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Indonesia's finance minister may go by Feb: report
JAKARTA (Reuters) - Indonesia Finance Minister Sri Mulyani Indrawati, a top reformer in President Susilo Bambang Yudhoyono's cabinet, may be replaced by February, the Jakarta Post reported, quoting anonymous sources from a political party. Indrawati and Vice President Boediono are considered the main drivers of reform in Southeast Asia's biggest economy and play a critical role in attracting foreign investment for infrastructure and other projects.The loss of one or other from the cabinet would severely dent investor confidence in Indonesia's commitment to reform and would hit the rupiah currency, bonds and stocks.Both technocrats have been questioned in recent weeks by a parliamentary committee over their decision to bail out Bank Century, a small bank, at the height of the 2008 financial crisis in order to avert a wider financial panic.Officials from the Golkar Party, the political party headed by tycoon Aburizal Bakrie who has long resisted Indrawati's reforms, were quoted by the Jakarta Post saying that the finance minister would probably be replaced by Anggito Abimanyu, head of the fiscal policy agency.President Yudhoyono was re-elected in July thanks to his government's economic policies, reforms, and efforts to tackle corruption.Indrawati and Boediono, who was governor of the central bank at the time, both approved the 6.7 trillion rupiah ($729.4 million) government rescue of Bank Century late in 2008 as Indonesia started to feel the impact of the global financial crisis.

Markets to Peak in Late January: Strategist
By: JeeYeon Park CNBC News Associate
Markets opened lower on Friday and Marc Pado, U.S. market strategist at Cantor Fitzgerald, speculated investors will be taking in profits ahead of the three-day weekend. What should we expect going forward? He shared his market insight.“We’re headed into a strong earnings season, we’re moving higher,” Pado told CNBC.“We expect to reach some sort of peak in the last week of January and then we’ll be set up for a correction.”Pado said the markets have rallied for 10 months and now may see a “substantial pullback.” He added that high unemployment rates will also be a catalyst for bringing the market lower.“In the near-term, you do have to go to the defensive stocks and then we’re looking for a shift to technology back in the summer, because technology really is leading the way and will continue to lead the way in the long term,” he said.

Week Ahead: Earnings Will Call the Tune for Stocks
By: Patti Domm CNBC Executive Editor
Earnings will be a challenge for stocks in the coming week, as major bank and tech firms report, along with hundreds of other companies.Traders on the floor of the New York Stock Exchange.The question, though, is whether earnings news will be strong enough to keep the rally going or investors will see it as an excuse to take profits temporarily.The latter was the case Friday, when tech giant Intel [INTC Loading... () ] fell after reporting better-than-expected profits and an improved outlook. JPMorgan Chase [JPM Loading... () ] stock also fell, and its report raised the flag on other bank stocks after loan losses and weaker-than-expected revenues outweighed a strong income number. Both stocks had moved higher ahead of their reports."We think the reaction is overdone. The issue for equity markets in earnings is really, about, in our view, the multiple," said Binky Chadha, chief U.S. equities strategist at Deutsche Bank.

http://www.cnbc.com/id/34886508

Euro-Region Strains May ‘Undermine’ Currency, Citigroup Says
(Bloomberg) -- The euro may be hurt by fiscal turmoil within the 16-nation union, Citigroup Inc. said. “The sharpening internal strains illustrate that the euro- zone is far from being an optimal currency union,” Michael Hart, a foreign-exchange strategist in London, wrote yesterday in a report. “These internal strains are independent of the external value of the euro but will in turn continue to undermine it.”

Euro May Fall on Wider Greek-German Spread, Deutsche Bank Says
(Bloomberg) -- The euro may extend its decline against the dollar as the premium investors demand for holding Greek bonds instead of benchmark German securities continues to rise, according to Deutsche Bank AG. The difference in yield, or spread, between 10-year Greek debt and German bunds “could widen out beyond the peak of circa 300 basis points,” Adam Boyton, a senior currency strategist in New York at Deutsche Bank, wrote in a research note. “This would suggest some modest downward pressure on euro-dollar.” The euro traded at $1.4377 as of 12:10 p.m. in London from $1.4499 last week. The yield spread between Greek and German bonds was at 272 basis points after reaching 282 basis points earlier. It climbed to 300 basis points in March. A further indicator that the euro may decline is the weakening correlation between the Greek-German bond spread and the Standard & Poor’s 500 Index of stocks, which traditionally have both been driven by “risk sentiment,” according to the bank.
The decline in the correlation is “significant from a foreign-exchange perspective as it arguably has much more information content for the euro than a co-movement with other measures of risk on-risk off,” Boyton wrote. “Hence, it would not be surprising to see the correlation between the euro-dollar and peripheral bond spreads pick up further should this environment persist.”Deutsche Bank forecasts the euro will fall to $1.40 by the end of this year, according to data compiled by Bloomberg.

Gold May Drop in Asia as Dollar Strength Dims Investment Demand
(Bloomberg) -- Gold, little changed in Asia, may decline for a second day as the dollar strengthened, eroding demand for the precious metal as an alternative investment. Bullion held by the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, fell for a second straight day to 1,112.84 metric tons on Jan. 15, according to the company’s Web site. The dollar rose to a one-week high against the euro on speculation Greece’s struggle to contain its budget deficit will deter investors from buying the region’s assets.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPiFZgN76D3s

For ‘Safe’ Investors, This May Be a Challenging Year
By: Jeff Sommers The New York Times
Money market funds are paying investors next to nothing.More precisely, the 100 biggest funds are now paying 0.05 percent annually, on average, a yield as low as it has ever been, according to Peter G. Crane, the president of Crane Data of Westborough, Mass. “It’s so low it’s a joke,” Mr. Crane said. “At that yield, it would take more than 1,000 years to double your money.” This microscopic rate of return is part of the continuing fallout of the financial crisis — a consequence of the very loose monetary policy of the Federal Reserve and other central banks. They have held their benchmark short-term rates at rock-bottom levels while using unorthodox methods, known as “quantitative easing,” to restore the health of the global financial system.

http://www.cnbc.com/id/34897996

Expect Dow 11,500-13,000 This Summer: Strategist
Markets are digesting mixed economic data over weakness in the jobs market, retail and government efforts to hold bailed-out bankers accountable. Will stocks prove to be resilient and go higher? Paul Schatz, president of Heritage Capital, and Andrew Kanaly, chairman of Kanaly Trust Company, weighed in. “The market’s setting up for a very routine, healthy, normal pullback of 4 to 7 percent,” Schatz told CNBC.“Maybe we have a percent or two left on the upside in the next week to 10 days.”Schatz said he expects markets to pull back up to 7 percent into late February before the rallying into the summer.“We’ll get to Dow 11,500 to 13,000,” he said. “It will be fairly broad-based—semiconductors, energy services and I like utilities—a lot of sectors are going to participate in that last rally.”

http://www.cnbc.com/id/34861924