OVERSEAS MARKETS

Gloom keeps investors cautious as most Asian markets gain
Shares across Asia saw moderate gains Thursday as investors were reminded of dismal economic conditions. The MSCI index of Asia-Pacific shares outside Japan climbed 0.3% by midday, Tokyo's Nikkei 225 rose 0.5%, and shares in Singapore dropped more than 1%. Stocks in South Korea, Taiwan and Hong Kong also fell, while Australian shares gained 1.6%. International Herald Tribune/Reuters (19 Feb.)

Hedge funds up when equities see poor performance
The Credit Suisse/Tremont Hedge Fund Index rose 1.09% last month, its first move into positive territory since the second quarter of 2008. Hedge funds turned in gains during a time when the Dow Jones Industrial Average and the S&P 500 were both down about 11%. InvestmentNews (17 Feb.)

German bonds fall as European stocks attract investors
Surprisingly good earnings news from several European banks caught the attention of investors Wednesday, diminishing the appeal of German government notes and drawing money into bank stocks. After declining to its lowest level since at least 1990, the yield on the two-year German note reversed direction and started edging up. Bloomberg (18 Feb.)

Comments by Indian central bank's governor spur bonds
Duvvuri Subbarao, governor of India's central bank, said more interest-rate cuts are possible. Subbarao's comments, along with plans by the central bank to purchase government debt from securities companies and banks, helped the country's benchmark bonds rally. "The RBI governor's comments have bolstered the bond-market sentiment," said P.R.S.R. Raju, a fixed-income trader at Andhra Bank. "Optimism that the central bank's planned open-market bond purchases will support the market, too, is helping. Yields are coming off." Bloomberg (18 Feb.)

Obama changes tune on NAFTA as visit to Canada nears
U.S. President Barack Obama's suggestion during his campaign that the North American Free Trade Agreement might have to be renegotiated has been largely set aside as he prepares for his first foreign trip, to Canada. The administration is emphasizing the benefits of expanding U.S.-Canadian trade. The New York Times (18 Feb.)

Japan expected to continue commercial-paper purchases
The Bank of Japan is expected to hold its interest rate steady and announce that it is extending its program to buy commercial paper beyond March 31. Experts urged the central bank to continue the commercial-paper program because Japanese companies are still trapped in a credit squeeze, with little evidence that short-term debt markets are loosening up. Reuters (18 Feb.)