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Despite a drop in demand, gas prices continued to move higher last week, with the national average hitting $2.82, up from $2.79 a gallon the previous week.

However, the fundamentals don’t support higher prices and we can expect to see prices fall a few cents this week, said Jessica Brady, manager of AAA public and government relations.

“We may see retail gas prices decline a few cents this week in response to the lower crude price, and this should help postpone $3 gasoline from becoming a common sight in the Southeast,” she said in a news release payday loans.

Statewide, the price of a gallon of regular gasoline hit $2.85 last week, up from $2.84 a week earlier.

Prices held steady week over week in two of the three South Florida counties, with the average price of a gallon of regular unleaded selling at $2.90 in Miami and $2.87 in Fort Lauderdale. The average price rose by a penny in West Palm Beach, to $2.92.

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New Zealand manufacturing sales increased the most since 2002 in the fourth quarter and home building surged, adding to signs economic growth accelerated in the final months of last year.

Sales volumes adjusted to remove inflation rose 3.1 percent from the previous three months, Statistics New Zealand said in a statement in Wellington today. Residential construction increased 7.4 percent in the same period, the statistics agency said in a separate report.

Stronger construction, manufacturing and retail sales suggest economic growth accelerated in the fourth quarter, buoyed by record-low interest rates and an expansion in Australia, which is the biggest market for New Zealand’s exports. The Treasury Department last week said the currency’s 3.7 percent decline against the U.S. dollar so far this year is providing more confidence for exporters.

“Construction and manufacturing look set to provide a positive contribution to gross domestic product in the quarter,” said Philip Borkin, an economist at Goldman Sachs JBWere Ltd. in Auckland. He estimates the economy grew 1 percent in the three months ended Dec. 31.

New Zealand’s dollar bought 70.01 U.S. cents at 11:55 a.m. in Wellington trading from 69.54 cents immediately before the reports were published.

Economic growth is accelerating after GDP increased 0.2 percent in both the second and third quarters of 2009, ending the nation’s worst recession in three decades. Fourth-quarter GDP figures are published on March 25.

Export Volumes

Economists will complete their GDP forecasts after a report on export and import volumes on March 10 and data on electricity generation due a week later. Retail sales rose 1 percent in the fourth quarter, according to a report on Feb. 12.

Reserve Bank Governor Alan Bollard has kept the official cash rate at 2.5 percent since April last year. He will leave the rate unchanged at his next review on March 11, according to all 13 economists surveyed by Bloomberg News.

Manufacturing sales rose in the three months through December by the most since the third quarter of 2002, when volumes jumped 4.1 percent. Eleven of 15 industries recorded gains, the statistics agency said.

Meat and dairy sales advanced 4.6 percent, led by meat. That offset a fall in milk powder, butter and cheese volumes. More than half the meat and dairy production is exported, the statistics agency said.

Excluding those categories, manufacturing climbed 3.6 percent, the agency said. Analysts use the figure excluding meat and dairy as a guide for the contribution of manufacturing to New Zealand’s GDP.

GDP Contribution

“Adjusting for changes in inventory levels, we estimate that manufacturing production rose around 4 percent” in the quarter, said Borkin. “This emphasizes a turn in performance after a period of significant weakness.”

Before the latest period, manufacturing had declined for five of seven quarters.

Demand for exports is being buoyed by global growth, led by China and other Asian economies. In Australia, which buys 23 percent of New Zealand exports, growth was 0.9 percent in the fourth quarter.

The increase in home construction followed two quarters of declines, while non-residential construction fell 6.1 percent, the statistics agency said in a second report.

“We expect residential construction activity will continue to recover over the coming quarters,” said Jane Turner, an economist at ASB Bank Ltd. in Auckland. “Non residential was significantly weaker than our expectation.”

Construction lags behind home-building approvals, which surged 21 percent in the fourth quarter from the three months through September, according to a report on Jan. 29.

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Problems with Toyota cars are cropping up faster than the automaker can deal with them. Following two different recalls for problems involving accelerator pedals on various models comes the revelation of braking problems in the iconic Prius.

Here’s a rundown of the problems, the cars involved and what to do if your car’s caught up in any of this.

Prius brakes

What’s the problem? Under certain conditions, particularly at relatively low speeds when traveling over rough or potholed roads, drivers have complained of a brief, but significant, delay in brake performance.

Is it being blamed for crashes? Yes, at least four crashes in the U.S. have been reported, allegedly as a result of this problem.

What cars are involved? 2010 model year Toyota Priuses made before January, 2010. Toyota is also investigating whether the Lexus HS250h hybrid, which shares its mechanical parts with the Toyota Prius, might have a similar problem.

Is there a recall? No, at least not yet.

Is there a fix for it? None has been announced yet, but Toyota has fixed the problem on cars coming off the assembly, so there does seem to be some sort of solution. Now Toyota has to figure out how to get that change made to cars already on the road.

What should I do? The safest thing to do, of course, would be not to drive the car until the problem has been fixed. If you do drive, be aware of the problem and allow extra following distance and be begin to stop a little sooner for red lights and stop signs, especially if the road is choppy.

David Champion, Consumer Reports’ head of auto testing, also reminds drivers not to lift off the brake pedal if they feel a loss of power. Instead, keep your foot pressed down hard on the brake pedal and don’t pump the brakes.

Sticky gas pedals

What’s the problem? Over time, gas pedals in some cars become sticky. At first, they just become a little harder to push down and when you lift your foot off the gas, they’re slower to come back up. In the worst case, the pedal on these cars can become stuck part way down.

Is it being blamed for crashes? There have been no crashes or injuries reported as a result of this problem.

What cars are involved? Toyota’s 2009-2010 RAV4, Corolla and Matrix models; the 2005-2010 Avalon; 2010 Highlander; 2007-2010 Tundra and the 2008-2010 Sequoia; and some 2007-2010 Camrys (only those with gas pedal assemblies made by a specific Toyota supplier; your dealer can check). No Lexus or Scion models are involved.

Is there a recall? Yes , 2.3 million vehicles.

Is there a fix for it? Yes. Toyota dealers can install a small metal plate that reduces wear on the plastic parts involved.

What should I do? Get your car fixed as soon as you can. If your gas pedal starts to feel sticky, stop driving immediately, Toyota says. Pull over in a safe place, then call a dealer.

If the pedal becomes stuck part way down, applying the brakes should be enough to slow the car and bring it under control. Don’t pump the brakes, though. That will just weaken your power brakes. Instead, press and hold the brakes. Also, at the same time, you can shift the transmission into neutral, which will stop the engine from driving the wheels.

Keep in mind that these situations are rare occurrences.

Floor mat pedal entrapment

What’s the problem? In some cars, gas pedals can become stuck on the edge of afloor mat, particularly when thick all-weather floor mats are used or when floor mats are stacked on top of one another. In this case, the pedal can be stuck almost all the way to the floor, creating a particularly dangerous situation.

Is it being blamed for crashes? Yes, there have been crashes and some deaths on account of this problem.

What cars are involved? 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, 2009-2010 Pontiac Vibe (a version of the Matrix), 2007-2010 Toyota Camry, 2005-2010 Avalon, 2004-2009 Prius, 2005-2010 Tacoma, 2007-2010 Tundra and the 2007-2010 Lexus ES350, 2006-2010 IS250 and the 2006-2010 IS350.

Is there a recall? Yes 5.3 million vehicles have been recalled for floor mats.

Is there a fix for it? Yes. Dealers will alter the shape of the gas pedal to prevent it becoming stuck on the floor mat even when thick or stacked floor mats are used. In some cars, the floor area under the gas pedal may also be reshaped slightly to make more room.

What should I do? Get your car fixed as soon as possible. If your car hasn’t been fixed yet remove your floor mats.

If your gas pedal becomes stuck in the "floored" position, immediately shift the transmission to "Neutral" and press hard on the brake pedal. Don’t pump the brakes but apply even, firm pressure. 

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About 900 General Motors and Chrysler dealerships that got the ax as the Detroit giants went through bankruptcy have filed notice that they will appeal their shutdown, according to the American Arbitration Association.

The nearly 3,000 dealerships the auto manufacturers scrapped have until Monday to file with the AAA for an independent arbitration of their case. But applications from dealers are still rolling in, so it’s hard to tell what the final count will be, said India Johnson, senior vice president of AAA.

"We are still putting cases in every day. They come in the mail, they come by e-mail, they come by fax," Johnson said. "I think that some may be filing because they want to preserve their right to file, and then next week or the week after that they may not go forward."

Electing arbitration costs dealers and manufactuers each a $1,625 filing fee. But that is just the start: If the arbitration proceeds to a hearing, the costs mount. Dealer and manufactuers are required to split common fees, such as the filing fee, and pay their own attorney expenses.

An estimated 2,000 dealers from General Motors and 789 from Chrysler are eligible to appeal. The General Motors count includes 1,300 dealerships that were put on notice in May for closure as of October 2010. Another 700 dealers were slated for "partial wind-down," meaning that one of a dealer’s multiple franchises is scheduled to be shuttered guaranteed payday loans.

The dealers Chrysler targeted in May have already stopped operating as Chrysler franchises. The company gave them less than 30 days to close.

Dealerships that have already closed or will close due to the death of GM’s Saturn and Pontiac brands are being handled separately. The fate of Hummer franchises will remain in limbo until the brand’s sale to a Chinese company is complete. Saab dealers are also hanging by a thread.

Arbitrators have a list of seven factors to consider in evaluating dealers’ appeals. They will assess the dealer’s profitability over the past four years, the dealership’s current economic viability, the geographic and demographic characteristics of the dealership’s territory, and the length of time the dealership has been in business, among other factors.

The arbitrator must also consider each manufacturer’s overall business plan, and how well the contested dealership fits into it.

The proceedings will be held in the state where the dealership is located and must, by law, be completed by June 14. However, arbitrators will have the option of extending that deadline if they can show cause for the extension. 

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Weak demand for office space and an influx of new buildings has caused landlords to drop rents for commercial buildings in the GTA.

Average asking rents fell 9 per cent or from $17.83 in 2008 to $16.20 per square foot by the end of last year, according to a report by Colliers International Monday.

"The impact of the recession still lingers on Toronto’s office market," said the real estate services firm.

Office vacancies continued on an upward trend, hitting 6.1 per cent equal to 11.3 million square feet at the end of 2009 – a 20 per cent increase. Colliers says things will get worse before they get better, with vacancies hitting 6.9 per cent before the trend is reversed.

"Historically, there has been a lag between economic recovery and its impact on the GTA office market," said John Arnoldi, managing director with Colliers.

Another problem has been with sub-leases, where troubled companies looking to reduce overhead dump part of their office space back onto the market.

The sub-lease market is up 48 per cent from a year earlier, and is now above one million square feet.

That space now competes with existing vacancies and accounts for about 10 per cent of total vacancies.

Meanwhile, commercial landlords say their biggest concern during the recession is the financial stability of tenants as tough economic times are resulting in higher rent defaults.

In a survey of Canadian commercial investors by Colliers, 92 per cent of respondents said "tenant financial credit rating" was at the top of their list when it came to making a leasing decision. This compares to 33 per cent when the survey was last taken in 2007

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BNP Paribas SA, the most accurate forecaster of the real’s world-beating rally last year, now says avoid Brazil’s currency in favor of the won and rupee as Asia’s central bankers prepare to raise interest rates.

South Korea and India’s currencies will climb 11 percent this year as Brazil’s rally ends, according to Sebastien Galy, the senior foreign-exchange strategist at France’s largest bank in New York. The real, Australia’s dollar and the South African rand were the best-performing of 16 major currencies in 2009, gaining more than 25 percent, on demand for their iron ore, coal and gold. The won rose 8.2 percent and the rupee 4.9 percent.

Bank Julius Baer & Co., Franklin Templeton and Investec Asset Management, which together manage $736 billion, say Asian policy makers will let their currencies strengthen as demand for exports recovers and the cost of imported food and fuel rises. The real weakened 0.1 percent since October 19, when Brazil began taxing foreign purchases of stocks and bonds to curb speculation. South African unions are pressing the government to weaken its currency.

“Much of the gains in commodity currencies already happened in 2009,” said Galy, 35, a former analyst for the International Monetary Fund. “As Asia tightens policy and finally lets its currencies appreciate, flows of capital should shift away from commodity currencies into Asia.”

Real Retreat

Even BNP’s forecast for the real to strengthen 16 percent to 2 per dollar, the most bullish among projections in a Bloomberg survey at the end of 2008, underestimated its rally. The currency closed 2009 at 1.7445, up 33 percent. BNP sees Brazil finishing this year at 1.75 to the dollar, in line with the median estimate in a Bloomberg survey of 17 analysts, as the exchange rate erodes the competitiveness of manufacturers.

The real gained 0.1 percent to 1.7178 per dollar at 8:19 a.m. in New York, from 1.7200 yesterday.

The won will be the 2010 winner, appreciating 7.8 percent to 1,080 and the rupee will climb 5.7 percent to 44, while the rand drops 6.4 percent to 7.90, separate surveys showed. BNP forecasts the won will rise to 1,050 and the rupee to 42. The Korean currency today gained 1.2 percent to 1,140.5, the biggest increase since July 14, and India’s touched a one-month high of 46.09.

Asian central banks “will be leaders in the hiking cycle,” said Werner Gey van Pittius, a London-based money manager who helps oversee about $60 billion in assets at Investec, which is speculating the real will decline. Its emerging-market bond fund returned 28 percent in 2009, beating the 22 percent gain in the JPMorgan Chase & Co. GBI-EM Global Diversified Unhedged index.

China Stimulus

Currencies of commodity producers rallied in 2009 as China led the global economic recovery by focusing its $586 billion two-year stimulus package on building roads and power plants.

Near-zero interest rates in the U.S. encouraged investors to borrow dollars and invest the money in markets with higher returns through so-called carry trades. Benchmark interest rates are 8.75 percent in Brazil and 7 percent in South Africa.

Swap contracts to exchange fixed-interest payments for floating rates indicate the market anticipates faster increases in Asian borrowing costs. A one-year agreement in India has risen to 1.76 percentage points more than the central bank’s benchmark, up from 0.95 point on June 30. The spread in Korea is 1 free business cards.65 percentage points, compared with 1.69 points in Brazil and 0.13 point in South Africa.

Rate Increases

The Bank of Korea will raise its benchmark rate one percentage point to 3 percent by end-2010, according to a Bloomberg survey of economists. India’s central bank will increase its reverse repurchase rate to 4 percent from 3.25 percent, a separate poll showed.

Korean companies boosted capital spending 10 percent in the third quarter, helping win business as demand strengthened in China, just as the financial crisis forced Japanese factories to pare investment. The world’s most-populous nation is the biggest buyer of Korea’s exports, accounting for 18 percent of shipments last month.

Royal Bank of Scotland Group Plc has the most bearish 2009 forecast for the won, predicting a retreat to 1,300, and sees the rupee little changed at 46 as the dollar rallies and developed nations raise rates. New York University Professor Nouriel Roubini said in October that a rebound in the dollar may force carry-trade investors to “rush to the exit.”

“As the U.S. economy recovers, rates there will rise and this will reduce the portfolio inflows into India,” said Sanjay Mathur, a Singapore-based economist at RBS, which is controlled by the U.K. government. “As India’s economy rebounds, imports will rise, softening the external position.”

Rand Overvalued

The rand is overvalued by 8 percent to 9 percent, which will “penalize the economy” in 2010, said Murat Toprak, a strategist in London at Societe Generale SA, France’s second- largest bank. South Africa’s central bank will cut its benchmark rate by half a percentage point to 6.5 percent in the first quarter, he said.

SocGen’s 2009 forecast for the rand to gain 12 percent was the most accurate after Standard Bank Group Plc, Africa’s largest lender, in a Bloomberg survey of 22 analysts.

Investors will buy currencies “where they think rates will go up,” said Toprak. SocGen predicts the won will rise 11 percent in 2010 and the rupee 5.7 percent.

Asian nations will allow currency appreciation to reduce import costs and curb inflation, said Michael Hasenstab, who oversees the $2 billion Templeton Emerging Markets Bond Fund.

India’s wholesale food prices surged 20 percent in the week ended Dec. 19 from a year earlier, almost an 11-year high. Global costs jumped 7 percent in November from October, the most in about two years, according to the United Nations Food and Agriculture Organization.

Food Costs

“Emerging markets will be among the first to face inflation due to rising commodities prices,” Hasenstab said. His fund returned 49 percent last year, beating the 28 percent advance in the benchmark JPMorgan EMBI Global Index.

Standard Chartered Plc, whose 2009 won forecast was the most accurate, predicts gains of 11 percent for both the Korean and Indian currencies this year.

“You’re going to see Asian governments probably tolerating some currency appreciation to prevent inflation from becoming a bigger problem,” said Neo Teng Hwee, head of portfolio management for Asia at Bank Julius Baer, which oversaw assets equivalent to about $140 billion at the end of June. His preferred picks include the rupee and China’s yuan.

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The Federal Reserve on Monday proposed allowing banks to set up the equivalent of certificates of deposit at the central bank, a move that would help the Fed mop up money pumped into the economy and prevent inflation from taking off later.

Under the proposal, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.

The proposal comes as no surprise. Federal Reserve Chairman Ben Bernanke and other Fed officials have repeatedly said the creation of so-called "term deposits" — essentially the equivalent of CDs for banks — would be one of several tools the Fed could use to drain money from the economy when the time is right.

Against that backdrop, the Fed said the proposal "has no implications for monetary policy decisions in the near term."

With both the economy and the financial system on the mend, the Fed this year started to wind down and scale back some emergency lending programs. Many of those programs were set up at the height of the financial crisis in the fall of 2008 when some credit markets virtually shut down.

Lending conditions have improved but still aren’t back to normal. They continue to restrain the recovery.

The Fed’s balance sheet has ballooned to $2.2 trillion, reflecting the creation of lending programs intended to ease the financial crisis. That’s more than double the pre-crisis level. The Fed will need to mop up that money or it could trigger inflation down the road.

The Fed proposed that the interest rate paid on the term deposit be set through an auction mechanism.

Banks wanting to hold a term deposit would bid in regularly scheduled competitive auctions. The banks would indicate both the interest rate at which they are willing to be paid and the amount of money they want to deposit into the account at that interest rate.

Given that process, it’s unclear now what the rates on the accounts would be.

The Fed said it anticipated term deposits with "relatively short maturities" likely ranging between one and six months. It said deposit maturities wouldn’t exceed one year, and no early withdrawals of money in the accounts would be allowed.

Most economists don’t believe the Fed will start raising its key bank lending rate, which influences a range of consumer lending rates, until the middle of next year.

Separately, in a weekly report issued Monday, the Fed said banks cut back on emergency loans from the central bank, a fresh sign credit problems have eased.

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The European Central Bank will lend banks more money than economists forecast in its final tender of 12-month funds as some financial institutions try to lock in cash at a record low interest rate.

Banks bid for 96.9 billion euros ($141 billion), the Frankfurt-based ECB said today. Economists forecast that it would lend 75 billion euros, the median of 23 estimates in a Bloomberg News survey showed. The cost of borrowing is indexed to the average of the ECB’s benchmark rate rather than fixed at 1 percent, as it was in the previous two tenders.

President Jean-Claude Trichet said on Dec. 10 that market conditions are “stable enough” to allow the ECB to withdraw some of the emergency measures introduced to fight the financial crisis. While the decision to index the rate on the tender will increase banks’ funding costs should policymakers raise the benchmark rate from 1 percent next year, the demand suggests the majority don’t expect an increase next year.

“Banks’ bidding behavior suggests the majority of them don’t expect a change in the policy rate during the duration of the tender,” said Klaus Baader, co-chief European economist at Societe Generale in London. The size of demand “will cause the liquidity situation in money markets to stay relaxed. Overnight and short-term money-market rates will remain very, very low.”

The Eonia overnight rate, the rate European banks charge each other for overnight loans, has declined to about 0.35 percent from 2.2 percent at the start of the year.

The euro was little changed after the announcement, trading at $1.4558 at 12:11 p.m. in Frankfurt, from $1.4538 yesterday.

Flagship Policy

The ECB has flooded markets with cash to fight Europe’s worst recession since World War II and revive lending. It lent 75.2 billion euros at its last 12-month tender in September and a record 442 billion euros in June cash till payday.

The ECB said that 224 banks bid in the latest tender, compared with 589 in September and 1,121 in June.

The 12-month loans formed one of the ECB’s flagship policies this year. The bank will also discontinue its six-month loans after March and only guarantee unlimited funding in its other refinancing operations until April 13.

‘Orderly Unwinding’

The euro-region economy’s emergence from the recession in the third quarter is helping the ECB deploy exit strategies. The central bank earlier this month forecast the economy to expand around 0.8 percent next year and 1.2 percent in 2011 after contracting around 4 percent in 2009.

Still, council members have signaled that they’re in no rush to step up efforts on withdrawing stimulus. Austria’s Ewald Nowotny said in an interview on Dec. 14 that tenders “that we didn’t mention will go on for the time being.” Germany’s Axel Weber said on Dec. 9 that the ECB will have a “process of orderly unwinding” and that the bank will reduce liquidity “slowly and step-by-step.”

The ECB began lending banks as much money as they wanted in the aftermath of Lehman Brothers Holdings Inc.’s collapse last year, effectively assuming the role of the money market. In May this year, it announced it would extend the maximum maturity on its loans to 12 months.

“The ECB was more or less successful with its measures to avoid too strong a use of the 12-month tender,” said Juergen Michels, chief euro-region economist at Citigroup in London. “That will make the liquidity drain easier in 2010.”

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General Electric Co and Vivendi SA have agreed in principle to value the French company’s 20 percent stake in NBC Universal at $5.8 billion, a source familiar with the matter said on Monday, paving the way for Comcast’s proposed deal with GE.

GE and Vivendi have spent weeks negotiating over the value of Vivendi’s stake in NBC Universal, holding up Comcast’s plan to buy a controlling stake in NBC Universal. Vivendi has to agree to sell its stake to GE to make the Comcast deal possible.

With the two sides reaching an agreement on valuation, an announcement on the Comcast-GE deal could come as early as the end of this week, a second source said.

(Reporting by Jui Chakravorty and Anupreeta Das; Editing by Richard Chang)

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Europe’s biggest bank HSBC Holdings said its underlying third quarter profits were “significantly ahead” of a year ago and said losses on U.S. consumer loans had shown their first fall in three years.

HSBC said loan impairment allowances for its U.S. consumer finance business declined in the third quarter, representing the first quarterly fall since the start of 2006 and their lowest level for over a year.

HSBC said its investment bank arm had maintained its record performance so far this year.

HSBC shares were up 1.8 percent at 704.9 pence at 0830 GMT (3:30 a bad credit payday advance.m. EST).

“I believe the biggest jolt has now passed through the global economy,” said HSBC Chief Executive Michael Geoghegan. “The world will likely see a two-speed recovery,” he said, adding that emerging markets are likely to drive the recovery.

The bank said on a reported basis, including losses on the fair value of its own debt, Q3 profits were lower than a year ago.

(Reporting by Steve Slater and Clara Ferreira-Marques)

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