/BBG TV:Must Avoid Damage to Econ,Stakes High

-Had Good, Constructive Meeting w/Hill Leaders, Committed to Deal -Preventing Middle Class Tax Increase Most Important Thing to Diffuse Risks

WASHINGTON (MNI) - Treasury Secretary Tim Geithner said the administration had "constructive" talks with Hill leaders Friday on preventing the fiscal cliff, and he stressed that the goal must be to prevent damage to the economy, and extending middle class tax cuts are the best way to achieve that.

In the transcript of an interview with Al Hunt, host of Bloomberg's Political Capital, Geithner said leaders are committed to reaching a deal, which he said much lock in up front savings.

"It was a good meeting, and the tone was very good.

Flickers Of Optimism Detected On US Hill After Budget Meeting

-President Obama, Hill Leaders Agree To Use Word 'Constructive' -House, Senate Leaders Say Talks Got Off To Good Start

WASHINGTON (MNI) - There is one timeless, even cosmic, rule of budget negotiations. It is this: the first meeting is always the easiest one.

So it comes as little surprise that both congressional leaders and President Obama left their first budget meeting Friday saying that the session was "constructive" and the two parties must work together for the good of the country.

Obama met Friday morning with House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and House Minority Leader Nancy Pelosi for more than an hour in the White House.

Lockhart: Aggressve B-Sheet Use Approp For Some Time;Justified

-Can't Say Remotely Close To Substantial Employment Improvement -Use Of Balance Sheet Tools Justified Even If Fiscal Cliff Averted -Warns Lawmakers Against Any Action That Compromises Econ Recovery

WASHINGTON (MNI) - Atlanta Federal Reserve Bank President Dennis Lockhart Friday said the central bank's aggressive use of its balance sheet to speed up the economic recovery will remain appropriate "for some time," even if lawmakers are successful in addressing the threat of the looming fiscal cliff, due to a growth rate that is still not up to speed.

And on the subject of the approaching deadline of expiring tax reliefs and spending cuts, Lokchart had a stark warning for the administration and Congress

-- "if the fiscal cliff is mishandled, the economic

Financial Trouble For FHA Not Unexpected But Still Worrisome

By Ian McKendry

WASHINGTON (MNI) - The announcement Friday that the Federal Housing Administration's Mutual Mortgage Insurance Fund was in financial trouble was known ahead of time as housing experts knew their book of business from 2007 and 2009 had deteriorated but the details of the shortfall and remedies that were going to be taken were not yet known.

As it turns out, the FHA will raise mortgage insurance premiums by 10 basis points, sell off some distressed loans and do what they can to help keep struggling borrowers in their home.

In the meantime, the Department of Housing and Urban Development said it had sufficient funds to provide for loan losses in the short-term and did not need immediate funds from the Department of Treasury.

Miller Q&A: In No One's Interest to Allow Fiscal Cliff To Happen

CHICAGO (MNI) - U.S. Treasury Undersecretary for Domestic Finance Mary Miller Friday said it was "not in anyone's interest to allow the fiscal cliff to happen."

"I think you know that would have a very negative outcome," Miller told a group of international bankers and academics at a Chicago Federal Reserve Bank conference.

In response to a question about Fannie Mae and Freddie Mac, Miller was fairly upbeat about the housing market outlook, saying the recovery in housing will provide a better platform for housing finance reform.

In her prepared speech, Miller said she expected the Consumer Financial Protection Bureau to finalize the qualified mortgage rule, known as 'QM' in the coming weeks.

FXWRAP: Dollar Up Slightly vs Euro, Yen; Watches Stock Swings

NEW YORK, Nov 16 (MNI) - The dollar notched up modest gains vs. the euro and the yen in morning dealings Friday, but proved able to only hang onto the gains vs. yen by the end of the day.

Euro-dollar was changing hands at $1.2725 in afternoon dealings Friday, the euro slightly below its early level of the day after traversing a $1.2690/1.2752 U.S. hours range.

Dollar-yen meantime was faring better, holding at Y81.26 in afternoon dealings, modestly above its Y81.14 early level of the day after traversing Y81.05/45 during U.S. hours.

Afternoon dealings were at a slow pace as a choppy week wound down, traders keeping a close eye still on U.S.