Magna International (MGA) has reported that it has won a contract to make the new generation of frames for General Motors’ (MTLQQ) full-size light-duty pickups and sport utility vehicles despite their disputed relationship over the Opel deal. According to Magna, the new third generation of frames would replace GMT 900, which is the frame for Chevrolet’s Suburban, Tahoe and Silvarado models.  Magna will manufacture the frames at its Cosma unit in St. Thomas, Ontario, and the Saltillo plant in Mexico. The St. Thomas plant has been manufacturing frames for General Motors (hereafter, GM) since 1999 and the Saltillo plant currently builds the GMT 900. The Canadian auto parts maker has not disclosed the value of the deal. Magna’s relationship with GM has suffered over the former’s acquisition of the Opel/Vauxhall business in Europe from the latter.  GM had granted a preliminary approval to sell a ...

By Cees Bruggemans, Chief Economist FNB

The forces arraigned against the Rand are rather formidable and no collapsed corporate deals seem to matter too much. The Rand is rising and will rise.

Pushing the Rand higher are the major central banks at the global centre (New York, Frankfurt, Tokyo, Zurich, London), keeping interest rates near zero and encouraging outward liquidity leakage towards faster growing and still outperforming yield destinations in the global periphery.

Pulling the Rand higher are a smattering of central banks located in the global periphery as they start increasing their rates, led by the Bank of Israel two weeks ago, but last week followed by the Reserve Bank of Australia, with others expected to follow serially in coming months.

With their growth reviving, small output gaps, house prices and employment rising and industrial activity recovering, these central banks are uncomfortable with their too low interest rates imposed during

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General Motors will choose a preferred bidder for a controlling stake in its European Opel/Vauxhall business today. The deal has become a race between two suitors, Canada-based auto parts supplier Magna International (MGA) and Brussels-based industrial investment group RHJ International.   GM sits uncomfortably in the deal amidst the German government’s bias towards Magna. This is because Magna has vowed to make most of its job cuts outside Germany if it wins the deal. Both the suitors had indicated they would cut Opel’s workforce by a fifth – about 10,000 jobs – to make the unit financially viable. GM is in a dilemma fearing that Magna, backed by Russia’s Sberbank, could capture Opel's technology for the Russian car industry. Thus, if Magna wins the deal, GM may lose Russia’s increasingly important market for its models such as Chevrolet. Magna and Sberbank are planning to manufacture Opel cars ...

Gold pared gains on Friday as the euro retreated from highs against the dollar in the wake of second-quarter GDP data from the United States.

Spot gold was bid at $935.10 an ounce at 1325 GMT, against $933.30 an ounce late in New York on Thursday. It earlier hit a session high of $939.65. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange edged up 50 cents to $935.40 an ounce.

The euro gave up ground against the U.S. currency after data released on Friday showed the U.S. economy contracted at a slower-than-expected pace in the second quarter, which analysts said backs views the recession is winding down.

“The U.S. GDP data was fairly good; it is still contracting but at a much slower pace, much better than the first quarter,” said Andrey Kryuchenkov, an analyst at VTB Capital.

“But the personal consumption data wasn’t so good,” he added.

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The Financial Times has an interesting one on Magna's gamble (as a Trojan horse for Russia) to snap up GM's interests in Opel to give the weakened Oleg Deripaska "ownership" of what would be the largest car manufacturer in the world.  Motivating this aggressive business move is not business sense, nor even elaborate geopolitical machinations to impact the German polity, but rather fears over the collapse of industry and the spread of more "Pikalyovo-like" protest events.  At least according to some people interviewed for this piece.

"If the Opel deal does not go ahead, Russia's car industry is only going to survive with the help of the state because it is just not competitive," says Elena Sakhnova, industry analyst at VTB Capital, the Russian investment bank.

Gaz and Avtovaz are significant employers

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Gold steadied today,  Tuesday, erasing earlier gains, as the dollar recovered lost ground against a basket of currencies, reducing the precious metal’s appeal as an alternative asset.

Traders are awaiting fresh direction from the foreign exchange markets after a meeting of G8 leaders later this week.

Spot gold was bid at $922.65 an ounce at 1544 GMT, against $924.00 an ounce late in New York on Monday, having earlier touched a high of $931.55.

U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange eased $1.20 to $923.10 an ounce.

With physical demand sluggish despite a price dip, the gold market is largely being driven by currency moves, traders said.

The precious metal edged lower on Tuesday as the dollar  recovered earlier losses against a basket of currencies. The euro, which was earlier lifted by better-than-expected German factory orders, retreated to turn lower.

“The pick-up in the dollar has put some pressure

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Accompanying Barack Obama to Moscow are US business chiefs: a joint venture between Boeing and VSMPO-Avisma, a Russian titanium producer, may be among the projects kick started.  Businessweek reports on Russia-US relations in terms of investment.   Putin says that Russia does not intend to extend the farm machinery tariffs that have been damaging to US manufacturers.  An article in the Times suggests that 'how well' Russia has handled the financial crisis gives the Kremlin an advantage in their negotiations with Obama.  Russia may base the 2010 budget on $55 oil, says Finance Minister Alexei Kudrin.  Farmers will reportedly harvest 5.6% less grain this year than initially predicted.  The CEO of Rushydro, Vasily Zubakin, plans to buy 1.95 million shares in the company this month.  Putin has tried to give the car industry a boost ...

The markets were able to hold onto gains during a turbulent day, as the Dow closed at 8740.87. The NASDAQ was up 0.44% closing at 1836.80, with the S&P 500 up 0.20% closing at 944.74. The 10-year saw prices fall once again, closing with a yield of 3.609%. Crude was down settling at $68.55, while August gold headed in the opposite direction settling at $984.40 as the dollar continues to fall.

Ford [F: 6.41, +0.28 (+4.57%)] reported that sales fell 24% during May while GM [GM: 0.00, 0.00 (0.00%)], Toyota [TM: 80.99, -0.73 (-0.89%)], and Chrysler reported that sales fell 29%, 41%, and 47% decline respectively. Ford, which is the only major US car company not in bankruptcy, reported that it’s Ford, Lincoln, and Mercury brands captured the most market share since 2006. Ford has been able

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That the president of the United States of America is now creating the business plan for an automobile company is surely a sign of something big.

Yesterday was a holiday in the US. Little news from that quarter.

But while Americans were enjoying their backyard barbecues, the rest of the world turned.

“Obama plans ‘leaner’ car industry,” says the BBC.

While most readers will focus on the last three words of that sentence, we direct your attention to the first two. The subject is the important part… not the predicate.

That the car industry may or may not get ‘leaner’ is of little interest to us. It will do what it needs to do. But that the president of the United States of America is now creating the business plan for an automobile company is surely a sign of something big. The world has already turned… perhaps more than we realize.

It was only a few

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Russia's international reserves rose $6.1 billion last week as the central bank bought foreign currency to slow down the rise of the ruble as oil prices increase.  The Moscow Times reports upon efforts to reduce Russia's dependence upon imported poultry by developing the domestic industry.  A lawsuit launched by a car dealer against the government's increase in tariffs on used cars has been rejected.  Debt-addled car manufacturer AvtoVAZ has approved a cost-cutting anti-crisis plan and the company will spend $2.54 billion from 2010 to 2012 to bolster sales.  The government continues its attempts to support the car industry; the Industry and Trade Ministry has proposed doubling the price ceiling for buying cars that could be subsidized by the government.  In the bid for Opel, carmaker GAZ reportedly has the role of 'industrial partner' in Canadian ...