Friday, 30 August 2013

Consumer Spending in U.S. Rises Below Forecast on Incomes

By Michelle Jamrisko - Aug 30, 2013 6:53 AM PT
Consumer spending in the U.S. rose less than forecast in July as income growth slowed, indicating further job gains are needed to sustain household purchases.
Consumer purchases, which account for about 70 percent of the economy, rose 0.1 percent after a revised 0.6 percent increase the prior month that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.3 percent rise. Incomes increased 0.1 percent, down from 0.3 percent the previous month.
Consumer Spending in U.S. Increased in July for a Third Month
Stronger property values are helping bolster household purchases of appliances and automobiles even in the face of rising mortgage rates, supporting home improvement retailers such as Lowe’s Cos. and Home Depot Inc. Photographer: Ty Wright/Bloomberg
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A bigger pickup in job growth and wage gains are needed to help consumer spending overcome weak global demand. Rising mortgage rates threaten to derail the household purchases of appliances and automobiles that have supported home improvement retailers such as Lowe’s Cos. (LOW) andHome Depot Inc. (HD)
“It’s difficult for consumers to increase their spending” as Americans face “concern about the stability of the labor market, whether they’re going to have their jobs” as well as the need to rebuild savings, said Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly projected the rise in incomes. “There is some pent-up demand out there still.”

Stock Prices

U.S. stocks fluctuated, with the Standard & Poor’s 500 Index headed for its biggest monthly loss since May 2012, after the consumer spending data were released and as concerns overSyria eased. The S&P 500 (SPX) rose less than 0.1 percent to 1,638.83 at 9:48 a.m. in New York.
Projections on spending ranged from no change to a 0.5 percent increase in the Bloomberg survey of 74 economists. The June reading previously was reported as a gain of 0.5 percent. The survey median called for incomes (PITLCHNG) to gain 0.2 percent.
Gross domestic product grew at a 2.5 percent annualized rate in the second quarter after a 1.1 percent gain in the first three months of the year, the Commerce Department reported yesterday. Consumer spending in the second quarter climbed at a 1.8 percent annualized rate after a 2.3 percent pace in the first three months of the year, the figures showed.
Adjusting consumer spending for inflation, purchases were unchanged in July compared with a 0.2 percent increase the previous month, according to today’s report.
The Commerce Department’s price index tied to spending, a gauge tracked by Federal Reserve policy makers, increased 1.4 percent in July from the same period in 2012. The core price measure, which excludes volatile food and energy categories, rose 1.2 percent from July 2012.

Job Gains

Faster job gains would help drive the wage increases needed to boost household purchases. Employers probably added 180,000 jobs in August, according to the Bloomberg survey median ahead of the Sept. 6 report from the Labor Department. Hiring gains averaged 197,500 a month in the first six months of this year, up from 180,000 in the second half of 2012.
Higher home prices, which have boosted household net worth, are propelling demand for washers, dryers and other expensive items that Americans were reluctant to buy in the housing downturn, Lowe’s Chief Executive Officer Robert Niblock said last week.
“Our second-quarter sales performance exceeded our expectations, due in part to strong demand for appliances and recovery in our garden department,” Carol B. Tome, chief financial officer at Atlanta-based Home Depot, said on an Aug. 20 earnings call.
Investors have taken note of the improving outlook. The Standard & Poor’s GICS Consumer Discretionary Sector Index, which encompasses companies that tend to be the most sensitive to swings in the economy including Home Depot, has climbed 5.7 percent through Aug. 28 since April 30. The S&P 500 Index is up 2.3 percent over the same period.
At the same time, some retailers, such as Target Corp. (TGT) of Minneapolis, are seeing the demand increase in autos and housing “crowding out spending on other goods and services,” Executive Vice President Kathee Tesija said on an Aug. 21 earnings call.
To contact the reporter on this story: Michelle Jamrisko in Washington at
To contact the editor responsible for this story: Christopher Wellisz at

Yen Gain Versus Majors on Emerging-Market Concern; Krone Slides

By Andrea Wong - Aug 30, 2013 8:34 AM PT
The yen gained against the majority of its 16 most-traded peers as investors bet the financial turmoil that has weighed on emerging-market assets in August has more to run, fueling demand for Japan’s currency as a haven.
The yen strengthened versus all but one of its major counterparts this week even as the threat of U.S.-led military action against Syria receded. The euro fell to a one-month low versus the dollar. Norway’s krone weakened for third day against the dollar after retail sales fell last month and unemployment climbed in August. India’s rupee headed for its biggest monthly loss in 20 years on concern a deepening economic slowdown will deter investors.
Aug. 30 (Bloomberg) -- Kathleen Brooks, a research director at, talks about the possible impact on financial markets of U.S. action in Syria and India's food program and its effect on the rupee. She speaks with Anna Edwards and Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
“This week has been obviously risk-off, calibrated by a stern speech in regards to Syria,” Fabian Eliasson, head of U.S. currency sales in New York at Mizuho Financial Group Inc. (8411), said in a phone interview. “Demand for yen was higher earlier in the week. The market was net-long dollar-yen and it triggered some stop-loss trades.” A long position is a bet an asset will increase in value, while a stop-loss is a pre-set order to sell when an asset reaches to a specific threshold.
The yen rose 0.5 percent to 129.56 per euro at 11:34 a.m. in New York, having appreciated 1.9 percent this week. Japan’s currency advanced 0.2 percent to 98.17 per dollar, set for a gain of 0.6 percent this week. The dollar climbed 0.3 percent to $1.3213 per euro after touching $1.3174, the strongest level since July 25.
The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 other major currencies, rose 0.1 percent to 1,034.80. It was headed for a 0.8 percent gain in August, the largest monthly gain since May.
U.S. financial markets will be shut Sept. 2 for Labor Day.

Syria Concern

The currencies of India, Mexico and Turkey have all slid more than 2 percent against the dollar this week as speculation the Federal Reserve is moving toward reducing stimulus sapped demand for higher-yielding assets, and the prospect of expanded conflict in the Middle Eastdamped risk-taking.
France signaled it might act as the principal U.S. ally in a military strike against Syria, filling a hole left by Britain after U.K. lawmakers rejected a mission to punish Syria’s use of chemical weapons. French President Francois Hollande said he still favors delivering a targeted blow, bypassing the United Nations Security Council if needed.
“The general concerns about emerging markets haven’t gone away,” said John Hardy, head of foreign-exchange strategy at Saxo Bank A/S in London. “As long as risk is off, the yen could strengthen further on unwinding of short positions. The fire is still burning and it appears that the cycle is not over yet.”

Krone, Rupee

The yen strengthened 1.8 percent this week, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar rose 1.1 percent, while the euro slipped 0.4 percent.
The krone dropped versus all except two of its 16 major counterparts today after Statistics Norway said retail sales excluding motor vehicles slumped 1.3 percent in July.
Seasonally adjusted unemployment climbed to 70,210 this month from 69,284 in July, according to the Norwegian Labor and Welfare Service.
The krone weakened 0.2 percent to 8.0859 per euro and dropped 0.5 percent to 6.124 per dollar.
India’s rupee gained 1.3 percent to close at 65.705 per dollar in Mumbai after slumping to a record 68.8450 on Aug. 28. The currency has declined 8.1 percent this month, the most since March 1992.

‘Negative Feedback’

“Markets are increasingly concerned about a negative feedback loop between the rupee and India’s fundamentals,” analysts at Standard Chartered Plc, including Mumbai-based Samiran Chakraborty, wrote in a research report yesterday. “That said, we think that worries about a 1991-style balance-of-payments crisis are exaggerated.”
India is liaising with other emerging markets on a plan to coordinate offshore currency interventions, Reuters reported, citing Dipak Dasgupta, India ministry’s principal economic adviser. Brazil central-bank’s press officer Gustavo Paul later said “there is no initiative of that sort.”
The U.S. currency headed for a weekly advance versus 11 of its 16 major peers after a report yesterday showed the economy grew faster in the second quarter than analysts predicted.
The dollar briefly fell after personal spending, which accounts for about 70 percent of the economy, rose 0.1 percent after a revised 0.6 percent increase the prior month that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.3 percent rise. Incomes increased 0.1 percent.
Fed policy makers are debating whether the economy is strong enough to allow them to pare monthly purchases of $85 billion in Treasuries and mortgage debt. Officials will reduce the amount at their next meeting on Sept. 17-18, according to 65 percent of economists in an Aug. 9-13 Bloomberg survey.
To contact the reporter on this story: Andrea Wong in New York at
To contact the editor responsible for this story: Dave Liedtka at

Thursday, 29 August 2013

European Stocks Rise, Erase Monthly Drop; Vodafone Surges

By Inyoung Hwang - Aug 29, 2013 2:41 AM PT
European stocks rose, snapping a three-day drop, as investors awaited data on U.S. economic growth and Vodafone (VOD) Group Plc surged to an 11-year high. U.S. index futures and Asian shares also climbed.
Vodafone jumped 9 percent after saying Verizon Communications Inc. is in talks to acquire its stake in their Verizon Wireless venture. A gauge of European telecommunications companies rose to a two-year high. Carrefour SA rallied the most in two months after posting a 4.9 percent increase in first-half profit. Zurich Insurance Group AG declined 2.3 percent as Chairman Josef Ackermann resigned.
European Stocks Advance as Vodafone Surges on Talks With Verizon Vodafone surged 8.6 percent to 205.65 pence, its highest price since January 2002. Photographer: Chris Ratcliffe/Bloomberg
The Stoxx Europe 600 Index added 0.5 percent to 299.44 at 10:39 a.m. in London, erasing its monthly drop. The gauge lost 2.2 percent in the past three days, closing yesterday at a six-week low, on concern the U.S. will take military action againstSyria. Secretary of State John Kerry this week said America will hold Syria accountable for the chemical-weapon attacks that opposition groups say killed as many as 1,300.
“I don’t think the Syria crisis will have that strong an impact on the markets on a longer-term horizon,” Tobias Britsch, who helps oversee $33 billion as European equities asset manager at Meriten Investment Management GmbH, said by telephone from Dusseldorf, Germany. “Over a six-to-12-month horizon, I’m quite optimistic for equity markets. We’re not out of the woods, but we’re in a better place than we were.”
The volume of shares changing hands in companies listed on the Stoxx 600 was 15 percent higher than the 30-day average, data compiled by Bloomberg showed. The Standard & Poor’s 500 Index futures gained 0.2 percent today, while the MSCI Asia Pacific Index rose 0.6 percent.

Growth, Unemployment

In the U.S., revised Commerce Department data at 8:30 a.m. Washington time may show the economy grew at a 2.2 percent annualized rate in the second quarter, according to a Bloomberg News survey, compared with the initial reading of 1.7 percent. A separate report may show applications for jobless benefits fell by 4,000 to 332,000 last week.
In Germany, unemployment unexpectedly increased in August, for the first time in three months. The number of people out of work increased by a seasonally adjusted 7,000 to 2.95 million, the Nuremberg-based Federal Labor Agency said. Economists in a Bloomberg survey had predicted a decline by 5,000. The adjusted jobless rate stayed at 6.8 percent, near a two-decade low.


Vodafone surged 9 percent to 206.4 pence, its highest price since January 2002. Europe’s biggest wireless carrier said it is in talks with Verizon to sell its 45 percent stake in their Verizon Wireless venture.
The transaction may be valued at $130 billion, people with knowledge of the matter said. At that price, the deal would be the biggest since Vodafone’s acquisition of Mannesmann AG in 2000 and would give the U.K. carrier’s finances a boost as it tries to revive operations hurt by Europe’s debt crisis.
A gauge of telecommunications stocks rallied the most since August 2011, posting the best performance among the 19 industry groups in the Stoxx 600. Telecom Italia SpA, Italy’s largest phone company, increased 3.1 percent to 0.50 euros. Orange SA climbed 2.4 percent to 7.76 euros.
Carrefour (CA) rose 4.8 percent to 23.87 euros, for its biggest increase since June 26. France’s largest retailer reported a 4.9 percent increase in first-half profit as more consistent pricing and improved store management helped stabilize domestic revenue. Recurring operating income advanced to 766 million euros ($1.02 billion), in line with the median analyst estimate of 767 million euros.

Melrose, WPP

Melrose Industries Plc (MRO) advanced 3.7 percent to 294.8 pence, its highest price since it sold shares to the public in October 2003. The owner of Brush Turbogenerators said first-half sales more than doubled from a year earlier.
WPP Plc climbed 4.1 percent to 1,226 pence. The world’s largest advertising company said first-half sales increased 7.1 percent on stronger growth in the U.K. and North America, helping counter a slowdown in Asia and Africa.
Baloise Holding AG (BALN) gained 1.8 percent to 99.45 Swiss francs. Switzerland’s third-biggest insurer said higher non-life sales pushed up first-half net income to 244.8 million francs ($265 million), from 218.3 million francs in the year-before period. The company also said it is on track to meet its financial targets.

Zurich Chairman

Zurich Insurance declined 2.3 percent to 229.10 francs. Ackermann is resigning from the board with immediate effect after the company’s finance chief Pierre Wauthier committed suicide. He will be replaced by Vice Chairman Tom de Swaan.
“The unexpected death of Pierre Wauthier has deeply shocked me,” Ackermann said in a statement. “I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be.”
Vienna Insurance Group AG lost 3.8 percent to 39.33 euros. Austria’s biggest insurer reported second-quarter pretax profit of 46.3 million euros, falling short of the average analyst estimate of 67.8 million euros.
Serco Group Plc tumbled 12 percent to 534.5 pence for the biggest drop since October 2008. The U.K. government said police are investigating suspected fraud by Serco staff in a contract for prisoner escorting and custodial services. The Ministry of Justice gave the company three months to improve governance and said the company may be excluded from all government contracts if it failed to do so.
To contact the reporter on this story: Inyoung Hwang in London at
To contact the editor responsible for this story: Andrew Rummer at

Dollar Seen Casting Off Euro Shackles as Fed Tapers: Currencies

By Joseph Ciolli - Aug 29, 2013 12:53 AM PT
The euro, more than any other currency, is responsible for the drop in the U.S. Dollar Index (BEUR) since March. Derivatives traders are betting that’s about to end as the Federal Reservereduces stimulus as soon as next month.
Traders are paying the biggest premium since September for options giving the right to buy the dollar versus the euro over those allowing for sales. The Dollar Index, which is 58 percent weighted toward the shared currency, will climb almost 5 percent to 85.8 by Dec. 31, from 81.806 today, according to the median forecast of 12 analysts in a Bloomberg survey.
Dollar Seen Casting Off Euro Shackles as Fed Tapers The dollar is already the second best-performer this year of major currencies tracked by Bloomberg Correlation-Weighted Indexes, rising 5.4 percent compared with the euro’s 6.1 percent advance. Photographer: Andrew Harrer/Bloomberg
Audio Download: Harvard’s Reinhart Discusses Fed and Emerging Marke
The dollar is already the second best-performer this year of major currencies tracked by Bloomberg Correlation-Weighted Indexes, rising 5.4 percent compared with the euro’s 6.1 percent advance. Further gains may be in store if the Fed reduces its $85 billion of monthly bond purchases, stemming the flow of cash to the 17-nation region.
“Tapering will eventually support the dollar against the euro,”Robert Lynch, a currency strategist at HSBC Holdings Plc inNew York, said in an Aug. 26 phone interview. “It will put some downward pressure on currencies that have been otherwise supported by the liquidity the Fed has been pumping into the economy.”

Risk Reversals

Futures traders are betting that the dollar will keep gaining versus major peers including the British pound, Japanese yen and the Canadian and Australian dollars, CFTC data show.
The premium on one-year options granting the right to buy the dollar against the euro, compared with those allowing for sales, increased to 2.1 percentage points yesterday, according to so-called 25-delta risk reversal rates. That’s the most since Sept. 11 and up from a premium of 0.98 percentage point on Feb. 1, data compiled by Bloomberg show.
“From the U.S. side of the story, in terms of the prospects of new positions, the risk-reward doesn’t favor a higher euro,” Paresh Upadhyaya, the Boston-based director of currency strategy at Pioneer Investment Management, which oversees $210 billion, said in an Aug. 27 phone interview. “But we still need the U.S. economy to surprise to the upside.”
The Dollar Index, which IntercontinentalExchange Inc. uses to monitor the greenback against the euro, yen, pound and the currencies of three other major U.S. trading partners, has fallen 1.1 percent since the end of the first quarter.

Euro Strength

In the same period, the dollar climbed versus 11 of its 16 most-traded peers tracked by Bloomberg, while weakening 3.4 percent against the euro. Europe’s common currency touched $1.3452 on Aug. 20, the highest level since Feb. 14, before trading at $1.3265 as of 8:44 a.m. in London
Global monetary easing has boosted European assets as the economy improves and investors speculate that the chance of a euro-region breakup has receded.
The Bloomberg Eurozone Sovereign Bond Index (BGSV) has rallied 19 percent from a low in November 2011, while the Bloomberg Global Developed Sovereign Bond Index has fallen 1.8 percent.
Futures traders increased bets that the dollar will weaken against the euro in the week ending Aug. 20, figures from the Washington-based Commodity Futures Trading Commission show.
The difference in the number of wagers on a decline in the greenback versus those on a gain -- or net shorts -- rose to 36,746, the most since Feb. 8 and up from 16,057 the prior week.

Dollar ‘Upside’

“Now that speculators are a bit long the euro, it creates a short-term opportunity for a squeeze that would work in the dollar’s favor,” HSBC’s Lynch said. “If economic conditions were to warrant it, this suggests upside for the dollar.”
The euro-area economy emerged from a record six quarters of recession in the April to June period, with gross domestic product growing 0.3 percent.
Citigroup’s Economic Surprise Index for the euro region has exceeded an equivalent measurefor the U.S. since June 26, with the difference reaching a peak at the end of last month.
The European gauge rose to 50.2 on Aug. 27, the highest level since March and up from minus 81.6 on April 29. Positive readings suggest economic releases have been generally better than analysts’ forecasts in Bloomberg surveys.
“This data is a big part of why the euro is doing well against the dollar,” Dan Dorrow, the head of research at Faros Trading LLC in StamfordConnecticut, said in an Aug. 27 phone interview. “The market has already priced in tapering in September. I just can’t see the Fed surprising the markets on the hawkish side.”

Policy Split

Fed Chairman Ben S. Bernanke told Congress on May 22 that the central bank could dial back the money printing it has used to boost growth should the economy improve.
Minutes of the Federal Open Market Committee meeting published Aug. 21 show that most members were “broadly comfortable” with a plan to trim stimulus in 2013, while 65 percent of economists surveyed by Bloomberg Aug. 9-13 anticipated tapering in September.
European Central Bank President Mario Draghi said in July that he won’t raise the region’s benchmark interest rate from a record-low 0.5 percent for an extended period, and reiterated the statement this month.
“The ECB is still biased, in contrast to the Fed, to providing a bit more stimulus or remaining in the camp of saying rates will be low for longer,” David Tulk, the chief macro strategist at Toronto-Dominion Bank’s TD Securities unit, said in an Aug. 26 phone interview. “That relative divergence in policy will play a role in dollar strength.”
To contact the reporter on this story: Joseph Ciolli in New York at
To contact the editor responsible for this story: Dave Liedtka at

Wednesday, 28 August 2013

U.S. Sees Multiday Syria Strikes as U.K. Goes to UN

By Leon MangasarianDana El Baltaji & Robert Hutton - Aug 28, 2013 8:05 AM PT
Green Sees No Purpose in Strikes on Syria. Related video:
U.S. officials planning potential military strikes on Syria aren’t limited to a one-day operation, an administration official said, as the UN Security Council’s permanent members considered a resolution condemning last week’s suspected chemical attack.
U.S. & Allies Move Closer to Syria Military Action
A Syrian rebel fighter takes aim at regime forces in the northern city of Aleppo on August 26, 2013. Photographer: Louai Abo Al-Jod/AFP via Getty Images
Aug. 28 (Bloomberg) -- Bloomberg News' Julianna Goldman reports on preparations for a United States strike against Syria as the White House works on a legal justification for the action. She speaks on Bloomberg Television's "In The Loop."
Aug. 27 (Bloomberg) -- Bloomberg contributor Richard Falkenrath identifies the four missile weapons systems most likely to be used in the event of an American intervention in the Syrian conflict. (Video from Department of Defense)
U.S. Moves With Allies Closer to Brink of Syria Military Action
Syrian government forces patrol on a devastated street in the central city of Homs, July 31, 2013. Photographer: Joseph Eid/AFP via Getty Images
U.S. Secretary of Defense Chuck Hagel
U.S. Secretary of Defense Chuck Hagel told the BBC that the U.S. has "assets in place" and forces are "ready to go." Photographer: Paul J. Richards/AFP via Getty Images
The U.S. and its allies are still working to define goals for a military strike on Syria, said the official, who asked not to be identified discussing war-planning efforts. U.K. Prime Minister David Cameron said today the United Nations resolution offered by his country would authorize action to protect civilians in Syria.
U.S. and British officials say there’s little doubt that Syrian President Bashar al-Assad’s forces are responsible for the chemical attacks near Damascus that opposition groups say killed more than 1,300 people. The head of the UN said its inspectors in Syria need time to establish the facts.
The U.K. resolution would allow the use of “all necessary measures under Chapter 7 of the UN Charter to protect civilians from chemical weapons,” Cameron’s office in Londonsaid in an e-mailed statement. The veto-wielding permanent Security Council members -- the U.S., U.K., Russia, China andFrance -- were meeting in New York to discuss the draft. Russia, an ally of Syria with a naval base in the country, has so far opposed moves to censure Assad’s government.

Possible Moves

Having ruled out an operation aimed at overthrowing Assad, the Obama administration is seeking to clarify its objectives, plan for possible retaliatory moves by Assad to strike out against allies and neighbors and establish the legal justification for an attack before committing itself to military action, the official said. Assad and his government have denied using chemical weapons.
UN chemical inspectors today visited the site of alleged attacks in the Ghouta area, near Damascus, UN Secretary-General Ban Ki-moon said at a news conference in The Hague. The inspectors, who now have spent two days at the site, need a total of four days to complete their investigation, Ban said.
“The team needs time to do its job,” Ban said. “It is essential to establish the facts.”
The alleged attack has fueled calls for deeper global involvement in the 2 1/2-year Syrian civil war, with Saudi Arabia’s Foreign Minister Prince Saud al-Faisal calling for a “decisive and serious international stance,” the state-run Saudi Press Agency reported today.

Intelligence Assessment

As part of the U.S. buildup toward action, President Barack Obama plans to release an intelligence assessment of the Aug. 21 attack in Ghouta, and his administration has begun consultations with congressional leaders.
Cameron discussed the “serious response” with Obama last night, adding that it will be “specific to the chemical-weapons attack,” according to an e-mailed statement from his office. Cameron summoned Parliament back from its summer recess to debate the matter tomorrow.
The U.K. National Security Council met today and “agreed unanimously” on a recommendation that the cabinet will consider tomorrow, according to an e-mailed statement from Cameron’s office that didn’t give specifics of the plan.
“Ministers agreed that the Assad regime was responsible for this attack and that the world shouldn’t stand idly by, and that any response should be legal, proportionate and specifically to protect civilians by deterring further chemical weapons use,” according to the statement.

Held Accountable

The North Atlantic Treaty Organization said the use of chemical weapons in Syria “is unacceptable and cannot go unanswered.” Information from “a wide variety of sources points to the Syrian regime as responsible,” NATO said in a statement after representatives of 28 allied governments met in Brussels.“Those responsible must be held accountable.”
French President Francois Hollande recalled Parliament to meet Sept. 4, the government said today.
The U.S. is concerned that allowing the Syrian government to go unpunished would send a signal to other countries including North Korea that have large inventories of chemical weapons, as well as making it likely that the Assad government will attack civilians with such weapons again, the U.S. official said.
Obama officials are still in consultations with NATO allies including the U.K., France, Germany, and Turkey as well as Arab nations to determine which countries would participate in a military strike on Syria, the official said.

Military Options

Among options being explored are how to deter and degrade Syria’s chemical-weapons capability and defeat the Assad government’s defense capability, another U.S. official said.
“The Americans, the British and others say that they know that chemical weapons have been used; what we have been told is that this evidence is going to be shared with us,” Lakhdar Brahimi, the UN and Arab League special envoy to Syria, told a news conference in Geneva today. “It hasn’t been until now, and we will be very interested to hear what this evidence is.”
Brahimi said that “international law is clear: It says military action must be taken after a decision by the Security Council.”
It’s “premature” to talk about a UN resolution authorizing measures against Syria while the investigation is continuing, the Interfax news agency cited Russian Deputy Foreign Minister Vladimir Titov as saying.

‘Assets in Place’

Defense Secretary Chuck Hagel told the BBC in comments aired yesterday that the U.S. has “assets in place” and forces are “ready to go.” Another U.S. official said a no-fly zone over Syria or using troops on the ground aren’t being considered.
The U.S. has repositioned naval assets in the Mediterranean in case the Obama administration decides to take military action, the first official said. The U.S. has supplied Turkey with two Patriot batteries that can shoot down short- and medium-range missiles.
Israel’s military bolstered defenses near the northern border, deploying a second Iron Dome missile defense system outside the city of Haifa and putting an Arrow missile defense battery on alert for medium-range weapons, the Ynet news site reported, without saying where it got the information.
The confrontation with Syria will be at the forefront when Obama, Cameron and Hollande join other leaders of the Group of 20 nations next week in St. Petersburg, Russia. The host for the summit is Russian President Vladimir Putin, an ally of Assad who has thwarted previous action against Syria at the UN and questioned whether a chemical attack took place.
One U.S. official who asked not to be identified said the timing of any decision or a military attack isn’t tied to the summit on Sept. 5 and Sept. 6.

Chinese Signal

China has also signaled opposition. The People’s Daily newspaper, published by the ruling Communist Party, carried an editorial today saying that some countries had passed a “verdict” on Syria before all facts were in and that action should only be taken in response to reliable investigations.
Iranian Supreme Leader Ayatollah Ali Khamenei said a strike on Syria would be a “disaster for the region,” according to the state-run Iranian Students News Agency. “This kindling of fire is like a spark in a room stocked with explosives because the consequences of it are unknown,” he was quoted as saying today in a meeting with officials.

Markets Slump

The prospect of a military confrontation has rumbled through markets. Stock markets in the Middle East slumped for a second day today. West Texas Intermediate crude surged to the highest price since May 2011.
More than 100,000 people have been killed in the Syrian conflict since it began in March 2011, and more than 2 million refugees have poured into neighboring countries, according to the UN.
In Syria, Foreign Minister Walid al-Muallem said yesterday the government won’t surrender. “We have the means to defend ourselves, and we will surprise people with them,” he told a news conference in Damascus.
“It’s important to send a message to Assad that this is not about regime change but also to send a message that hurts,” Volker Perthes, director of the Berlin-based German Institute for International and Security Affairs, which advises Chancellor Angela Merkel’s government, said in an interview.
To contact the reporters on this story: Leon Mangasarian in Berlin at; Dana El Baltaji in Dubai at; Robert Hutton in London at
To contact the editor responsible for this story: Andrew J. Barden at