Milan outperforms as European stocks end week on positive note

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon)

* Pan-European STOXX 600 index up 1.6 pct

* Italian lenders biggest gainers in strong bank sector

* Autos top sectoral gainer after China data

* Telecoms firm TDC soars after takeover approach

By Danilo Masoni and Atul Prakash

MILAN/LONDON, July 8 European shares rose on Friday, ending a week of losses on a positive note with Milan outperforming thanks to a rally in its battered baking stocks.

Equities got a boost late in the session from a stronger-than-expected jobs report in the United States.

The pan-European STOXX Europe 600 rose 1.6 percent but still ended the week with a loss of 1.5 percent due to persistent worries over the economic and political fall-out of Britain's vote on June 23 to leave the European Union.

"The concerns of the Brexit are reflected quite well in share prices so the question is how much pain (there) will be before a relief. It's probably still a little bit away," Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.

"It will also depend on a rebound in banks as the systemic risk due to Brexit is certainly a concern and credit risks coming from Italy are weighing on the sector," he said.
Milan's blue chip index outperformed the region to gain 4.1 percent with banks Intesa Sanpaolo Banco Popolare and UniCredit posting gains of between 8.7 and 18.4 percent.

Capital weakness and a mountain of bad loans have put Italian banks at the centre of investors' immediate concerns following the shock UK vote. But traders on Friday said there was some optimism that a solution to help Italian banks cut their soured loans could be reached.

"We have to monitor the situation very closely but if and when we'll get a solution, it will be a very interesting opportunity for financials but also European equities in general," Saxo Bank head of equity strategy Peter Garny said.

The European banking index, the worst sectoral performer since Brexit and so far this year, rose 3.8 percent.

The auto index rose 3.9 percent, making it the biggest sectoral gainer after data showed passenger vehicle sales in China rose 19.4 percent in June.

Germany's auto-heavy DAX index rose 2.2 percent with BMW, Daimler and Volkswagen gaining 3.6 to 4.3 percent.

Shares in Danish telecoms group TDC jumped more than 9 percent after it said it had rejected a potential takeover approach believed to be from private equity firm Apollo Global Management.

Reuters (Reporting by Danilo Masoni; Editing by Mark Heinrich)

Bank earnings loom large as stocks near record

The focus on Wall Street will shift to corporate earnings next week after a strong June jobs report on Friday gave investors confidence that the U.S. economy was on stable footing and left the S&P 500 within a whisper of a new closing record high.

Earnings next week are expected from big banks JPMorgan Chase (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) as well as other financial companies such as BlackRock (BLK.N) and PNC Financial Services (PNC.N). Earnings for the sector are expected to decline 5.4 percent.

If bank earnings come in better than expected, the S&P 500 .SPX is likely to push through its record highs set in May 2015 after several failed attempts, as Friday's jobs number helped push the benchmark index to less than one point from its closing record high of 2,130.82.

"Banks are definitely in the spotlight," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "There is some trepidation in the market going into this earnings season, the quarter economically was not particularly strong."
Financials have been the worst performing of the 10 major S&P sector groups this year, down nearly 6 percent, as they were hit by reduced expectations for a U.S. interest rate hike by the Federal Reserve and uncertainty in the wake of the vote by Britain to leave the European Union, or "Brexit."
Second-quarter earnings overall are expected to decline 4.7 percent, according to Thomson Reuters data, the fourth straight quarter of negative earnings, but up slightly from the 5 percent decline in the first quarter.

Investors will be looking for confirmation this quarter that earnings are starting to turn, with analysts anticipating a return to growth in the back half of the year, starting with expectations for a 1.8 percent increase in the third quarter.

"What we are hoping ... is that we are starting to see that we have stepped out of the trough in terms of the economy from the first quarter," said Jim Davis, regional investment manager at U.S. Bank Private Client Group in Springfield, Illinois.

"That second-half pickup could translate into some better earnings outlooks." The current price-to-earnings ratio for the S&P 500 is an elevated 18.2 and an increase in profits would make stocks cheaper.

Other notable earnings expected next week include Alcoa Inc (AA.N), Yum! Brands (YUM.N), Delta Air Lines (DAL.N) and CSX Corp (CSX.O).

The end of the week will give investors some insight on the health of the consumer, manufacturing and inflation with monthly retail sales, the consumer and producer price indexes, the Empire State manufacturing survey and a preliminary reading on consumer sentiment.

Yet even with stocks scraping up against a record high, some investors remain cautious in light of uncertainty about the Fed's plan for rates, upcoming U.S. elections and potential ripple effects as the UK begins to move forward with its exit from the European Union.

"It just strikes me there are just too many things that can go wrong over the next couple of months," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.

Reuters (Reporting by Chuck Mikolajczak; Editing by Linda Stern and James Dalgleish)

Saudi energy minister says oil market is balancing

Saudi Arabia's energy minister said on Sunday the oil market was becoming more balanced and prices were stabilizing.

Khalid al-Falih said Saudi Arabia, the world's biggest oil exporter, would always strive to stabilize the oil market, a statement by the energy ministry said on Sunday.

"In doing so, the Kingdom secures the flow of oil supplies as it retains a spare production capacity," the minister, attending a climate meeting in Berlin, was quoted as saying in the statement.

His remarks echo earlier comments made on Monday by the Saudi minister in the Saudi city of Dhahran at a meeting with newly appointed OPEC secretary general, Mohammed Barkindo.

Reuters - (Reporting By Maha El Dahan. Editing by Jane Merriman)

Obama says Brexit talks must not harm 'wobbly' world economy

U.S. President Barack Obama said on Saturday he expected Britain to go through with leaving the European Union after last month's referendum and was concerned to limit the damage to the British, European and global economies from the move.

As a friend, ally and trading partner of Britain and of the EU, he said Washington wanted to see an orderly negotiating process and as close a relationship as possible in future.

"It's important that neither side harden positions in ways that ultimately do damage to their respective economies and ultimately to the world economy at a time when our world economy is still pretty wobbly in places," Obama told a news conference at the end of a NATO summit in Warsaw.

  

Reuters (Reporting by Paul Taylor and Robin Emmott)

Bin Laden's son threatens revenge for father's assassination: monitor

The son of slain al Qaeda leader Osama bin Laden has threatened revenge against the United States for assassinating his father, according to an audio message posted online.

Hamza bin Laden promised to continue the global militant group's fight against the United States and its allies in the 21-minute speech entitled "We Are All Osama," according to the SITE Intelligence Group.

"We will continue striking you and targeting you in your country and abroad in response to your oppression of the people of Palestine, Afghanistan, Syria, Iraq, Yemen, Somalia and the rest of the Muslim lands that did not survive your oppression," Hamza said.
"As for the revenge by the Islamic nation for Sheikh Osama, may Allah have mercy on him, it is not revenge for Osama the person but it is revenge for those who defended Islam."
Osama bin Laden was killed at his Pakistani hideout by U.S. commandos in 2011 in a major blow to the militant group which carried out the Sept. 11, 2001 attacks.
Documents recovered from bin Laden's compound and published by the United States last year alleged that his aides tried to reunite the militant leader with Hamza, who had been held under house arrest in Iran.

Hamza, now in his mid-twenties, was at his father's side in Afghanistan before the 9/11 attacks and spent time with him in Pakistan after the U.S.-led invasion pushed much of al Qaeda's senior leadership there, according to the Brookings Institution.

Introduced by the organization's new chief Ayman al-Zawahiri in an audio message last year, Hamza provides a younger voice for the group whose aging leaders have struggled to inspire militants around the world galvanized by Islamic State.

"Hamza provides a new face for al Qaeda, one that directly connects to the group's founder. He is an articulate and dangerous enemy," according to Bruce Riedel of Brookings.

(Reporting By Asma Alabed; Editing by Noah Browning and Janet Lawrence)

Protests over shootings block roads in U.S. cities, arrests made

BATON ROUGE, La./MINNEAPOLIS | By Bryn Stole and David Bailey 

 

Protests against the shootings of two black men by police officers shut down main arteries in a number of U.S. cities on Saturday, leading to numerous arrests, scuffles and injuries in confrontations between police and demonstrators.

Undeterred by heightened concerns about safety at protests after a lone gunman killed five police officers in Dallas Thursday night, organizers went ahead with marches in the biggest metropolis, New York City, and Washington D.C., the nation's capital, among other cities.

It was the third straight day of widespread protests after the fatal shooting of Alton Sterling, 37, by police in Baton Rouge on Tuesday and the death of Philando Castile, 32, on Wednesday night in a St. Paul, Minnesota suburb, cities which both saw heated protests on Saturday.

The most recent shooting deaths by police come after several years of contentious killings by law enforcement officers, including that of Michael Brown, a teenager whose death in the summer of 2014 caused riots and weeks of protests in the St. Louis suburb of Ferguson.
On Saturday evening, hundreds of protesters shut down I-94, a major thoroughfare linking the Twin Cities, snarling traffic.
Protesters, told to disperse, threw rocks, bottles and construction rebar at officers, injuring at least three, St. Paul police said. Police made arrests and used smoke bombs and marking rounds to disperse the crowd.
Protesters at the scene said police fired tear gas and rubber bullets. Police said early on Sunday they had begun clearing the highway of debris in preparation for re-opening it.

A march in Baton Rouge saw scuffles between riot police and Black Panther activists, several of whom carried shotguns. Louisiana law allows for weapons to be carried openly.

After a short standoff later in the evening, riot police arrested as many as 30 demonstrators and recovered weapons. Prominent black activist and former Baltimore mayoral candidate Deray McKesson was among those arrested.

Protests also took place Saturday in Nashville, where protesters briefly blocked a road, and in Indianapolis. A rally in San Francisco also briefly blocked a freeway ramp, according to local media.

Hundreds of protesters marched from City Hall to Union Square in New York. The crowd swelled to around a thousand people, closing down Fifth Avenue.

Some chanted "No racist police, no justice, no peace" as rain fell in New York.

"I'm feeling very haunted, very sad," said Lorena Ambrosio, 27, a Peruvian American and freelance artist, "and just angry that black bodies just keep piling and piling up."

New York police said they arrested about a dozen protesters for shutting down a major city highway.

(Additional reporting by Laila Kearney, Elizabeth Barber and Chris Michaud in New York; Writing by Nick Carey; Editing by Mary Milliken and Ryan Woo)

 

 

Sterling's fall could batter UK's fish & chips

By Martinne Geller

LONDON (Reuters) - Prices of salmon and squid have soared as disease and weather hurt global supplies, and British fish sellers say the Brexit-related drop in its currency may be the next scourge.
The British pound has fallen to a 31-year low on fears about the effect of the June 23 vote to leave the European Union, leaving it 13 percent weaker against the dollar.
That may make imports pricier, including the cod and haddock used by roughly 10,500 fish and chip shops in the 380 million meals they serve up each year.
Large retailers like Tesco (L:TSCO) and Asda (N:WMT) have long-term supply contracts and hedges that shield them from near-term volatility. But independent players -- which also include roughly 950 fishmongers, according to estimates by research firm Seafish -- are more exposed.
"We tried to buy some shellfish this morning ... and our suppliers advised us to buy now because the price is going to go up," Gary Hooper, owner of GCH Fishmongers in Bedford, England, said. "If I had a big freezer I'd buy it now."
Hooper spends at least 3,000 pounds a week on fish, including bass and bream from Turkey and Greece, tuna from Sri Lanka and swordfish from Brazil. He reckons shellfish costs could rise 20 percent, but knows he would lose customers if he tried to pass that on.
"What we have to try and do is switch the consumer into local fish," he said.
The vast majority of the fish Britons eat is imported, mostly from Norway and Iceland, while much of the domestic catch is exported. Many UK fishermen hoped a Brexit would free them from EU fishing quotas, but the impact on the sector, which has a large showing in pro-EU Scotland, is unclear.
FOREIGN FISH
Norway, the world's top salmon exporter, is benefiting from salmon prices that are 60 percent higher than a year ago, due to disease and a prevalence of sea lice in south America.
Supermarket chain Wm Morrisons (L:MRW) raised its salmon fillet prices "months" ago, and Tesco followed suit recently, increasing the price of 2 fillets to 3.50 pounds from 3 pounds.
Martyn Boyers, chief executive of the fish market in the northern port town of Grimsby, says the pound's weakness, which is also down about 10 percent against the Norwegian crown, could reduce Britain's lure as a market, even for cod and haddock.
"In the end, if the Icelandics and Norwegians who send white fish don't think the price they're getting is good enough, it won't come here at all," Boyers said.
Britain is Norway's third-biggest market for seafood, worth seven percent of total sales in 2015, with a value of about 5 billion Norwegian crowns ($591.90 million). Norway sells mostly salmon to Britain (3.4 billion crowns), followed by cod (600 million crowns) and haddock (450 million crowns).
"Those selling on the spot market will likely not see the current pound value as attractive and look for other alternatives," said Jack-Robert Moeller, director in Britain for the Norwegian Seafood Council. "But regardless of whether you sell on the spot market or with long-term contracts, a weakening pound will lead to higher import costs."
Fluctuating costs are par for the course at London's bustling and wet Billingsgate Market in the shadows of Canary Wharf's skyscrapers. Sellers there said fresh fish prices move every day based on supply, which is heavily reliant on weather.
One merchant who imports more exotic fish like tilapia and cuttlefish, said he moved prices in line with currency, while another said he hadn't yet seen much change, as most frozen stock had arrived before the big drop or was priced in euros.
Prices for squid were a notable outlier, nearly doubling in the last couple months as El Nino weather conditions reduced South American catches.
"Customers grumble for a while, but then get on with it," said Paul Harris of Seahawk Marine Foods. "You still have to eat."
PASSING IT ON
Sainsbury 's (L:SBRY) chief executive told Reuters that sterling's fall would not necessarily mean higher prices for consumers.
Fresh fish prices across the UK rose in each of the last five months, according to the British Retail Consortium, bucking a three-year trend of overall deflation due to lower commodity costs and a retail price war as chains fight for fussy shoppers.
But it said retailers were hedged on currency for at least six to nine months.
"The time it takes for any price increases to make a re-appearance will depend on a combination of factors including the future value of the pound, commodity prices and any eventual impact of last week's Brexit vote," said Helen Dickinson, BRC's chief executive.
The National Farmers Union has predicted that higher prices along the supply chain would lead to increased domestic production. That could be good news for food makers like Charlie Bigham, who tries to use as much British produce as possible in the supermarket pre-cooked dinners bearing his name.
"Our preference is to source from the UK, but we're never going to buy our Parmesan from the UK," Bigham said. His firm is now in "lots of discussions" with suppliers about prices.
"One of the things we need to consider is whether we put some price increases through to our retail partners. It's obviously their choice ... whether they pass those on to consumers."
($1 = 0.7723 pounds)

UK to finalize Boeing patrol plane, helicopter deals: sources

FARNBOROUGH, England (Reuters)

British Prime Minister David Cameron is likely to finalize multi-billion dollar deals with Boeing (N:BA) on Monday to buy nine P-8A Poseidon maritime patrol planes and to upgrade 50 Apache (NYSE:APA) helicopters, two industry sources said on Sunday.
Cameron is expected to announce the deals at the opening of the Farnborough Airshow in southern England.
Spokespeople for the prime minister and Britain's Ministry of Defence declined to comment.
Britain announced its intention to buy the submarine-hunting P-8A planes in November to plug a gap in its defenses that has existed since 2010, when it ditched the Nimrod, built by Britain's BAE Systems (L:BAES).
Cameron said last month he would step down as prime minister once his ruling Conservative Party had chosen a successor, following a referendum in which Britain voted to leave the European Union. Cameron had campaigned for staying in the EU.
Britain's Minister for Defence Procurement Philip Dunne said on Friday the "Brexit" vote did not change the country's commitment to the NATO military alliance and that it was "not retreating into its shell".

German authority would not have approved beta-phase Tesla autopilot: newspaper

FRANKFURT (Reuters)

Germany's Federal Office for Motor Vehicles (KBA) would not have approved the autopilot system installed on Tesla (O:TSLA) cars if the technology was still in a beta-phase version, it told German newspaper Welt am Sonntag.
Tesla's partial self-driving Autopilot feature has been thrust under the microscope since a fatal crash involving a Tesla Model S sedan in the United States in May.
European approval for the autopilot system was gained in the Netherlands, but the view of KBA is significant because Germany is Europe's biggest car market.
"If the word beta-phase means an incomplete status of the software, the KBA would not authorize (such) a functionality," the newspaper quoted the KBA as saying.
A beta version generally describes a product that has moved from mere functional readiness but still requires improvements for full usability.
Tesla said on Friday that it is cooperating with the KBA, which reports to the Transport Ministry, to review components. The Berlin ministry, for its part, said it was "clarifying technical issues" with Tesla but denied it was investigating the company for not sufficiently informing authorities, as Der Spiegel magazine reported on Saturday.

Boeing defense CEO says always looking at M&A opportunities

FARNBOROUGH, England (Reuters)

Boeing Co's (N:BA) defense division is continuing to look at bolt-on acquisitions across its various business areas, and particularly in the services business, Leanne Caret, chief executive of Boeing Defense, Space & Security, said on Sunday.
Caret did not comment directly when asked if Boeing was also looking at larger acquisitions, but said the company was always studying possible opportunities to expand its business.

Thyssenkrupp says in talks with Tata about European steel plants

FRANKFURT (Reuters)

Thyssenkrupp (DE:TKAG), Germany's biggest steelmaker, confirmed on Sunday that it is in talks with India's Tata Steel (NS:TISC) about a consolidation of beleaguered European steel mills that are hit by overcapacity, weak demand and cheap imports.
Tata Steel said on Friday it had suspended the process of selling its troubled UK arm while it held talks with potential partners, including Thyssenkrupp, about alternative and more sustainable solutions for its entire European business. In addition to its UK operations Tata Steel Europe also owns the former Hoogovens steel plant in the Netherlands.
Thyssen spokeswoman Nicola Roettger, contacted by Reuters, said on Sunday her company has long said it believes that a consolidation of the European steel industry is necessary, due to the extremely difficult economic situation.
"We have also said already that in such a situation, everybody's talking to everybody else. Among other (conversations), we are also talking to Tata Steel," she said.
She said it was to be left open for now if, when, and with whom further steps would be taken. More specific statements would be made only if decisive progress towards consolidation could be made.
Tata had said in a statement on Friday that the talks, which could include a possible joint venture, were at a preliminary stage and the European approach was in addition to its attempts, launched in March, to sell its main British steelmaking operations, which include its Port Talbot blast furnace plant in southern Wales.
The firm said the British vote to leave the European Union, and the outcome of the UK government's consultation on Tata Steel UK's British Steel pension scheme, had prompted a rethink on the sale.
"Consequently, Tata Steel has now entered into discussions with strategic players in the steel industry, including Thyssenkrupp," the Indian company said.
However, Thyssenkrupp has said in the past it is not in a position to spend cash on a merger.

Germany's electric car discount scheme spurs new BMW i3 sales: report

FRANKFURT (Reuters)

BMW has recorded rising sales of the latest version of its electric car, the i3, following the Berlin government's push to subsidize electric cars, weekly German newspaper Frankfurter Allgemeine Sonntagszeitung (FAS) said.
Citing company sources, FAS said that orders for the new i3 with a longer range battery, for deliveries from mid-July onwards, had risen "many times over" levels following the introduction of the car's initial version in 2013.
Total orders for the new version had risen to 5,000 worldwide of which around 1,000 were placed in Germany, ahead of delivery.
BMW said last month it was overhauling its research and development to focus on self-driving cars for the future.
It also plans a sportier version of the i3 by 2018 and aims to launch the next new electric car in 2021.
The German government decided in the spring to subsidize new electric car purchases by giving a 4,000-euro ($4,400) discount to the buyer in a scheme that also pays 3,000 euros towards each purchase of a plug-in hybrid vehicle.
"The (buyers') incentive bonus plays a positive part," the paper quoted a BMW manager as saying.
BMW was not immediately available to comment.

BlackRock's Rieder sees Fed likely on hold after June jobs data

NEW YORK (Reuters)

A top bond manager at BlackRock, the world's biggest asset manager, said on Friday the Federal Reserve would likely leave U.S. interest rates alone for the rest of 2016 despite a surprisingly strong rebound in domestic hiring in June.
Rick Rieder, BlackRock's chief investment officer of global fixed income, said the bigger-than-expected 287,000 gain in payrolls in June, the biggest in eight months, was not enough to alter his outlook that U.S. jobs growth would cool as the earlier strong pace of gains is unsustainable and corporate profits will likely weaken.
Global risks including the fallout from Britain's vote to leave the European Union and the likelihood of more monetary stimulus from overseas central banks will also likely keep the Fed from raising rates this year, he said.
"The Fed might do one hike this year, but likely won’t be able to do that one given global economic, geopolitical, and competitive monetary policy dynamics," Rieder said in a statement.

Oi investor urges new board after record Brazil bankruptcy filing

By Ana Mano and Tatiana Bautzer

SAO PAULO (Reuters) - A minority investor in Oi SA, Brazil's largest fixed-line phone carrier, has called for the replacement of most of its board after the company filed for the country's biggest-ever bankruptcy protection.
Nelson Tanure, a Brazilian investor with a contentious track record, has been buying up shares through a fund controlled by Bridge Administradora de Recursos Ltda, according to four sources familiar with the matter.
In a late Thursday filing, Oi said Bridge, acting on behalf of a fund holding 6.6 percent of Oi's capital, had given eight days to call a shareholder meeting to replace board members. The company said it was reviewing the request.
A Bridge representative declined to identify investors in the fund or to answer other questions about plans for Oi.
A source close to Tanure said he was the main investor and chief representative of the fund. The source said he had traveled to New York and met with representatives of the Ontario Teachers' Pension Plan, which owned nearly 6 percent of Oi's common shares in June, in a bid to organize an investor group.
Tanure, through representatives, declined to comment on the matter. Ontario Teachers' Pension Plan did not immediately respond to a request for comment.
The common shares, which have doubled in value since the company's bankruptcy filing nearly three weeks ago, were little changed in Friday trading.
Tanure last made news in Brazil's telecommunications industry with a lawsuit against the controlling shareholder of Oi's rival, TIM Participações SA, in 2012.
Through another investment vehicle, Tanure accused Telecom Italia (MI:TLIT) SpA of abusing its control of TIM by appointing a chief executive the company knew was a target of an Italian investigation into irregular SIM card activations.
Tanure, who made a fortune buying troubled shipyards in the 1990s, entered the telecom sector through long-distance operator Intelig Telecom, which was acquired by TIM in 2009.

IMF's Lagarde nominates Chinese central banker as new deputy

By David Lawder

WASHINGTON (Reuters) - International Monetary Fund Managing Director Christine Lagarde said on Friday she has nominated Tao Zhang, deputy governor of China's central bank, to serve as an IMF deputy managing director effective Aug. 22.
Assuming no objections from the IMF's executive board, Zhang will succeed Min Zhu, who will step down from the position on July 25. Zhu also is a Chinese national who previously had served as deputy governor of the People's Bank of China.
Zhang returned to the PBOC as deputy governor in 2015 after serving as the IMF's executive director representing China for four years.
He previously served in several positions at the PBOC, including as head of the bank's legal affairs department and as head of its financial survey and statistics department. He also has worked at the World Bank and the Asian Development Bank in the 1990s and early 2000s and has degrees from the University of California, Santa Cruz, and Tsinghua University in Beijing.
China holds 6.11 percent of the IMF's voting power, the third largest share after the United States and Japan.
"Mr. Zhang brings a strong combination of international economic expertise, public sector policymaking, and diplomatic skills," Lagarde said in a statement. "He also has extensive experience with international financial institutions, excellent communication and negotiating skills, and a superb knowledge of IMF policies and procedures."
Zhang will serve alongside three other IMF deputy managing directors: first deputy David Lipton, an American; Mitsuhiro Furusawa, a Japanese national; and Carla Grasso, who holds dual citizenship of Brazil and Italy and serves as the fund's chief administrative officer

Theranos CEO Holmes barred from operating lab for two years

By Natalie Grover and Ankur Banerjee

(Reuters) - A U.S. health regulator has barred blood-testing company Theranos Inc's founder and CEO, Elizabeth Holmes, from operating a lab for at least two years, the latest blow for a company that is under scrutiny for the accuracy and quality of its tests.
The Centers for Medicare & Medicaid Services (CMS)revoked a key certificate for the company's Newark, California lab, and terminated the facility's approval to receive Medicare and Medicaid payments for all services, Theranos said late on Thursday.
Theranos, once valued at $9 billion, is also being investigated by other federal and state agencies and was accused in a suit filed in May of endangering customer health through "massive failures" that misrepresented test results, according to court papers.
"While we are disappointed by CMS' decision, we take these matters very seriously and are committed to fully resolving all outstanding issues," Holmes said in a statement.
Holmes, once a Silicon Valley darling, has seen her net worth dwindle to zero from $4.5 billion last year, according to Forbes magazine.
Holmes founded Theranos in 2003 and it promised ground-breaking methods that would allow quick results for a wide range of tests with just one drop of blood.
The company has been under pressure since the Wall Street Journal published a series of reports that had raised doubts about Theranos's devices.
The CMS said in January that Theranos's practices violated several clinical-laboratory regulations, jeopardizing patient health and safety.

U.S. to release partial transcripts of Orlando killer calls to police: Lynch

By David Lawder

WASHINGTON (Reuters) - U.S. officials will on Monday release partial transcripts of three phone conversations the man who killed 49 people in a Florida gay nightclub last week had with police as the massacre unfolded, Attorney General Loretta Lynch said on Sunday.
Lynch, speaking on CNN's "State of the Union" talk show, said the Orlando shooting incident was "an act of terror and an act of hate", but she declined to say what charges may be filed nor who may be charged in the case.
The transcripts of the conversations between deceased gunman Omar Mateen and law enforcement negotiators will "talk about what he told law enforcement on the ground as the events were unfolding," Lynch said.
"As we have said earlier, he talked about his pledges of allegiance to a terrorist group. He talked about his motivations for why he was claiming at that time he was committing his horrific act," the Attorney General said.
Lynch said, however, that the transcripts would be edited to "avoid revictimizing those who went through this horror, but it will contain the substance of his conversations."
She told ABC's "This Week" program the transcripts would not include his pledge of allegiance to Islamic State.
Lynch also said she would travel to Orlando on Tuesday to confer with investigators and meet survivors of the worst domestic shooting incident in American history.
She declined to say whether a federal grand jury was likely to charge Mateen's second wife, Noor Salman. U.S. officials have said Salman knew of her husband's plans to carry out the attack.
"Because this investigation is open and ongoing, we're not commenting on anyone else's role in it right now, except to say that we are talking to everyone who knew him, and that of course includes his family, to determine what they knew, what they saw in the days and weeks leading up to this," Lynch said.

Indian central bank chief felt undermined in weeks before quitting: sources

By Rupam Jain, Rajesh Kumar Singh and Suvashree Choudhury

NEW DELHI/MUMBAI (Reuters) - Indian central bank governor Raghuram Rajan's abrupt decision to quit came as he increasingly felt he lacked support from his political bosses Finance Minister Arun Jaitley and Prime Minister Narendra Modi, according to friends and colleagues.
A newspaper report a week ago that a selection panel would consider a field of candidates rather than directly offer the former IMF chief economist an extension to his three-year term, effectively forcing him to reapply for his own job, may have been the final straw, according to these people and a finance ministry source.
"He felt it would belittle the position of the RBI governor if he had to appear before the committee," said one senior commercial banker who knows Rajan personally but had not spoken to him since his decision.
"It would reveal a lack of government support. Rather than have two more years of constant quibbling, he decided to go."
The darling of international investors was also upset that Jaitley had not backed him more strongly after criticism from Hindu nationalists of both his policies and his perceived lack of "Indian-ness", the sources said.
Rajan joked when he took over the top job at the Reserve Bank of India in September 2013 that he wasn't expecting to win any votes or Facebook (NASDAQ:FB) 'likes' in the position.
But the hostility he had faced of late from elements of Modi's ruling party was evidently greater than he had counted on, the sources said.
When Rajan decided to leave, he did so without warning and on his own terms: in a sign of growing tensions he did not inform top members of the government before releasing an open letter to staff on Saturday, a move that took investors and the government by surprise.
NO CONTACT
In his letter, Rajan said he had been open to seeing through changes he championed such as the creation of a monetary policy committee to set interest rates and a clean-up of the banking sector.
But he added: "On due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as governor ends on Sept. 4, 2016."
Rajan was not available for comment but will face questions on the motives for his abrupt withdrawal at a speaking engagement on Monday afternoon in Mumbai. Less than two weeks ago, he laughed off speculation about his future after an RBI policy meeting, saying: "You will know when there is news."
Five sources familiar with the matter said Rajan had not contacted Modi's office directly. Nor was a meeting or discussion between the two planned, said one senior official.
Modi has not commented, tweeting instead on Sunday about the forthcoming World Yoga Day.
Jaitley had been in his office on Saturday and gave no indication of concern about Rajan's future, leaving for home before the news broke, an aide said.
The finance minister tweeted after a delay of more than two hours that he respected Rajan's decision.
It was unclear whether Rajan had briefed senior staff at the Reserve Bank of India since his bombshell decision.
"I am surprised," said one person who has worked with Rajan and who spoke on condition of anonymity. "A week back he was sounding very much interested in serving a second term."
SAFFRON POSSE
Rajan had for weeks faced intense pressure from Subramanian Swamy, a politician in Modi's Bharatiya Janata Party (BJP) who, say sources familiar with the matter, was acting with the backing of the Hindu-nationalist umbrella group to which the BJP is affiliated, the Rashtriya Swayamsevak Sangh (RSS).
Swamy, a 76-year-old former Harvard economist with a record of aggressive anti-corruption litigation, wrote an open letter to Modi a month ago accusing Rajan of being "mentally not fully Indian" and calling on the prime minister to "terminate" him with immediate effect.
The broadside from Swamy came soon after he was handed a seat in India's upper house of parliament by the ruling party, creating the impression that he was acting on good authority.
Challenged to respond to Swamy, Jaitley merely said that Rajan's candidacy should not be discussed publicly.
"As a colleague I could see he looked hurt," said one senior policymaker who works with Rajan. "You can question my efficiency, but if you question my loyalty to my job, then one would expect your employer to stand up and defend - and not stay silent."
Yet it was Rajan's own forays into politically sensitive territory that led the Hindu right to target him - in particular over a speech last October to students in Delhi in which he said that social tolerance was vital for a country's development.
"NO-GO ZONE"
The issue of "intolerance" has been a catalyst of controversy under Modi, driving to the heart of whether the overt message of development for all that he campaigned on to win the 2014 general election can hold, or whether a more divisive Hindu-first agenda will prevail under his party's rule.
Questions about where Modi stands on the issue date back to early in his term as chief minister of Gujarat, where more than 1,000 people, most of them minority Muslims, died in communal rioting in 2002. He was dogged for years by allegations that he either turned a blind eye to, or even encouraged, the attacks until a court-ordered probe found there was not enough evidence to prosecute him. Throughout, Modi has denied wrongdoing.
"It was Modi who protected him for the longest time but the defense wall collapsed when Rajan entered the no-go zone of politics," one senior RSS official told Reuters, speaking on condition of anonymity.
After he was appointed by the last Congress government, the 53-year-old Rajan took extended leave from his post as a finance professor at the University of Chicago's Booth School of Business. This would have lapsed had he not returned in time for the fall semester.
Friends also say his family had wanted him to return - his wife has remained teaching in Chicago.
One senior official said Rajan had signaled his willingness to work until next March - the deadline he had set for completing a clean-up of bad debts in the banking sector. This had not been seen as workable, however, with a "natural" departure at the end of his term rather than an "unnatural" exit later viewed as a less bad option.

Italy's Ferragamo CEO sees no let-up in luxury sector slowdown

MILAN (Reuters)

Salvatore Ferragamo (MI:SFER) will focus on boosting profits this year to combat lower growth in the luxury industry as a whole, its outgoing chief executive said on Sunday.
Slower economic growth in China, plunging oil prices, volatile exchange rates and security threats that have curbed tourist flows have all put the brakes on spending on upmarket handbags, shoes and other accessories.
Ferragamo posted a larger-than-expected 5 percent rise in first-quarter core profit in May but revenue fell 2 percent to 321 million euros ($362 million).
Speaking before the brand's menswear show at Milan Men's Fashion Week, Chief Executive Michele Norsa said the luxury sector would have to focus on managing risks.
"Growth will not be as strong as in past years, when the Chinese economy and new markets have been opportunities for the industry," said Norsa.
He said Florence-based Ferragamo, whose founder designed ballet shoes for Audrey Hepburn, is on track to continue increasing profitability and that it would not be affected if Britain voted to leave the European Union.
Ferragamo will continue to focus on widening the profit margins on its products rather than pushing sales, "given the growth of volumes will be hard to forecast", Norsa said.
Norsa, who has been at the helm of the luxury group for a decade and presided over its stock market debut in 2011, is due to leave by the end of the year. He will be replaced by Eraldo Poletto, former head of handbag maker Furla.
Ferragamo's shares have more than doubled in value in the five years since the listing, but have slid 9 percent so far this year as the luxury industry faces weakened demand.

Britain's rival EU camps resume campaign as polls show momentum for 'In'

By William James

LONDON (Reuters) - Campaigning for Britain's vote on EU membership resumed on Sunday after a three-day hiatus prompted by the killing of a pro-EU lawmaker, but pledges of a more respectful tone were quickly tested by a fresh row over immigration.
Three opinion polls ahead of Thursday's vote showed the 'Remain' camp recovering some momentum although the overall picture remained one of an evenly split electorate.
The murder of Jo Cox, a 41-year-old mother of two young children, shocked Britain, raised questions about the tone of campaigning and could yet prove a defining moment in what is Britain biggest political decision for decades.
Both sides sought to adopt a more measured style on Sunday, paying their respects to Cox but sticking closely to the immigration versus economy debate that has defined the campaign.
"I hope, because of the tragic death of Jo, we can have a less divisive political debate in our country," finance minister George Osborne, a leading conservative 'Remain' campaigner, told ITV's Peston on Sunday show.
"Particularly in the last few days of this referendum we’re going to have less baseless assertion and inflammatory rhetoric and more reasoned argument and facts," he said.
Cox, a Labour Party lawmaker and ardent supporter of EU membership, was shot and stabbed in the street in her electoral district in northern England on Thursday. A 52-year-old man appeared in a London magistrate's court on Saturday, charged with her murder.
Both 'Remain' and 'Leave' halted their campaigns until Sunday morning.
But the heated nature of the debate, which has so far seen 'In' campaigners accused of scaremongering on the economy and the 'Out' campaign's immigration focus criticized as divisive, soon resurfaced after the temporary truce.
Osborne criticized as "disgusting and vile" a poster unveiled by 'Leave' campaigners last week showing a line of refugees under the slogan 'Breaking Point', saying it was reminiscent of literature used in the 1930s.
UK Independence Party (UKIP) leader Nigel Farage, who was pictured in front of the poster, said the EU had failed to control immigration properly and had compromised safety in Europe by allowing in religious extremists who wanted to attack Western states.
"Something that is true can't be a scare, can it?," Farage told BBC radio when asked about the poster. "It was a comment about us being part of a European Union that is failing."
LACK OF CONTROL
The official 'Vote Leave' campaign sought to distance itself from the poster but defended its focus on immigration - an issue that has resonated with many voters.
"The debate in this referendum is about our lack of control over economic migration from parts of Europe whose economies are being destroyed by the euro," said Vote Leave chairwoman Gisela Stuart. "This is now affecting families in Britain."
Farage also appeared to indicate he thought Cox's killing had had an adverse effect on the 'Out' campaign.
"It has an impact on the campaign for everybody," he told Peston on Sunday when asked whether it would affect the referendum outcome. "We did have momentum until this terrible tragedy."
The only poll fully carried out since the killing showed support for "In" at 45 percent ahead of "Out" on 42 percent - a reversal of the three-point lead that the pollster, Survation, showed for 'Out' in a poll conducted on Wednesday.
Two other polls published on Saturday showed the 'Remain' campaign had regained its lead over 'Leave', while another showed the two camps running neck-and-neck.
However, pollsters said most of these surveys were carried out before Thursday's attack and thus did not reflect the full impact of the event.
"We are now in the final week of the referendum campaign and the swing back toward the status quo appears to be in full force," Anthony Wells, a director with polling firm YouGov, said.

Crude oil futures - weekly outlook: June 20 - 24

Source : Investing.com

Oil futures rose for the first time in seven sessions on Friday, bouncing off four-week lows as a weaker U.S. dollar lent support to the commodity and as concerns over a potential U.K. exit from the European Union temporarily eased.
The dollar fell 0.5% on Friday, retreating from a two-week high the day before. Market sentiment recovered as concerns over a possible Brexit temporarily subsided as traders tried to assess whether the killing of a pro-EU British lawmaker may change the balance of opinions in Britain's upcoming referendum on European Union membership.
On the ICE Futures Exchange in London, Brent oil for August delivery jumped $1.98, or 4.2%, to settle at $49.17 a barrel by close of trade on Friday. A day earlier, Brent prices dropped to $46.94, a level not seen since May 12.
Despite Friday’s gains, London-traded Brent futures lost $1.25, or 2.71% on the week, as global concerns over a potential Brexit weighed on appetite for riskier assets.
A vote by Britain to leave the European Union may tip Europe back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
Brent futures prices are nearly 7% below a 2016 high of $52.86 struck earlier this month amid easing concerns over global supply disruptions.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in July advanced $1.77, or 3.83%, to end the week at $47.98 a barrel. Prices dropped to $45.83 earlier, the lowest since May 13.
For the week, New York-traded oil futures slumped 87 cents, or 2.22%, on signs of a potential recovery in domestic drilling activity.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by nine last week to 337, the third straight weekly rise.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
U.S. crude futures are down almost 8% since hitting a 2016 high close to $52 a barrel on June 9. Despite recent losses, Nymex oil prices are still up nearly 80% since falling to 13-year lows at $26.05 in early February. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $1.19 at Friday’s settlement, compared to a gap of 98 cents by close of trade on Thursday.
In the week ahead, market players will be turning their full attention to a highly anticipated referendum on whether Britain remains in the European Union on Thursday.
Oil traders will also be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, June 21
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. crude supplies.
Wednesday, June 22
The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.
Thursday, June 23
The U.K. will vote on a referendum to decide if it continues to be a part of the European Union.
Friday, June 24
Baker Hughes will release weekly data on the U.S. oil rig count.

U.S. futures trade flat with inflation and Fed speakers ahead

Source : Investing.com

Wall Street futures were trading flat with mixed signs on Tuesday as investors looked ahead to key economic data and the first Federal Reserve (Fed) officials to speak after the release of inflation figures later in the day, while oil appeared unable to reach $50.
The blue-chip Dow futures inched up one point, or 0.01%, by 10:51AM GMT, or 6:51AM ET, the S&P 500 futures edged down one point, or 0.04%, while the tech-heavy Nasdaq 100 futures advanced 3 points, or 0.07%.
The Commerce Department will publish April inflation figures at 12:30GMT, or 8:30AM ET, Tuesday. Market analysts expect consumer prices to inch up 0.3%, while core inflation is forecast to increase 0.2%.
On a yearly base, core CPI is projected to climb 2.1%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Federal Reserve toward raising interest rates.
In that light, market participants will focus on the first Fed officials to speak after the data is released.
San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart will discuss the economy at a Politico event in Washington, D.C. at 16:00GMT, or 12:00PM ET.
Later, Dallas Fed President Rob Kaplan will moderate a Q&A at a Fed community forum in Midland, Texas at 17:15GMT, or 1:15PM ET.
Looking ahead, Fed chair Janet Yellen will give a speech to the World Affairs Council in Philadelphia on June 6, just before the blackout period for the June 15 FOMC meeting. The announcement fueled speculation the Fed chief may try to firm up a message for markets ahead of the June policy meeting.
Also on Tuesday’s economic docket, housing starts and building permits will be released at 12:30GMT, or 8:30AM ET, while industrial production and capacity utilization are due at 13:15GMT, or 9:15AM ET.
In company news, Home Depot Inc (NYSE:HD) traded up more than 1% in the pre-market after the home improvement retailer reported better than expected earnings and raised its annual guidance.
TJX Companies Inc (NYSE:TJX) was also slated to report earnings before the opening bell.
Meanwhile, oil prices hit fresh seven-month highs on Tuesday in early European trade, amid mounting concerns over global supply disruptions.
Black gold has been well-supported in recent sessions due to a combination of Nigerian, Libyan and Venezuelan supply outages, declining U.S. shale output and reduced production of Canadian crude as a result of fires in Alberta's oil sands region.
However, gains were pared as the U.S. session prepared to get underway with Brent moving into the red after having traded as high as 49.47 on Tuesday.
U.S. crude futures inched up 0.04% to $47.74 by 10:52AM GMT, or 6:52AM ET, while Brent oil traded down 0.31% to $48.82.

Vodafone says European recovery will hasten earnings growth

By Paul Sandle
LONDON (Reuters) - Vodafone (LON:VOD) said its recovery would accelerate this year after investment in faster networks boosted demand in Europe and helped the group return to underlying revenue and core earnings growth for the first time since 2008.
Chief Executive Vittorio Colao said a strong year for the world's second mobile operator had been capped by a recovery in the final quarter in Europe, its largest region which has taken more than five years to nurse back to health.
"We achieved the first quarter of positive revenue growth in Europe since December 2010," he said on Tuesday.
In Germany, Vodafone was "back in game" against former incumbent Deutsche Telekom (DE:DTEGn), while Italy, another laggard, also recovered in the final quarter, he said.
Its performance in its home market was marred by problems with a new billing system. Colao said the business should be back to normal in the second half of the year.
The company has been spared the drop to fourth place in the consumer market in Britain after Europe on May 11.
Colao said the European Commission had no choice but to block the merger between rivals Telefonica's O2 and Hutchison's Three because they were in separate network sharing agreements with Vodafone and market leader BT's EE.
The ruling does not bring any certainty to the market, with the future of both companies in Britain in doubt.
"My sense is that there will be commercial alliances, possibly deals," he said.
NETWORK UPGRADE
Vodafone has spent 19 billion pounds ($27.51 billion) on Project Spring, a program that has brought 4G speeds to 87 percent of its European footprint, built more fixed-line fiber and extended 3G coverage in emerging markets such as India.
Colao said the group had 47 million customers on faster 4G networks across 21 countries, and on average they were using twice as much data as they were on 3G networks.
"Price is coming down, but people are spending more," he said. "It's a win-win for consumers and for the company."
Vodafone reported earnings before interest, tax, depreciation and amortization of 11.6 billion pounds for the year to end-March, slightly shy of forecasts but up 2.7 percent and said it expected this rate to accelerate to 3-6 percent this year.
"I am confident we will sustain our positive momentum in the coming year, allowing us to maintain attractive returns for our shareholders," Colao said.
Capital expenditure will fall after the end of Project Spring, but not as much as had been forecast, to the mid-teens as a percentage of revenue rather than 13-14 percent.
Shares in Vodafone, which have fallen 2 percent in the last 12 months against a 11 percent decline for the European sector, were up 2.4 percent at 229 pence at 1030 GMT.
Analysts at Citi said Vodafone's improving core earnings momentum should be met positively, although the raised capex outlook, and its likely impact on free cash flow and dividends would offset that.
Vodafone reported full-year revenue of 41 billion pounds, up 2.3 percent on an underlying basis. It raised its final dividend by 2.0 percent to 7.77 pence.

Saudi Arabia aims to salvage white elephant financial district

By Angus McDowall
RIYADH (Reuters) - The plan to build a financial district from scratch was viewed by Saudi Arabia's neighbors as among the glossiest excesses of the kingdom's oil boom profligacy: a white elephant in the making, unlikely to attract tenants and possibly never even to be completed.
The creators of the King Abdullah Financial District (KAFD) envisaged a kind of mini-Dubai, a haven for foreign financial services and investors as well as local banks and companies currently doing business from offices all over Riyadh.
But more than 10 years later -- and a year after it was supposed to be finished -- most of the 1.6-million-sq-metre district on the edge of Riyadh is still a construction site, and no businesses have moved in.
Reform-minded Deputy Crown Prince Mohammed bin Salman said last month he wants to salvage the $10 billion project. The Public Investment Fund, reimagined as the world's largest sovereign wealth fund, will be based there and sources have said it will also own the project.
According to the prince's "Vision 2030", KAFD will become a "special zone" with internationally competitive regulations, an easier visa regime and a direct connection to the airport, steps he hopes will "increase the chances of ... success".
Another change is to increase the amount of residential use from the 1.7 million sq meters now designated for office space. According to a 2015 report by real estate analyst Jones Lang LaSalle, rents are bottoming out in Riyadh's current 2.5 million sq meters of office space but prices for residential units are rising.
Potential tenants and investors are both hopeful and skeptical about the plan.
"The potential is amazing. The inside is impressive. I'd like to live there," said one Dubai-based expatriate who does business in Saudi and who has toured the site. "As an urban space it's interesting, with its design and architecture."
He questioned how successful the project could be in the current economic climate, however. The main contractor is Saudi Binladen Group, the biggest construction firm in the kingdom, which has been struggling since last year.
"It will not be finished. Decision-making is very slow (on the project, and) people don't have cash," he said. Like other business people interviewed for this story, he didn't want to be named expressing an opinion about such an important royal initiative.
A senior Saudi former banker expressed similar concerns.
"If the plan does create a genuine free zone and makes things smoother for newcomers, it'll be 'bingo!'" he said, but added that a recovery in the oil-dependent economy was key.
Another senior Gulf banker said his firm had no plans to move into the complex despite its "impressive" looks, and expressed concern that banks might only be able to rent, rather than own, buildings there.
MORE RESIDENTIAL SPACE
Inside the district last week, swallows swooped between palm trees and sparrows pecked among decorative desert shrubs near the almost completed conference center. The parts that are finished include sections of its stone-paved "wadi" walkway and distinctive glass towers. From high in one tower, swimming pools and children's playgrounds could be seen on other roofs.
Jacob Kurek, a partner at the firm responsible for the KAFD masterplan, Danish firm Henning Larsen, said the original plans were flexible enough to transform space earmarked for offices into residences or retail space. A direct link to the airport would be easy to install via Riyadh's new metro, which will have a station at KAFD, he said.
Other changes, such as a different regulatory regime, visa exemptions and any blunting of Saudi Arabia's strict social restrictions, would be more complicated, however.
At the moment, visas can take many days to arrange and require a complex process of invitation by a sponsor and plenty of supplementary documentation. Setting up a business means getting permissions from many government departments.
Mustafa Alani, a security expert with close ties to the Saudi Interior Ministry, said visa exemptions could work like the waiver program in the United States, or like residence permits issued by free zones in the United Arab Emirates.
"It's not a visa, but it's not a free walk-in either. There might be a geographical restriction," he said, suggesting those who enter on the special visas might be forbidden to leave KAFD, or be limited to the Saudi capital.
According to rules dictated by Saudi Arabia's powerful conservative clerics, women must wear an ankle-length cloak in public and are forbidden from driving. Men and women who are not related may not mingle unchaperoned. Cinemas, music concerts and dancing are banned and alcohol and pork are illegal. Businesses must shut for half an hour during each of five daily prayers.
Saudi Arabia has found ways to accommodate foreigners, however. Expatriate compounds, hidden behind high walls, protected by army gun emplacements, to which Saudi nationals are usually forbidden entry, allow foreigners to dress and behave much as they do in the West.
Such extreme segregation could not work for a project like KAFD, which is also marketed at Saudi businesses and residents.
But there are other examples of areas that Saudis can visit that enjoy a special status and do not require strict Islamic dress codes or forbid gender mixing, like Riyadh's Diplomatic Quarter.
For one Western business executive now living in Dubai, the social restrictions, especially those on women, were among the most important factors in any decision to move to Saudi.
"To me, the visas are nice, but they're not even on the list of the top ten things that need to change," he said.

Greece wants Eurogroup to focus on short-, medium-term debt relief on May 24

ATHENS (Reuters) - Greece expects euro zone finance ministers to focus on short- and medium-term debt relief for Athens when they meet on May 24, government spokeswoman Olga Gerovasili said on Tuesday.
Finance ministers from the shared currency bloc are expected to assess next week whether Greece qualifies for new bailout loans and to discuss debt restructuring. Athens is hoping that reprofiling its mountain of debt will help it regain market access and convince its public that the six years of austerity they have endured are beginning to pay off.
"We expect the Eurogroup to talk about the short-term and medium-term decisions on debt relief," Gerovasili told reporters. "A long-term solution is a bigger discussion."
Cash-strapped Greece has been excluded from global debt markets since 2014. It agreed a third multi-billion euro bailout last July and started talks with lenders last week on how to make its debt more manageable.
Euro zone finance ministers aim to draw up a "road map" at the May 24 meeting to secure the participation of the International Monetary Fund in the Greek bailout rather than finalize a full three-stage debt-relief program.
The euro zone is considering longer grace periods and maturities for Greece in the medium term. But it may also decide on whether more debt relief is needed to ensure that Athens' debt-servicing costs are sustainable in 2018 if Greece meets its primary surplus target of 3.5 percent of GDP.
The IMF believes Athens will miss that target unless it is granted significant debt relief and takes extra measures. It has not yet decided whether it will participate financially in Greece's bailout program, but its involvement is crucial for Germany.
Asked about the views of the IMF on debt relief, Gerovasili said that they were 'always in the right direction'.
The Greek parliament has already approved pension and income tax reforms demanded by its lenders and worth 2 percent of GDP.
Prime Minister Alexis Tsipras, who has a narrow majority of 153 seats in the 300-seat parliament, hopes that a vote on tax hikes and new reforms on Sunday, two days before the Eurogroup meeting, will help the country during the talks.
Lawmakers will also vote on a contingency mechanism to impose spending cuts that will be activated only if Athens misses its fiscal targets.

Futures slightly lower after oil rally takes a breather

By Yashaswini Swamynathan
(Reuters) - U.S. stock index futures were slightly lower on Tuesday as oil prices steadied after touching a six-month high.
* Oil prices were off about 0.2 percent after rallying nearly 3 percent to a shade below $50 as supply disruptions in Nigeria and positive outlook from Goldman Sachs (NYSE:GS) boosted risk appetite. [O/R]
* Wall Street closed up 1 percent on Monday, also boosted by a jump in Apple's (O:AAPL) shares. Apple was up 0.7 percent at $94.55 in premarket trading on Tuesday.
* Investors will look out for data scheduled to be released at 8:30 a.m. ET (1230 GMT). U.S. consumer prices likely rose 0.3 percent in April, after rising 0.1 percent in March. Housing starts likely rose to 1.1 million units in April.
* Industrial production is expected to have rebounded by 0.3 percent in April from a 0.6 percent fall in March. The data is expected at 9:15 a.m. ET.
* Investors are closely watching data to assess when the Federal Reserve will raise interest rates. While some Fed officials have suggested two hikes this year, traders are pricing in only one hike at the end of the year.
* Among Fed speakers scheduled to speak today are San Francisco Fed president John Williams and Atlanta Fed president Dennis Lockhart who will speak at 12:25 p.m. ET in Washington.
* Home Depot (N:HD) was up 1.6 percent at $137.50 after the home improvement company raised its full-year sales growth and profit forecast.
* Off-price retailer TJX Cos Inc (N:TJX) was up 3.2 percent at $77.60, the company is expected to report first-quarter results at 8:30 a.m. ET.
Futures snapshot at 7:20:
* S&P 500 e-minis (ESc1) were down 2.5 points, or 0.12 percent, with 146,071 contracts changing hands.
* Nasdaq 100 e-minis (NQc1) were down 1.5 points, or 0.03 percent, in volume of 19,312 contracts.
* Dow e-minis (1YMc1) were down 13 points, or 0.07 percent, with 23,169 contracts changing hands.

Rio Tinto submits feasibility study for Guinea's giant iron ore deposit

CONAKRY (Reuters) - Anglo-Australian mining giant Rio Tinto (L:RIO) has submitted feasibility studies to the Guinean government for its massive Simandou project, considered the world's biggest untapped iron ore deposit.
The studies are a further step toward bringing onstream a deposit that holds more than 2 billion tonnes. The real cost of the project has yet to be revealed but it is tipped to reach $20 billion.
It could make Guinea one of the world's top iron ore exporters, but analysts caution the world already has a surplus of iron ore for the foreseeable future.
Rio Tinto's joint venture Simfer said in a statement on Monday it had submitted the bankable feasibility study of the mine and the infrastructure of the Simandou South Project on the basis of extensive analysis over the last two years.
Simfer is a joint venture owned by the government of Guinea (7.5 percent), Rio Tinto (46.6 percent), Chalco Iron Ore Holdings - a consortium of Chinese state-owned firms led by the Aluminium Corporation of China (41.3 percent) - and the International Finance Corporation (4.6 percent), part of the World Bank.
When fully operational, Simandou has the potential to double Guinea’s GDP, the project partners have said, while China, the world's largest iron ore consumer provides an obvious market.

Oil prices ease after hitting 2016 highs

Source  : Investing.com

Oil futures took a breather Tuesday, after hitting 2016 highs as the market focused on supply disruptions that prompted long-time bear Goldman Sachs (NYSE:GS) to issue a bullish assessment on near-term prices.
U.S. crude futures were at $47.89 a barrel at 0655 ET, after hitting highs of $48.42 earlier, the strongest level since October.
Brent crude futures slid 0.05 cents or 0.10% to $48.92 a barrel, after rising as high as $49.47 earlier, the most since early November.
Crude oil prices have rallied for most of the past two weeks due to a combination of Nigerian, Venezuelan and other outages, declining U.S. output and curtailments of Canadian crude after fires in Alberta's oil sands region.

Forex - Weekly outlook: May 2 - 6

Source : Investing.com

The dollar slumped to eight-month lows against a basket of its major peers on Friday as the yen continued to build on strong gains from earlier in the week, following central bank meetings in the U.S. and Japan.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.76% at 93.02 late Friday, the weakest level since August 2015. The index ended the week down 2.14%.
The greenback weakened across the board after the Federal Reserve kept interest rates on hold on Wednesday and indicated that any future interest rate hikes would be data dependent.
Data on Thursday showed that the U.S. economy grew at the slowest rate in two years in the first quarter, with gross domestic product increasing just 0.5% from a year earlier.
Another report on Friday showed that both personal spending and the personal consumption expenditures price index, the Fed’s preferred inflation measure, ticked up 0.1% in March.
The yen continued to rally after the Bank of Japan held off from unveiling new policy easing measures at the conclusion of its policy meeting on Thursday, defying market expectations for further stimulus.
USD/JPY fell 1.54% to 106.45 late Friday, the weakest since October 2014. The pair ended the week down 4.49%, the worst weekly performance since the 2008 global financial crisis.
The yen was also higher against the euro, with EUR/JPY down 0.73% at 121.94 late Friday. The pair ended the previous session down 2.73%.
The euro rose to almost three-week highs against the dollar, with EUR/USD advancing 0.9% to 1.1453.
The single currency was boosted after data on Friday showed that the bloc’s economy grew at the fastest pace in five years in the first quarter, with GDP rising 0.6%, well ahead of expectations of 0.4% growth.
The euro area economy notched up annual growth of 1.6%.
But a separate report showed that the region slid back into deflation in April, with consumer prices falling 0.2% from a year earlier.
Elsewhere, sterling touched 12-week highs against the dollar, with GBP/USD hitting 1.4670, the strongest since early February and was last at 1.4602, ending the week with gains of 1.09%.
Demand for the pound was underpinned as concerns diminished that a June 23 referendum will lead to a vote for Britain to leave the European Union.
In the week ahead, investors will be turning their attention to Friday’s U.S. jobs report for April, with any changes to wage growth particularly in focus. Traders will also be looking at reports on manufacturing and service sector activity from the U.S., China and the U.K.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 2
Financial markets in China will be closed for a national holiday.
Markets in the U.K. will also be closed for a holiday.
European Central Bank head Mario Draghi is to speak at an event in Frankfurt.
In the U.S., the Institute for Supply Management is to publish its monthly manufacturing index.
Tuesday, May 3
Markets in Japan will be closed for a holiday.
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Australia is also to release data on building approvals.
China is to publish the Caixin manufacturing index.
The U.K. is to publish its manufacturing activity index.
Bank of Canada Governor Stephen Poloz is to speak at an event in Los Angeles.
Wednesday, May 4
New Zealand is to release its quarterly employment report.
Markets in Japan are to remain closed for a national holiday.
The U.K. is to report on construction sector activity.
The U.S. is to release the ADP report on private sector job creation, the ISM report on service sector activity and data on factory orders.
Both the U.S. and Canada are to release trade data.
Thursday, May 5
Markets in Japan are to remain closed for a national holiday.
Australia is to release reports on retail sales and the trade balance.
China is to publish the Caixin report on service sector activity.
The U.K. is to report on service sector activity.
The U.S. is to release data on building permits and the weekly report on jobless claims.
Friday, May 6
The RBA is to publish its monetary policy statement, which gives insight into the bank's view of economic conditions and inflation.
The Swiss National Bank is to publish data on its foreign currency reserves.
Canada is to produce its monthly employment report.
The U.S. is to round up the week with the closely watched report on nonfarm payrolls.

Gold / Silver / Copper futures - weekly outlook: May 2 - 6

Source : Investing.com

Gold prices soared to a 15-month peak on Friday, as a broadly weaker U.S. dollar and indications that the Federal Reserve was in no hurry to raise interest rates boosted the yellow metal.
Gold for June delivery on the Comex division of the New York Mercantile Exchange jumped to an intraday high of $1,299.00 a troy ounce, the most since January 2015, before paring gains to end at $1,290.50, up $24.10, or 1.9%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, crashed to 92.98 on Friday, a level not seen since August. It ended the day at 93.02, down 2.14% for the week, as a lack of action by the Bank of Japan and the cautious tone taken by the Federal Reserve earlier in the week continued to weigh.
The dollar dropped to an 18-month low of 106.28 against the yen on Friday, with the pair posting its biggest weekly percentage decline since the 2008 financial crisis in the aftermath of the Bank of Japan's decision not to ease policy further.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
For the week, gold prices rallied $57.60, or 4.92%, amid indications the Fed will take a slow and cautious approach to raising interest rates this year.
The U.S. central bank left interest rates unchanged following its two-day meeting on Wednesday and issued a statement implying it was in no hurry to raise rates.
Offering little hope of a move in June, the Fed said U.S. "economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate."
Data released Thursday revealed that the U.S. economy grew at an annualized rate of just 0.5% in the first quarter, its weakest pace in two years, while a report on Friday showed that U.S. inflation barely rose in March as consumer spending remained tepid.
The downbeat data makes it less likely that the Fed will be able to follow through on its projected two interest rate increases this year.
A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Prices of the yellow metal are up nearly 22% so far this year as expectations faded that the Fed would move to normalize interest rates due to fears over the global economy.
Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for April to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
There is also ISM manufacturing data on Monday and ISM services on Wednesday. In addition, there are more than a half-dozen Fed speakers on tap for the coming week as traders search for more clues on the timing of the next U.S. rate hike.
Elsewhere in metals trading, silver futures for May delivery climbed 23.6 cents, or 1.34%, on Friday to settle at $17.78 a troy ounce after hitting a session high of $17.99, a level not seen since January 2015.
On the week, silver futures surged 88.9 cents, or 5.26%, tracking strong gains in gold. For the month, silver soared 15%.
Also on the Comex, copper for July delivery spiked 5.2 cents, or 2.33%, on Friday to end at $2.283 a pound. For the week, New York-traded copper prices inched up 1.4 cents, or 0.44%.
Copper traders will be looking out for private sector data on China's manufacturing sector due on Tuesday, amid ongoing concerns over the health of the world's second biggest economy.
The official China's manufacturing purchasing managers' index published Sunday dipped to 50.1 last month from 50.2 in March, compared to expectations for a reading of 50.4.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 2
European Central Bank President Mario Draghi is due to deliver a speech titled "The future of financial markets: A changing view of Asia" at the Asian Development Bank annual meeting, in Frankfurt.
Later in the day, the U.S. Institute of Supply Management is to publish a report on manufacturing activity, while San Francisco Fed President John Williams will speak at a public event.
Tuesday, May 3
China is to release data on the private sector Caixin manufacturing index.
The Reserve Bank of Australia will publish its interest rate decision.
In the U.S., both Cleveland Fed President Loretta Mester and Atlanta Fed President Dennis Lockhart are scheduled to speak.
Wednesday, May 4
The U.S. is to release the monthly ADP nonfarm payrolls report as well as data on the ISM non-manufacturing index, while the U.S. Energy Information Administration is to release its weekly report on oil stockpiles.
Thursday, May 5
China is to release data on the private sector Caixin services index.
The U.S. is to release weekly data on initial jobless claims, while Atlanta Fed's Lockhart, Dallas Fed President Rob Kaplan, St. Louis Fed President James Bullard and San Francisco Fed's Williams are all due to participate in a panel discussion titled "International Monetary Policy and Reform in Practice" at the Hoover Institute conference.
Friday, May 6
The U.S. is to round up the week with the closely watched nonfarm payrolls report.