>>> Asian Update

Asian Mid-session Update: Dollar slides further after Fed minutes; Japan trade deficit narrows further

***Economic Data***
- (JP) JAPAN JAN MERCHANDISE TRADE BALANCE: -¥1.18B V -¥1.68TE; ADJ TRADE BALANCE: -¥406.1B (smallest deficit in 32 months) V -¥598BE
- (JP) JAPAN DEC FINAL LEADING INDEX CI: 105.6 (3-month high) V 105.2 PRELIM; COINCIDENT INDEX: 110.7 V 110.7 PRELIM
- (NZ) NEW ZEALAND JAN ANZ JOB ADVERTISEMENTS M/M: -1.1% V 2.2% PRIOR
- (NZ) NEW ZEALAND FEB ANZ CONSUMER CONFIDENCE INDEX: 124.0 V 128.9 PRIOR; M/M: -3.8% V +1.9% PRIOR
- (NZ) NEW ZEALAND Q4 PPI OUTPUT Q/Q: -0.1% (3rd straight decline) V -1.1% PRIOR; PPI INPUT Q/Q: -0.4% (3rd straight decline) V -1.5% PRIOR

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.4%, S&P/ASX -0.3%, Kospi closed, Shanghai Composite closed, Hang Seng closed, Mar S&P500 -0.1% at 2,093

***Commodities/Fixed Income***
- Apr gold +0.4% at $1,216/oz, Apr crude oil -2.9% at $51.25/brl, Mar Copper -0.4% at $2.61/lb
- (US) API PETROLEUM INVENTORIES: CRUDE: +14.3M (6th consecutive and multi-year high build) v +3.7Me, GASOLINE: +1.3M v +0.5e, DISTILLATE: -2.7M v -2Me
- UNG: CME lowers margin requirements on Natural Gas futures; Raises margins for Gasoline
- GLD: SPDR Gold Trust ETF daily holdings fall 0.3 tonnes to 768.0 tonnes; lowest since Feb 4th
- SLV: iShares Silver Trust ETF daily holdings rise to 10,086 tonnes from 9,963 tonnes prior; highest since Jan 21st
- (JP) Japan investors bought net ¥435B in foreign bonds v bought ¥200B in prior week; Foreign investors bought net ¥114B in Japan stocks v sold ¥477B in prior week

***Market Focal Points/FX***
- The yield on the US 10-year note was down nearly 10bps, reversing some of the 50bp rise of the past 2 weeks, and greenback sank while gold rallied in the wake of surprisingly dovish FOMC policy meeting minutes. Some of the market chatter went as far as to opine that Fed chair Yellen waded into the global currency war, with the meeting pointing directly at the US dollar strength as posing a headwind to US exports and growth. External concerns, specifically slowdown in China and global disinflationary pressure, were also increasingly more visible in the language perceived to be rather cautious by the markets. Finally, many participants referred to the risk of dropping the "patient" language as a signal of a shift in market expectations for the beginning of policy firming and were worried that "financial markets might overreact". US Dollar extended its slide in the holiday-thinned Asian session, falling below 118.50 in USD/JPY while EUR/USD rose above 1.1420 - about 80pip loss for the greenback for both pairs relative to the pre-minutes levels.

- Electronic trade in the energy markets was particularly volatile after API showed crude oil inventories jumping by over 14 million barrels - the biggest build in years and well above 3.7M expected. WTI Apr crude contract fell nearly 3% below $51/brl before a modest bounce. Spot gold traded up over $15 to $1,217 from levels seen just before the minutes release.

- News flow was extremely light in Asia with much of the region closed for Lunar New year. Japan dominated headlines, posting the smallest trade deficit on adjusted basis in nearly three years. Exports were up 17% - a 15-month high and well above 13.5%e - as shipments to US, China, and broader Asia all rose by double digits. Exports to Europe were up by a more modest 7.4%, though still impressive given the economic malaise in the area. Imports were also down 9% - the biggest decline in years - with volume shipments of oil also down 7%. Economist with SMBC noted exports would likely continue to recover in the coming months as US economy expands. Separately in Japan, Sankei press speculated the BOJ may consider formally delaying the timing of achieving 2% inflation target beyond the FY15/16 year, potentially rephrasing its stance with a more vague objective. Outside Japan, Australia earnings season remained active but to the advantage of the bears, with shares of WesFarmers and DrillSearch as the most notable decliners on earnings.

***Equities***
US markets:
- SNPS: Reports Q1 $0.80 v $0.63e, R$542M v $544Me; +5.2% afterhours
- MAR: Reports Q4 $0.68 v $0.65e, R$3.56B v $3.47Be; +3.3% afterhours
- FL: Raises quarterly dividend 14% to $0.25/shr, implied yield 1.9%; Board approves $1B share repurchase program (13.1% of market cap); +1.9% afterhours
- DLPH: Reportedly will sell assets to Mahle for over $700M; deal to be announced within days - press; +1.9% afterhours
- ABX: Reports Q4 $0.15 v $0.12e, R$2.51B v $2.51Be; +1.0% afterhours
- MRO: Reports Q4 $0.00(adj) v $0.03e, R$2.49B v $2.29Be; -0.6% afterhours
- CAR: Reports Q4 $0.23 v $0.18e, R$1.89B v $1.94Be; -0.6% afterhours
- ARII: Reports Q4 $1.06 v $1.09e, R$150.5M v $178Me; -3.8% afterhours
- SCTY: Reports Q4 reconciled Non-GAAP adj EPS -$1.33 v -$1.26e, R$71.8M v $72.2Me; -5.5% afterhours

Notable movers by sector:
- Consumer Discretionary: RXP Services RXP.AU -6.0% (H1 results); Super Retail Group SUL.AU +7.5% (H1 results); Crown Limited CWN.AU +7.9% (H1 results); Skymark Airlines 9204.JP -19.4% (JAL to not sponsor Skymark); Japan Airlines Corp 9201.JP -1.9% (FY15 guidance); Adastria Holdings 2685.JP +7.2% (despite cut in FY14/15 guidance)
- Financials: Investa Office Fund IOF.AU -3.8% (H1 results); WesFarmers Limited WES.AU -2.0% (H1 results)
- Materials: Metcash MTS.AU +2.3% (acquisition); PanAust PNA.AU -6.6% (FY14 results); Drillsearch Energy DLS.AU -7.0% (H1 results)
- Technology: Iinet IIN.AU -10.1% (H1 results); Trend Micro 4704.JP +5.9% (FY14 results)

>>> 19 Feb. 2015

Nestle, Schneider Electric, Swiss Re, Centrica to report earnings. French January inflation rate may show prices falling from a year earlier, according to economists. ECB to publish account of monetary policy meeting for first time. Spain and France to sell bonds. Sweden and France to sell linkers.


EARNINGS all times CET:
* Aegon (AGN NA) 7:30am
* Aeroports de Paris (ADP FP) post-mkt
* Air France-KLM (AF FP) 7:15am. Preview, conf. call
* BAE Systems (BA/ LN) 8am. Preview
* Cap Gemini (CAP FP) pre-mkt
* Centrica (CNA LN) 8am. Preview
* CNP Assurances (CNP FP) 7:30am
* Dialog Semiconductor (DLG GR) 7:30am
* Essilor (EI FP) pre-mkt
* Gecina (GFC FP) post-mkt
* Natixis (KN FP) 8am
* Nestle (NESN VX) 7:15am Preview, conf. call
* OMV (OMV AV) 7:30am. Preview, conf. call
* Randstad (RAND NA) 7:15am
* Rexam (REX LN) 8am
* Schneider Electric (SU FP) 8am. Preview
* Societe Television Francaise (TFI FP) 8am
* Sports Direct (SPD LN) 8am, 3Q sales
* Swiss Re (SREN VX) 7am
* Topdanmark (TOP DC) noon

>>> After Hours: BJRI +10.8%, SIX +4.5%, MAR +3.1%, NLST -1

After Hours Summary: BJRI +10.8%, SIX +4.5%, MAR +3.1%, NLST -16.7%, EOG -7.2%, SCTY -5.1% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: BJRI +10.8%, SIX +4.5%, TRN +4.4%, SNPS +4.1%, XPO +3.1%, MAR +3.1%, IPI +2.8%, MIC +2.2%, WMB +0.7%, IAG +2.2%, CRMT +2%, UIHC +1.1%, LOPE +1.1%, PCYC +0.9%, THRX +0.8%, EPE +0.7%, EXAM +0.5%, AVG +0.4%, NVMI +0.2%, EVTC +0.1%, UFPI +0.1%, AIMC +0.1%, TILE +0.1%

Companies trading higher in after hours in reaction to news: IAG +2.2% (announced total attributable proven and probable gold reserves decreased by 15% or 1.5 million ounces to 8.6 million ounces of gold at the end of 2014; co also reported earnings), FL +1.9% (approved new $1 bln share repurchase program, a 67% increase; approved $220 million capital expenditure program for 2015; also increased quarterly dividend to $0.25 from $0.22/share), EPE +0.7% (announced 2015 capital budget, estimates for production volume growth and an update on its multi-year commodity hedges; co targeting $1.2-1.3 bln in oil and gas expenditures)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: NLST -16.7%, CYBE -13.6%, CSLT -12.6%, KEYW -9.1%, YUME -9%, EOG -7.2%, SCTY -5.1%, ARII -3.8%, SUNE -3.7%, ARRS -3%, BGS -2.8%, DENN -2.7%, CDE -1.9%, RGLS -1.5%, DRII -0.7%, CAR -0.6%, MRO -0.5%, WES -0.4%, LDRH -0.4%, OIS -0.3%, ASGN -0.2%, HSTM -0.1%

Companies trading lower in after hours in reaction to news: OCRX
-18.4% (announced preliminary topline results from Phase 2a investigator-sponsored study evaluating OCR-002; differences in plasma ammonia levels between treatment arms did not reach statistical significance),
NLST -16.7% (announced common stock offering), MRO -0.9% (announced a $3.5 bln capital, investment and exploration budget for 2015; a further 20% decrease since December's capital budget update) 

>>> Oil M&A taking a back seat to alternative structures in near term

Oil M&A taking a back seat to alternative structures in near term  

Oil and gas producers will increasingly talk M&A and asset sales if oil prices remain near USD 50 per barrel, but are first exploring other structures to manage through the period, energy industry sources say.

Likely buyers and sellers have not found commond ground on pricing, and upstream companies under financial pressure are not yet in capitulation mode. That has buyers starting to think more creatively about how to structure new investments.

Few fire sales

Falling commodity prices have put many upstream companies in a precarious position. They see not only a drop in earnings but also the prospects of smaller borrowing base and reduced access to high yield debt and equity issuance markets. Many companies have announced deep cuts to capex and face an eventual drop in production.

In contrast, a growing group of well-funded corporate and financial buyers are preparing to make deals, yet few are expecting to clean up on fire sales.

One reason is that banks will not force most companies to act immediately. It will be at least a month or two before companies know where they stand with lenders as the banks begin their semi-annual borrowing base re-assessments, said Keith Behrens, managing director, energy group head, Stephens, Inc., speaking on the sidelines of IPAA Private Capital Conference in Houston last month.

Most upstream operators are well-hedged, and have used high-yield bonds or other instruments to extend debt maturities well into the future - so they can withstand negative cash flow for some period of time, said Scott Joyce, managing director and head of upstream oil & gas for BNP Paribas, also speaking on the sidelines of the IPAA Private Capital Conference. It could be early 2016 before distressed situations really begin to arise in earnest, and only if the current low price environment continues through the year, he said.

Companies over their covenants by 5% to 15% will likely be able to work out arrangements with lenders, who can “kick the can down the road,” Behrens said. Lenders will not be able to ignore overages by 25%, he said. Such companies are evaluating multiple options to pay down or refinance that bank debt, Behrens said, and selling assets or the company is last on the list.

Options include replacing bank debt with second lien term loans or mezzanine financing project equity arrangements, volumetric production payments (VPP); or farm-ins.

So-called project equity structures like the type of financing Linn Energy (NASDAQ:LINE) just arranged with GSO Capital could become common, said Behrens during prepared remarks at IPAA Private Capital. Lenders in that space include GSO Capital, IOG Capital, Old Ironsides, Stellus, and Encino Energy, Behrens said during his presentation. Linn announced last month that GSO, a unit of Blackstone, had agreed to commit USD 500m to finance its drilling program in return for owning a percentage of the wells.

The Linn/GSO deal could be copied by other operators. For example, Magnum Hunter Resources (NYSE:MHR), which has a data room open now for Ohio Utica/Marcellus assets, could think about a similar transaction structure, according to a recent report by Mergermarket.

VPPs offer another avenue for recapitalizing bank debt, Behrens said. VPPs are structured investments where an upstream operator sells production from a field or property that expires after delivering a specified total aggregate volume or a particular length of time.

Farm-in in favor

Upstream companies do not see this as a good time to sell proved, developed and producing (PDP) assets for cash, said Josh Batchelor, managing partner and co-founder of private equity firm Sage Road Capital, also on the sidelines of the IPAA Private Capital Conference. Buyers who can get creative in using non-cash structures, such as farm-ins or other options, are seeing more success, said Batchelor and a third industry banker.

Farm-ins essentially involve trading a working interest in return for some or all drilling costs, and can help companies plug an oil-price-induced spending plan deficit. The structure allows the buyer to get a foot in the door on high quality assets that they may not have the cash to buy outright. And of course, both parties share in the upside.

On a recent quarterly earnings call, when Apache Corp. (NYSE:APA) CEO John Christmann was asked to comment on the M&A landscape, he noted that farm-ins were an attractive option, saying "If things stay where they are there's a lot of folks that are significantly outspending. There [are] a lot of clocks on acreage. We're seeing things pop up right now and for drilling a well we can earn pretty big acreage blocks."

Offshore Gulf of Mexico producers Stone Energy (NYSE:SGY) and Energy XXI (NASDAQ:EXXI) both identified farm-outs as attractive ways to preserve capital in the current environment, according to recent reports by Mergermarket.

A&D angles

Companies that must consider sales are not wont to dispose of their crown jewels at current prices, said a fourth banker. As a result, current assets on the market fail to excite buyers.

Deals are “hard to get done” right now because the assets being offered are not of high enough quality, said Mike McMahon, managing director of private equity firm Pine Brook Road Partners. Sellers may need to have a higher component of PDP properties to enable transactions to occur, said Jason Lindmark, vice president of business development, Merit Energy, also speaking on the sidelines of the IPAA conference.

Rather than part with production, upstream companies could first look to sell midstream assets, said Vance Scott, partner and leader of A.T. Kearney’s Americas Energy Practice. Such deals will be attractive as midstream assets will command a premium, he said.

Midstream asset divestitures are expected to be the “primary avenue of acquisition growth” for MLPs in 2015, said Brian Kessens, managing director portfolio director, Tortoise Capital. Kinder Morgan’s announced acquisition of Hiland Partners, owned by Harold Hamm, the CEO of Continental Resources (NYSE:CLR), is an example of such a trend, Kessens pointed out.

If low oil prices persist, a larger number of companies will become more interested in a combination, the fourth banker said. Using equity as currency would allow both sides to participate in the upside, without having to time it exactly, the banker speculated.

Buyers and sellers seem to agree that equity is attractive, because it is expected to go up in value when prices return, said Mike Bock, co-founder, Petrie Partners during a Q&A panel during the IPAA event. But companies selling in a low price environment need cash, and not equity, to de-lever, disagreed a sixth industry banker, who said he hasn’t seen seller interest in equity.

Several companies seeking buys also noted that assuming a seller's debt in a deal would be more attractive than issuing new debt, as the high yield market is expected to tighten for oil and gas names.

All the same, buyers will be wary of triggering change of control provisions that require bonds to be redeemed at par value, said Geoff Davis, managing director, Morgan Stanley, speaking on the sidelines of the NAPE Business Conference in Houston on 11 Feb. Deals structured as asset sales don’t require buyers to take on the seller's debt, and that could be a more attractive option, he said.

>>> US Close Dow-0,10% S&P-0,03% Nasdaq+0,14% Russell+0,24%


Closing Market Summary: Stocks End Flat While FOMC Minutes Show Dovish Colors

The major averages finished the Wednesday session on a flat note thanks to a late afternoon crawl that lifted the market off its low. The S&P 500 ended unchanged while the Nasdaq outperformed, adding 0.1%.

For the second day in a row, stocks opened with slim losses and drifted inside narrow ranges until the early afternoon. The S&P 500 spiked off its low and made a brief appearance in the green following the FOMC minutes from the January meeting, but the index was back near its low just 30 minutes later. A second effort in the late afternoon propelled the S&P 500 back to its flat line ahead of the close.

It was a bit surprising to see the market react rather lackadaisically to the FOMC minutes, considering they revealed a high likelihood that the Fed will not be raising rates any time soon due to several risks including declining inflation and weak global growth.

Meanwhile, the Treasury market heard the message and responded with a rally. The 10-yr note reclaimed about half of yesterday's decline with the benchmark yield dropping six basis points to 2.08%. On a related note, the dollar surrendered its intraday gain following the minutes.

The FOMC minutes overshadowed afternoon reports from the Wall Street Journal indicating the European Central Bank will extend Greece's Emergency Liquidity Assistance allowance by EUR3.50 billion to EUR68.50 billion for two weeks. However, that may not be enough next week when Greece's government runs out of cash, according to Kathimerini. German ECB members have recently opposed using ELA funds to finance governments, which may explain the limited scope of the increase.

Furthermore, Greece's government spokesperson said the government plans to request an extension to the current loan agreement. Until now, Germany has opposed granting unconditional extensions so it remains to be seen whether the request is granted.

Six of ten sectors posted gains, but only three—industrials (+0.6%), consumer staples (+0.6%), and utilities (+2.4%)—added more than 0.3%. On the flip side, financials (-0.6%) surrendered their gain from yesterday while the energy sector (-1.2%) was responsible for much of the early weakness.

The energy sector weighed as crude oil returned to yesterday's intraday low, falling 2.7% to $52.12/bbl.

Elsewhere among cyclical sectors, industrials rallied behind heavyweights like Boeing (BA 151.17, +1.25), General Electric (GE 25.25, +0.08), and Deere (DE 92.75, +2.83) with shares of DE getting a boost after it was reported Berkshire Hathaway invested in the company during Q4.

Transport stocks also contributed to the strength of the industrial sector with the Dow Jones Transportation Average adding 0.4%. Airlines led the way thanks to lower oil prices with United Continental (UAL 66.72, +1.79) surging 2.8%.

Another cyclical group—consumer discretionary (-0.1%)—caught up to the market by the end of the day, but was pressured early by apparel retailers after Fossil (FOSL 83.69, -15.63) disappointed with its earnings/guidance and discussed currency headwinds—a concern that could be echoed by its peers in the coming weeks.

Once again, today's participation was well below average with just 716 million shares changing hands at the NYSE floor.

Economic data included Housing Starts, PPI, Industrial Production, Capacity Utilization, and MBA Mortgage Index:
  • New housing starts declined 2.0% in January to 1.065 million from a downwardly revised 1.087 million (from 1.089 million) in December while the consensus expected a drop to 1.070 million 
    • After a big rush in single-family starts in December, new single-family construction fell back to November levels, dropping 6.7% to 678,000 from 727,000 in December 
  • Producer prices declined 0.8% in January after declining an upwardly revised 0.2% (from -0.3%) in December while the consensus expected a decline of 0.4% 
    • A large portion of the decline resulted from falling energy prices with prices of total energy goods declining 10.3% in January after a 6.2% drop in December. Gasoline prices dropped 24% in January 
    • Food prices fell 1.1% in January after declining 0.1% in December 
    • Excluding food and energy, core PPI declined 0.1% in January after increasing 0.3% in December while the consensus expected an uptick of 0.1% 
  • Industrial production increased 0.2% in January after declining a downwardly revised 0.3% (from -0.1%) in December while the consensus expected an increase of 0.4% 
    • Manufacturing production increased 0.2% in January after being flat in December, which was in-line with the national ISM Production Index. The index softened slightly in January to 56.5 from 57.7 in December 
  • The weekly MBA Mortgage Index fell 13.2% to follow last week's 9.0% decline 
Tomorrow, weekly Initial Claims (consensus 295K) will be released at 8:30 ET while January Leading Indicators (consensus 0.3%) and the Philadelphia Fed Survey for February (consensus 8.5) will cross at 10:00 ET.

( Makor Oscar Gruss)REX LN/BLL initial thoughts on valuation



Working with a 610p takeover price for Rexam PLC (LSE-REX) (0.081 BLL & 210p per share), 1.5% of Revs synergies ($215M), $100M deal expenses (paid using cash), 5.5% deal debt interest rate, 35% tax rate; this is before any required divestitures, which look likely given high market shares and concentrated markets in N.A., Europe and Brazil. Pre-deal, REX LN (441p 20 day average closing price ending 2/4/15) trading multiples were 1.1x EV/Revs, 8.0x EV/EBITDA (13.6% margin) and 13.0x P/E (34p); Ball Corp. (NYSE-BLL) ($65/share 20 day price) trading multiples were 1.45x EV/Revs, 9.9x EV/EBITDA (14.6% margin) and 16.9x P/E ($3.84 EPS); and other major competitor Crown Holdings Inc. (NYSE-CCK) ($46.40/share 20 day price) trading multiples are 1.2x EV/Revs, 8.2x EV/EBITDA (13.9% margin) and 13.0x P/E ($3.56 EPS).

REX LN at 610p would be a 38% price premium to the prior 20 day average price; takeover multiples are 10.2x EV/EBITDA and 17.9x P/E. BLL at current $76/share price is trading at a 17% price premium to its prior 20 day price; the trading multiples are 11.2x EV/EBITDA and 19.8x P/E. The BLL multiples combined with REX LN (no synergies) are 10.9x EV/EBITDA ($2.03B, 14.1% margin) and 19.4x P/E ($3.92 EPS, 2% accretive). Using the $215M synergy estimate, the BLL trading multiples are 9.9x EV/EBITDA ($2.25B, 15.6% margin) and 16.4x P/E ($4.64 EPS, 21% accretion).

At 538p, REX LN is trading at a 12% discount to the potential 610p deal price; the stock is up 22% from the prior 20 day average price. Since 2/5/15, BLL is up 6% and CCK is up 7%. The REX LN price reflects a predeal discount and antitrust concerns (if a transaction is announced).

DISCLAIMER

This information represents neither an offer to buy or sell any security nor, because it does not take into account the differing needs of individual clients, investment advice. Those seeking investment advice specific to their financial profiles and goals should contact their Oscar Gruss & Son Incorporated sales representative. Oscar Gruss & Son Incorporated believes this information to be reliable, but no representation is made as to accuracy or completeness. This information does not analyze every material fact concerning a company, industry, or security. Oscar Gruss & Son Incorporated assumes that this information will be read in conjunction with other publicly available data. Matters discussed here are subject to change without notice. There can be no assurance that reliance on the information contained here will produce profitable results. A security denominated in a foreign currency is subject to fluctuations in currency exchange rates, which may have an adverse effect on the value of the security upon the conversion into local currency of dividends, interest, or sales proceeds. The value of securities and depositary receipts of foreign issuers that are denominated in United States dollars are also influenced by fluctuations in currency exchange rates.

>>>FOMC Release 18/02/2015


>>> Many participants inclined to stay at zero for longer given weak inflation and other risks
"Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time."

>>> Inflation Commentary
* Although the measure of inflation compensation over the next 5 years based on Treasury Inflation-Protected Securities (TIPS) increased, inflation compensation 5 to 10 years ahead declined further to its lowest level in a decade.
* The staff's forecast for inflation in the near term was revised down, as further sharp declines in crude oil prices since the December FOMC meeting pointed toward a somewhat larger transitory decrease in the total PCE price index early this year than was previously projected.
* Participants noted that inflation had moved further below the Committee's longer-run objective, largely reflecting declines in energy prices and other transitory factors. A number of participants observed that, with anchored inflation expectations, the fall in energy prices should not leave an enduring imprint on aggregate inflation. It was pointed out that the recent intensification of downward pressure on inflation reflected price movements that were concentrated in a narrow range of items in households' consumption basket, a pattern borne out by trimmed mean measures of inflation. Several participants remarked that inflation measures that excluded energy items had also moved down in recent months, but these declines partly reflected transitory factors, including downward pressure on import prices and the pass-through of lower energy costs to the prices of non- energy items. Nonetheless, several participants saw the continuing weakness of core inflation measures as a concern. In addition, a few participants suggested that the weakness of nominal wage growth indicated that core and headline inflation could take longer to return to 2 percent than the Committee anticipated. In contrast, a couple of participants suggested that nominal wage growth provides little information about the future behavior of price inflation. Participants also discussed the possibility that, because of the infrequent occurrence of reductions in nominal wages, wages may not have fully adjusted downward in the period of high unemployment, and therefore pent-up wage deflation might have weighed on wage gains for a time during the expansion. If this was the case, nominal wage growth could be expected to pick up in coming periods and to resume a more normal relationship with labor market slack. Most participants expected that continuing reductions in resource slack would be helpful in returning inflation over the medium term to the Committee's 2 percent longer-run objective, but a few participants voiced concern that nominal wage growth might rise rapidly and inflation might exceed 2 percent for a time.

>>> FOMC MInutes: Oil Comments
* Over the intermeeting period, amid trading that was volatile at times, longer-term sovereign yields in the United States and other advanced economies declined. These moves were attributed in part to a deterioration in market sentiment associated with downward pressure on inflation, increased concern about the global economic outlook, and announced and anticipated foreign central bank policies. Moreover, continued sharp declines in oil prices and U.S. economic data releases that were viewed by investors as a bit weaker than anticipated, on balance, reportedly weighed on sentiment.
* The effects on the largest banking firms of the sharp decline in oil prices and developments in foreign exchange markets appeared limited, although other institutions with more concentrated exposures could face strains if oil prices remain at current levels for a prolonged period.
* Several saw those risks as having diminished over the intermeeting period, with lower oil prices and actions of foreign central banks both being supportive of growth abroad, but others pointed to heightened geopolitical and other risks.
* Recent declines in oil prices, which had boosted household purchasing power, were among the factors likely to underpin consumer spending in coming months; other factors cited as supporting household spending included low interest rates, easing credit standards, and continued gains in employment and income.
* Several participants noted that there were signs of layoffs in the oil and gas industries, and that persistently low energy prices might prompt a larger retrenchment of employment in these industries. In addition, it was observed that if capital investment in energy-producing industries slowed significantly, it could damp the overall expansion of economic activity for a period, especially if the slowing took place after most of the positive effects of lower energy prices on growth in household spending had occurred.

>>> Foreign Outlook
In their discussion of the foreign economic outlook, participants noted that a number of developments over the intermeeting period had likely reduced the risks to U.S. growth. Accommodative policy actions announced by a number of foreign central banks had likely strengthened the outlook abroad. The decline in energy prices was also seen as potentially exerting a stronger-than-anticipated positive effect on growth in the domestic economy and abroad. However, the increase in the foreign exchange value of the dollar was expected to be a persistent source of restraint on U.S. net exports, and a few participants pointed to the risk that the dollar could appreciate further. In addition, the slowdown of growth in China was noted as a factor restraining economic expansion in a number of countries, and several continuing risks to the international economic outlook were cited, including global disinflationary pressure, tensions in the Middle East and Ukraine, and financial uncertainty in Greece. Overall, the risks to the outlook for U.S. economic activity and the labor market were seen as nearly balanced.

>>> Dollar Concerns
* The staff's outlook for economic activity over the first half of 2015 was revised up since December, in part reflecting an anticipated boost to consumer spending from declines in energy prices. However, the forecast for real GDP growth over the medium term was little revised, as the greater momentum implied by recent spending gains and the support to household spending from lower energy prices was about offset by the restraint implied by the recent appreciation of the dollar.
* However, the increase in the foreign exchange value of the dollar was expected to be a persistent source of restraint on U.S. net exports, and a few participants pointed to the risk that the dollar could appreciate further.

>>> Keep Rates at Lower Bound
Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time. Some observed that, even with these risks taken into consideration, the federal funds rate may have already been kept at its lower bound for a sufficient length of time, and that it might be appropriate to begin policy firming in the near term. Regardless of the particular strategy undertaken, it was noted that, provided that the data-dependent nature of the path for the federal funds rate after its initial increase could be communicated to financial markets and the general public in an effective manner, the precise date at which firming commenced would have a less important bearing on economic outcomes.

>>> Comment on Patient
Many participants regarded dropping the "patient" language in the statement, whenever that might occur, as risking a shift in market expectations for the beginning of policy firming toward an unduly narrow range of dates. As a result, some expressed the concern that financial markets might overreact, resulting in undesirably tight financial conditions. Participants discussed some possible communications by which they might further underscore the data dependency of their decision regarding when to tighten the stance of monetary policy.

(BFW) Greek ETF Pares 5.4% Loss After ECB Said to Increase ELA Funding


Greek ETF Pares 5.4% Loss After ECB Said to Increase ELA Funding
2015-02-18 19:09:00.697 GMT


By William Maloney
(Bloomberg) -- GREK intraday chart
* Currently down 3.4%
* NOTE: Earlier, ECB said to increase ELA funding for Greece
to Eu68.3


For Related News and Information:
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To contact the reporter on this story:
William Maloney in New York at +1-212-617-6437 or
wmaloney3@bloomberg.net
To contact the editors responsible for this story:
Larry DiTore at +1-212-617-1603 or
lditore@bloomberg.net
Stefanie Batcho-Lino

(CCN) Talisman Energy Receives Shareholder Approval for Acquisition by Repsol


BN 02/18 18:27 *TALISMAN ENERGY GETS HOLDER APPROVAL FOR PURCHASE BY REPSOL
Talisman Energy Receives Shareholder Approval for Acquisition by Repsol
2015-02-18 18:27:23.413 GMT


NEWS RELEASE TRANSMITTED BY Marketwired

FOR: Talisman Energy Inc.

TSX SYMBOL: TLM
NYSE SYMBOL: TLM

FEBRUARY 18, 2015

Talisman Energy Receives Shareholder Approval for Acquisition by Repsol

CALGARY, ALBERTA--(Marketwired - Feb. 18, 2015) - Talisman Energy Inc.
(TSX:TLM) (NYSE:TLM) announced today that the holders of its Common Shares and
Preferred Shares have approved the proposed arrangement under which Repsol
S.A., through a wholly-owned subsidiary, is to acquire all of the outstanding
shares of Talisman. Of the votes cast, over 99% of holders of each class of
shares voted in favour of the agreement at the special meeting of shareholders
held earlier today.

The completion of the arrangement remains subject to the granting of a final
order by the Court of Queen's Bench of Alberta, the receipt of required
regulatory approvals and the satisfaction or waiver of other customary closing
conditions. It is anticipated that the completion of the transaction will occur
in the second quarter of 2015 and all regulatory approvals are on track.

Talisman Energy Inc. is a global upstream oil and gas company, headquartered in
Canada. Talisman has two core operating areas: the Americas (North America and
Colombia) and Asia-Pacific. Talisman is committed to conducting business
safely, in a socially and environmentally responsible manner, and is included
in the Dow Jones Sustainability (North America) Index. Talisman is listed on
the Toronto and New York stock exchanges under the symbol TLM. Please visit our
website at www.talisman-energy.com.

-30-

FOR FURTHER INFORMATION PLEASE CONTACT:

Talisman Energy Inc. - Media and General Inquiries
Brent Anderson
Manager, Corporate Communications
403-237-1912
tlm@talisman-energy.com
or
Talisman Energy Inc. - Shareholder and Investor Inquiries
Lyle McLeod
Vice-President, Investor Relations
403-767-5732
tlm@talisman-energy.com


INDUSTRY: Energy and Utilities - Oil and Gas

SUBJECT: TMN

-0-

-0- Feb/18/2015 18:27 GMT