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Australia business confidence holds gains, jobs a worry

SYDNEY Feb 12 Australian business confidence improved in January as sales and profitability recovered from low levels, although firms also reported weakness in hiring that might bode ill for unemployment, a survey reported on Tuesday. The monthly survey of more than 400 firms by National Australia Bank found confidence rebounded in the mining industry in January, perhaps thanks to rising prices for some key commodities, notably iron ore. The survey's main measure of business confidence edged up a point to 3, adding to December's jump. The index of business conditions improved to -2 in January, from -5 the previous month, but remained below its long-run average of 5."While profitability and trading conditions posted solid gains in the month, employment conditions weakened considerably," noted NAB's chief economist, Alan Oster.

"Forward orders were little changed at poor levels, suggesting little upward momentum."The survey's measure of business sales rose 6 points to stand at a net balance of 1 in January, while the index of profitability climbed 7 points to -1.

However, the measure of employment fell back 4 points to -7, with construction again the weakest sector. Measures of labour costs also softened markedly, suggesting wage pressures were abating. There was scant sign of inflation anywhere in the survey, with retail prices falling amid widespread discounting.

"Overall, the survey implies underlying demand growth in the March quarter of around 2.75 percent -- a slight improvement on expectations for the December quarter but still below trend," said Oster. Oster said he still expected the Reserve Bank of Australia (RBA) would have to cut interest rates further, although the next move might not come until May. The central bank cut rates in both October and December, taking them to a record-matching low of 3 percent. It skipped a chance to ease further at its February policy meeting but said it stood ready to cut further if the economy disappointed.

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Brazil banks eye latin america for more bond deals

* Itau, Pactual win bond mandates outside Brazil* Strategy seen paying off as expansion gains steam* Underscores strength of local shops regionallyBy Guillermo Parra-Bernal and Aluisio AlvesSAO PAULO, Feb 15 Brazilian investment banks, which in recent years gained muscle by snatching away lucrative deals from their foreign rivals, are now showing their might by clinching more mandates to handle corporate bond sales across Latin America. Itaú BBA, BTG Pactual and Bradesco BBI, all based in São Paulo, are taking advantage of the busiest start of the year for corporate bond offerings since 2007 to manage deals for Argentine and Chilean issuers. As activity picks up, they expect to land more mandates from Colombia and Peru. Private and publicly controlled companies in Latin America sold $24.2 billion in foreign currency-denominated bonds in the year through Feb. 10, up from $14.28 billion in the same period a year earlier, according to Thomson Reuters data. More deals await Brazilian shops, which are besting their foreign competitors in forging strong ties with customers, funding deals and setting distribution networks rivaled only by global banks. The retreat of traditional lenders in the United States and Europe in the aftermath of the financial crisis of 2008 is also helping."Brazilian banks are now being taken much more seriously by rivals," said Renato Ejnisman, head of debt capital markets for Bradesco BBI, the securities unit of Banco Bradesco, Brazil's second-biggest private sector lender.

Currently, Itaú BBA, the investment banking unit of Itaú Unibanco Holding, is a joint bookrunner in a sale of six-year debt for Argentina's Empresa Distribuidora de Electricidad de Salta. Pricing for the deal is expected as early as this week."We have two mandates for Chile," Nadine Cavosoglu, a senior debt capital markets banker for Itaú BBA, said in a phone interview from New York. "We will see more activity from March on, once markets digest the recent supply."Cavosoglu, a former UBS AG banker who joined the Brazilian bank's New York desk in 2009, declined to elaborate on the upcoming mandates. BTG Pactual, the three-year-old banking powerhouse created by banking wunderkind André Esteves, is helping the City of Buenos Aires sell debt in its return to bond markets after a two-year hiatus. Citigroup and Barclays Capital are also involved in the transaction.

"Our strategy is to keep attracting business from companies outside Brazil," said Alexander "Sandy" Severino, a veteran banker who is responsible for foreign bond sales advisory at BTG Pactual in New York. Bradesco BBI last month was named a co-manager for a sale of five-year bonds by the financing arm of Ford Motor Co -- a move probably aimed at luring Latin American investors to the securities. COLOMBIA, CHILE

The increase in advisory roles outside Brazil coincides with efforts by Brazilian banks to set up units in other Latin American countries. Last week, BTG Pactual agreed to buy Chilean rival Celfin Capital for about $600 million, a step in its plans to win more capital market advisory business in Chile, Colombia and Peru. BTG Pactual and Esteves himself have become a symbol of Brazil's growing economic might, competing neck-and-neck with big global investment banks in a region with bustling capital markets and booming demand for wealth management services. Itaú BBA is scheduled to start investment-banking operations in Colombia by mid-year as Brazil's most profitable bank taps a growing market for deal advisory in Latin America's third-largest economy. Itaú BBA already has offices in Argentina, Peru and Chile. Rivals such as state-controlled Banco do Brasil are also on the lookout for banking assets in Colombia. Bradesco BBI plans to open a unit in the once violence-torn Andean nation, Sergio Clemente, senior vice president in charge of investment banking and wholesale banking, told Reuters in December. Colombia is South America's second-most populous nation and, like Brazil, has a diversified economy dependent on oil, coal, agriculture and manufacturing.