By Paddy Power Trader

Most of the major financial press reporting on the Dubai news from yesterday and the request for a debt stand still at Dubai World raising the spectre of default in the Middle Eastern trading hub. (FT – Frontpage/WSJ/Times)

S&P lowered its ratings on several Dubai government-owned companies (BBG/RTRS)

S&P says the rating actions are the result of the announcement on Nov. 25 of the restructuring of the debt obligations of Dubai World and its subsidiary, Nakheel. They say such restructuring may be considered a default under their criteria and represents the failure of the Dubai government to provide timely financial support to core government-related entity. Furthermore, Moody’s says cuts 6 Dubai government- related-issuers, may cut further.

UK

BOE’s Sentance said that Britain’s economy probably began growing again in the second half of the year and has a good chance of getting back on the path to low inflation growth next year. (Sky News)

Sentance also said that consumer and business confidence had started to recover and global pressures had eased, although it will take some time for official figures to reflect any return to growth.

Spending falls “will lead to more bankruptcies”. (Times)

Insolvency specialists are poised for a fresh bout of bloodletting in the retail sector next year. About 86% of practitioners believe that a decrease in spending this year will spark the collapse of a new wave of retailers, despite improving sentiment and rising sales figures, according to a survey conducted by R3.

The UK median pay award stayed unchanged at 2% in the three months through October, Incomes Data Services said. The result was the same as in the third quarter. (BBG)

US

T-notes finished higher on Wednesday, but prices were constrained to a 10 tick range in early trade on lighter volumes ahead of the Thanksgiving holiday. However, t-notes rallied following another stellar auction, this time a USD 32bln 7 year note, which showed good demand and impressive indirect awards, and thus solidified the view that demand for US debt continues to be strong. At the pit close t-notes finished up 11+ at 120.14+. At 0641 GMT UST’s were trading up 9 ticks to 120.24 maintaining the bid from yesterday’s auction and getting a lift from weaker Asian equity markets and thin volumes.

USD 32bln 7y note auction drew yields of 2.835% vs. Exp. 2.878%, b/c 2.76 vs. Avg. 2.73 (Prev. 2.65) and indirects 62.5% vs. Avg. 62.4 (Prev. 59.35%). 87.98% of the issuance allotted at high. (BBG)

iboxx Treasury Index month-end extension +0.11 yrs

Europe

ECB’s Nowotny says expects Euro zone inflation to be compatible with ECB’s price stability goal in 2010 and says mid-term inflationary risks small and manageable. Also says recovery not yet self-sufficient. (RTRS)

Nowotny also said that the ECB will phase out liquidity measures to avoid inflationary risks.

Asia

Lead 10-year Japanese government bond futures edged higher to match a seven-week high, supported by the JPY’s rise that pushed it up close to a 14-year peak against the USD. JGBs were trading at 139.48 (+0.13) at 0616 GMT. (RTRS)

Geopolitical World Economics

German foreign minister says nuclear-armed Iran would be unacceptable and patience is limited on nuclear fuel deal. (RTRS)

In related news, Iran’s demand for changes to a nuclear fuel deal is unacceptable because it could mean Tehran keeping enough enriched Uranium for possible use in an atom bomb, the UN nuclear watchdog chief said.

Forex

The USD fell to its lowest in 14 years against the JPY, breaking through JPY 87.00 and triggering sell orders which also helped send it to a fresh 15-month low on the USD index. (RTRS)

In related news, the Japanese finance minister and one of his deputies said they had no plans to intervene to try to stop the JPY’s rise.

Australian business investment slipped unexpectedly last quarter but a sharp upward revision to spending plans supported policy makers’ optimism about the economy and left intact the case for an imminent rise in interest rates. (RTRS)

Australian Business Investment (Q3) Q/Q -3.9% vs. Exp. +1.0%.

Euro zone expects no immediate results from Trichet, Juncker, Almunia FX trip to China. (RTRS)

Euro zone realises 2 months is too soon for CNY change and 2 yrs would be too long. Also seeks convergence of understanding on CNY with China from Nov. 29 talks and to seek more regular economic talks with China which are not possible in G7, G20 format.

Commodities

Oil was steady above USD 77 a barrel in holiday-thinned trade, after rising 2% the previous day, buoyed by the USD’s sharp fall and a lower-than-expected build in US crude inventories. WTI crude futures were trading at USD 77.31, down USD 0.65, at 0611 GMT. (RTRS)

The IEA does not think rapid growth in Chinese oil demand will lead to a rally in crude oil prices next year, the agency’s executive director Tanaka said. (RTRS)

Spot Gold hit a record high at 1195.13 as the USD stumbled further and sentiment remained solid on expectations of more central bank buying of bullion. (RTRS)

The market is highly sensitive to speculation of more bullion buying by central banks looking to diversify foreign exchange reserves, particularly in Asia, after a newspaper report that India is open to buying more Gold from the IMF following its purchase of 200 tonnes earlier this month. The IMF had no comment on the report.

IMF announces the sale of 10 metric tons of gold to Sri Lanka Central Bank. (RTRS)

The sale was conducted on the basis of market prices prevailing on Nov. 23 and the proceeds of the sale equivalent to USD 375mln. Furthermore, IMF says transaction is part of total sales of 403.3 metric tons approved by the board in Sep.

Company News

For spread betting equities make sure to to read our broker recommendations. For news on any company reporting earnings today we have a guide to financial statements.

UK

Miners – Mining companies cut spending on exploration for nonferrous metals by 42 percent this year, ending six straight years of increases, according to a study by Metals Economics Group. (BBG)

GlaxoSmithKline – US FDA cancels Dec. 16 advisory panel review of co.’s Tykerb, review was cancelled because issues in question ‘have been resolved.’ (RTRS) In other news, Canada is still investigating an unusually higher rate of a side effect know as anaphylaxis from a batch of the drug maker’s swine flu vaccine. (BBG)

Vodafone – Co. intends to close its GBP 755mln final salary pension plan to about 4,000 of its employees in April. (FT)

Royal Dutch Shell – Co. said Ann Pickard is set to take the helm of its Australian business in 2010 as the unit prepares to “go into major spend mode” with liquefied Natural Gas projects. Pickard, who oversees co.’s exploration and production in Africa, is expected to move to Australia towards the end of the first quarter. (BBG)

BHP Billiton /Rio Tinto – BHP dismissed talk that rival Rio Tinto was baulking at a proposed USD 116bln joint venture in iron ore, insisting the two are close to a binding agreement. BHP’s CEO said he can’t comment on market speculation about a bid for Rio Tinto Group. (BBG)

Cadbury - Hershey is seeking OK from Pennsylvania Attorney-General for deal regarding co. according to reports. The philanthropic trust that manages Hershey is attempting to obtain the approval of Pennsylvania AG for the company’s potential takeover bid for co., according to several inside sources. Hershey is trying to get the blessing of the AG, Republican Tom Corbett, for the potential USD 17bln deal in order to ensure that Corbett does not derail the potential Merger. (WSJ) In other news, investor Nelson Peltz, the billionaire who pressured co. to spin off its drinks unit, sold part of his stake as speculation of rival bids for the co. pushed up the stock. (BBG)

SABMiller – Femsa’s plans to sell its beer division to co. are unlikely to result in a transaction before the end of the year according to sources. However there was market talk that co.’s planned sale of its beer division may be off. (Sources)

Johnson Matthey – Co. is proposing to switch all employees from a final salary pension program to a career average salary program next year after it went from a pension surplus to a deficit of GBP 174mln. (FT)

OTHER UK COMPANIES

National Express – Co. chairman said a GBP 460mln Rights Issue will be “resoundingly agreed” at today’s extraordinary meeting. (FT)

Mitchells & Butlers – FY ptp down 23.9%, no dividend, says first 8 weeks of financial year have started well. (BBG)

DSG – Co. like-for-like sales up 1% in last 8 weeks, H1 underlying sales down 1% with like-for-like sales down 4% underlying retail profit GBP 10mln vs. a loss of GBP 6.3mln last year. (BBG)

US

Equities finished higher as the USD index fell following the release of a flurry of positive economic data from the US which saw weekly jobless claims fall to their lowest level since September 2008. The basic materials and oil and gas sectors led stocks higher with financials the only underperformer due to ongoing concerns over near term profitability. At the closing bell, the S&P 500 closed up 0.44% at 1110.55, the DJIA closed up 0.29% at 10464.02 and the NASDAQ 100 closed up 0.42% at 1793.67.   

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GE – Co. may be closer to selling control of NBC Universal to Comcast after co. CEO met with NBC’s minority owner Vivendi, two people with knowledge of the situation said. In other news, the FDA, in a memo released ahead of Dec. 8 meeting, says co.’s Omniscan associated with most reported cases of disorder. (WSJ/RTRS/BBG)

Johnson and Johnson – FDA approves JNJ unit’s Intelence. (BBG)

Bristol-Myers/Eli Lilly – Cos. cancer treatment Erbitux helped reduce pain and nausea in patients with a rare, precancerous stomach disorder, in a small trial. (BBG)

Oracle – Co. to argue case for Sun deal to European Union regulators on Dec. 10. (RTRS)

DirectTV – Co. wins judge’s approval to settle shareholder lawsuit after co. was sued in May over Liberty Entertainment Merger. (BBG)

Hershey – Co. is seeking OK from Pennsylvania Attorney-General for Cadbury deal according to reports. The philanthropic trust that manages co. is attempting to obtain the approval of Pennsylvania AG for the company’s potential takeover bid for Cadbury, according to several inside sources. Co. is trying to get the blessing of the AG, Republican Tom Corbett, for the potential USD 17bln deal in order to ensure that Corbett does not derail the potential Merger. (WSJ)

AIG - Co.’s employees unwinding the co.’s derivatives may leave in March if they do not get their promised retention bonuses, said a lawyer representing some of the workers. (BBG)

Alcoa – Co. and Vale may build aluminium smelters in Colombia, requiring investments of more than USD 2bln per plant, once prices for the metal rebound, according to Energy and Mining Minister Hernan Martinez. (BBG)

Europe

GERMANY

Bayer – FDA review found the risk of a serious skin disorder is greater with MRI imaging contrast agents made by co. , GE Healthcare and Covidien. (BBG)

SAP – The world’s biggest maker of business-management software, believes demand is stabilising in emerging markets. (FT Deutschland)

K+S – Co. says will sell new shares in a rights offer, raising as much as EUR 686.4mln to improve its balance sheet. Co. plans to sell as many as 26.4mln new shares priced at EUR 26 each. Co. shareholders will receive an indirect subscription and are entitled to acquire 4 shares in return for 25 shares held. (BBG)

Daimler – Co. could come more under the ownership of Aabar, the state-owned Abu Dhabi-based fund. (Handelsblatt)

Deutsche Lufthansa – BMI said it sees a prolonged downturn in “business-type travel”, as it said a restructuring of regional operations may lead to as many as 600 jobs being cut. (BBG)

FRANCE

France Telecom – Co. expressed confidence that its plan to merge its Swiss operations with those of Denmark’s TDC A/S will be approved by competition officials. (FT)

Vivendi – GE may be closer to selling control of NBC Universal to Comcast after co. CEO met with NBC’s minority owner co., two people with knowledge of the situation said. In other news, co. asked a Paris court to block French investors from participating in a shareholder class action in New York, saying they were looking to find a more lucrative verdict. (BBG)

Danone – Co. to repurchase EUR 1.7bln of Bonds to reduce debt and lower its average cost of debt from next year. (BBG)

AXA SA – Co. expects to complete the full buy-out of AXA Asia Pacific “one day or the other”. Under a planned two-way takeover, the Australian wealth giant AMP will take the AXA Asia Pacific’s domestic life insurance and wealth businesses then sell on its Asian operations to the French company for USD 7.7bln. (Sidney Morning Herald)

EDF – Co. CEO says co. has enough cash to fund new nuclear projects as well to cover maintenance. But ruled out any investment in Areva SA. (WSJ/Le Figaro) Co. CEO also says wants to bring co. and Veolia closer, has no intention of merging with them. (RTRS)

EADS – Co. cautious against “misinterpretation of figures taken out of context” while A400M customers are still in negotiations regarding the troubled program. RTRS yesterday suggested A400M project may be saved only by hiking the unit cost, but cited one unnamed customer. (BBG)

Veolia Environnement – Co. may shelve the sale of a 49% stake in its British water division after bids fell short of its expectations, two people familiar with the process said. (BBG)

PAN-EUROPEAN

Telefonica - Co. buys 21% stake in Prisa’s Digital Plus worth EUR 470mln. (RTRS)

Repsol – Co. 2009 gross interim dividend EUR 0.425 per share vs. EUR 0.525 a year earlier. (RTRS)

Companies paying Dividend: Enel SpA (EUR 0.1000)

SWISS

Roche – Co.’s arthritis and lymphoma medicine Rituxan cut the need for insulin treatment among patients with type 1 diabetes after a year, a study found. (BBG)

Asia

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