Afternoon Fix: Mitch Daniels ducks labor fight

t want a fight with organized labor, Brad Ellsworth doesn't want to run in 2012, Ensign is holding a fundraiser at the NRSC and Wu admits to sending "unprofessional" emails.

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EARLIER ON THE FIX

FIRST ON THE FIX:

Sen. John Ensign (R-Nev.) is holding a fundraiser at the National Republican Senatorial Committee headquarters on Thursday, March 3. Suggested contributions range from $500 to $2,500. Ensign himself used to be chairman of the committee, but national Republicans have done little to help the senator since he admitted to having an affair with a former aide. His fundraising has been anemic and he faces a looming Senate ethics investigation. Committee officials note the building is open to any Republican senator and that the event is not being hosted by the NRSC.

WHAT YOU MIGHT HAVE MISSED

* Rep. David Wu (D-Ore.) admitted , including a photo of himself in a tiger costume. He says he sought professional help and is still fit to serve in Congress. At least six staffers have left Wu's office following a string of bizarre behavior. Wu said he's being treated now with medication and counseling after an "intervention" staged by his staffers.

* Mitch Daniels isto drop a "right to work" bill that has Democratic lawmakers fleeing the state, and he won't send the police after the other party. "For reasons I've explained more than once I thought there was a better time and place to have this very important and legitimate issue raised," he said in a statement. The conciliatory move is not likely to endear him to Republican primary voters.

* Carl Paladino has endorsed Assemblywoman Jane Corwin in the NY-26 race, saying she "will be another member in our movement to take our country back." Corwin also got the backing of two local tea party activists. Some Tea Party activists are opposing Corwin, saying the process by which local GOP chairs picked their candidate was too secretive.

* Eight-term Missouri Rep. Jo Ann Emerson (R)Sen. Claire McCaskill (D) next year, she announced today. "I decided the best possible way to serve Southern Missouri - as well as the entire state - is from my current post," she said in a statement. So far there are two GOP candidates in the race: Former state treasurer Sarah Steelman and former congressional candidate Ed Martin. The party hasn't lined up behind either.

* Senate Majority Leader Harry Reid (D-Nev.) isto ban brothels in the state. "If we want to attract businesses to Nevada that puts people back to work, the time has come for us to outlaw prostitution," Mr. Reid said.

WHAT YOU SHOULDN'T MISS

* Corwin will make a major announcement tomorrow about the NY-26 race. She's expected to officially kick off her candidacy; the various GOP country chairs voted unanimously for her on Monday.

* Former Rep. Brad Ellsworth (D-Ind.)in 2012, he said Monday. Ellsworth, who made an unsuccessful bid for former Democratic Sen. Evan Bayh's seat last year, had been mentioned frequently as a potential gubernatorial candidate.

*Former Senator Rick Santorum (R-Pa.) announced today that Seth Leibsohn will serve as a senior policy adviser for his political action committee, America's Foundation. Leibsohn is is the former producer and co-host of Bill Bennett's Morning in America; he also worked at the think tank Empower America, which merged with Citizens for a Sound Economy to form FreedomWorks.

*Iowa GOP Chairman Matt Strawn will be on MSNBC's Morning Joe Wednesday morning to discuss the 2012 landscape in Iowa, the Iowa GOP straw poll and the 2012 caucuses.

THE FIX MIX

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Oil pulls back on Saudi reassurances, stocks rise

Oil hovered above $112 a barrel on Friday and Asian stocks broke a four-day losing streak as concerns eased that a recent surge in energy prices would hurt demand for riskier assets and threaten broader economic growth.

European stocks were set to open higher, according to financial spreadbetters, while U.S. stock futures rose 0.4 percent, indicating a firmer open on Wall Street later in the day.

Brent oil had vaulted more than 7 percent to almost $120 on Thursday before pulling back on rumors that Libyan leader Muammar Gaddafi had been shot and on Saudi Arabia's reassurances that it could pump more oil to make up for Libyan supply disruptions.

Japan's Nikkei average (.N225) rose 0.7 percent, its first gain in four days, while Hong Kong advanced 1.5 percent, helped by strong earnings from insurer AIA Group (1299.HK) and a rebound in airlines, which are facing sharply higher fuel bills.

The broader Asia-ex Japan stocks (.MIAPJ0000PUS) was trading more than 1 percent higher.

"Foreign investors are buying back after the Nikkei lost some 400 points this week, but it's still early days and we need to wait to see what happens in Libya over the weekend to be able to say if the correction is already over or not," said Toshiyuki Kanayama, a market analyst at Monex Inc.

Still, the broader market was down nearly 3 percent for the week and analysts said a rebound in oil prices may trigger a sell-off in the markets again.

Even if oil markets stabilize, broader sentiment could remain cautious as high fuel prices could still add to inflationary pressures and dampen consumer demand.

Since the Libyan crisis erupted, some of the worst performing markets within Asia are India, Korea and Taiwan due to their higher dependency on oil imports, Brown Brothers Harriman said.

FIRM BIAS

Brent crude oil futures rose $1.50 to $112.86 per barrel, while U.S. crude neared $98.

Although oil prices have come off 2-1/2 year highs, they are still up 12 percent in the past three sessions alone, raising concerns about a wider slowdown in global growth and giving a firm bias to the prices of safe haven assets such as gold, U.S. Treasuries and, of late, the Swiss franc.

The dollar stayed above a record low against the franc on Friday after suffering heavy losses overnight as investors sought safety in other currencies, fearing the unrest in Libya could spread to other oil producers.

It has fallen nearly 4.8 percent against the franc in the last two weeks, its worst showing since June.

Meanwhile, the euro held near three-week highs at around $1.3822, helped by more hawkish comments from European Central Bank officials with ECB policymaker Axel Weber saying the only direction for interest rates to go is up.

Other ECB officials recently talked tough about fighting inflation, reinforcing market view that the ECB will raise interest rates before the U.S. Federal Reserve.

With markets continuing to focus on inflation-adjusted returns, BNP Paribas said, the Fed is seen as least credible central bank, the ECB as the most credible while the Bank of England lying somewhere in between.

In credit markets, the benchmark for non-Japan Asia, the iTraxx investment grade index saw its spreads tighten by two bps to 109.5/111.5 after blowing out to its widest level in nearly a month this week, traders said.

Gold, another haven in times of global turmoil, consolidated around $1,400 an ounce after oil's rally appeared to fizzle.

U.S. Treasuries consolidated overnight gains in Asia, with ten-year yields stabilizing near a three-week low. (Editing by Ramya Venugopal; Additional reporting by Umesh Desai, Antoni Slodkowski in TOKYO and Ian Chua in SYDNEY)

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Volvo to invest $10-11 billion in next 5 years

Volvo Cars said Friday it will invest $10-$11 billion worldwide over the next five years in an ambitious expansion following its acquisition by a Chinese automaker.

CEO Stefan Jacoby's announcement came as Volvo unveiled plans to target fast-growing China for stronger sales. The company said it will open a production base in southwestern China and is looking at a possible second site in the northeast.

"We plan to invest $10-$11 billion over the next five years globally," Jacoby said in an interview. He said that will pay to develop a new vehicle platform and power train and to expand Volvo's presence in China.

Volvo was acquired in August from Ford Motor Co. by Geely Holding Group, one of China's small but ambitious automakers. The $1.5 billion deal — China's biggest foreign auto acquisition — secured Geely a respected global brand but also the challenge of turning around a perennial money-loser in a distant country.

Volvo plans to raise part of the cash for its investment plans in China, drawing on its Geely ties, Jacoby said. He said the Goteborg, Sweden-based company also is raising money from European investment banks and the government of Belgium, where it has a factory.

Jacoby, a German-born former president of Volkswagen Group of America, was appointed to lead management installed by Geely following the acquisition.

Volvo's China plans call for boosting sales to about 200,000 vehicles by 2015, up from 39,000 last year, Jacoby said. Worldwide, Volvo hopes to double sales to 800,000 by 2020.

"China plays a significant role in this growth plan," he said. "We have also significant growth plans in the United States and Europe and in very attractive overseas markets like Australia or Brazil."

China has become the centerpiece of global automakers' plans amid weak growth elsewhere.

It overtook the United States in 2009 as the biggest auto market by number of vehicles sold. And in 2010, total sales grew by an explosive 33 percent over the year before to 13.7 million vehicles, boosted by tax cuts and other incentives launched in response to the global crisis.

General Motors CEO Daniel Akerson this month called China the "crown jewel in the GM universe" and said his company will launch at least 20 new or redesigned cars here in coming years. GM, Toyota and other automakers are creating models to appeal to Chinese tastes.

"If Volvo wants to recover and wants more sales volume, China will definitely be a very important part of that," said Boni Sa, an auto industry analyst for CSM Worldwide.

Volvo has the advantage that Chinese buyers see it as a premium brand on a par with Mercedes Benz or BMW, in contrast to its less luxurious image elsewhere, Sa said. But he said Volvo needs to meet rising Chinese expectations by adding accessories such as leather seats and sophisticated entertainment and air conditioning systems.

"If Volvo can build the right car for Chinese customers, they will see significant growth in China," Sa said. "They need to build more cars that can meet Chinese customers' demands."

Volvo and Geely make an unusual pairing — an established European brand better known for safety than style and a 14-year-old Chinese upstart maker of compact sedans and other low-cost vehicles that is barely known abroad.

Geely's strategy calls for making Volvo a "completely independent automaker" and giving Jacoby's team independence in decision-making, Geely chairman Li Shufu said Friday in an interview.

Li said Geely can help Volvo understand China's booming auto market but will keep the brand separate from its mass-market Geely Auto brand. Geely Auto sold about 495,000 vehicles last year.

"What Geely Holding Group can do is to do its best to help Volvo's development in China," Li said. "Volvo's management decisions will be made completely by its own management team."

Volvo plans to create a production base in Chengdu in Sichuan province in the southwest. It said its China headquarters and design center will be in Shanghai. The company also is looking at a possible production site in Daqing in the northeast.

Jacoby said Volvo picked Chengdu in part because Geely has a factory there. Volvos currently are produced at a Ford joint venture in Chongqing, an hour's drive from Chengdu.

"We are planning to have our plant directly next door to the Geely plant so we can benefit from the infrastructure and shared services," he said. "That allows us to have a setup in a very quick time."

Chinese news reports have suggested Chengdu was picked because the Sichuan government put up some of the money to finance the Volvo acquisition, but Jacoby denied that.

Volvo also wants to appeal to Chinese tastes but has no plans to design a model exclusively for China, Jacoby said. He said the company already has found Chinese buyers want more interior room.

"We are are looking very carefully for specific needs of the Chinese customers," he said. "By manufacturing here we have the opportunity to adapt our cars and tailor-make our cars for the needs of the Chinese customers."

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Volvo Cars:

Geely:

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