DJIA chart reading : downside biased with possible pullback correction.
Hang Seng chart reading : downside biased.
Asian Stocks Drop on Global Recovery Concerns; Toyota, Canon, BHP Decline (Source: Bloomberg)
Asian stocks dropped for a fourth straight day after reports signaled economic growth is slowing in the U.S. and Europe and as commodity prices declined.
Fed Focusing Increasingly on Inflation Expectations With Policy Unchanged (Source: Bloomberg)
The cue for the Federal Reserve to start withdrawing its record monetary stimulus may be a measure of its own credibility: inflation expectations. Expectations for annual consumer-price gains have jumped by 43 percent to 2.10 percentage points since the central bank began its second round of asset purchases in November, as measured by the breakeven rate for five-year Treasury Inflation Protected Securities. The measure is close to levels before the recession -- when the central bank’s benchmark interest rate was 5.25 percent, compared with about zero today.
Risk Rally Ending for Currencies Turns Focus to New Least-Ugly Alternative (Source: Bloomberg)
The best-performing currencies of 2011 are falling out of favor as the Federal Reserve plans its exit from record monetary stimulus just as the global economy shows signs of slowing, buffeting commodities and stocks. A basket of nine currencies including Australia’s dollar and the Norwegian krone has dropped 4.2 percent in May against the U.S. dollar, after rising 7.3 percent in the first four months of 2011, according to data compiled by Bloomberg. Demand for contracts insuring against a drop in the euro versus the greenback are trading at about the highest levels of 2011.
China May factory growth hits 10-mth low -HSBC flash PMI
BEIJING, May 23 (Reuters) - China factories expanded in May at their slowest pace in 10 months while price pressures eased, a purchasing managers' index showed on Monday, adding to evidence that the economy is moderating as a tighter policy starts to bite.
Still, results to the HSBC flash manufacturing purchasing managers' index (PMI) showed that China's vast manufacturing sector is gently easing rather than heading for a deep downturn as demand at home and abroad remained firm.
Chinese Stocks Not at Bottom: ICBC Credit Suisse (Source: Bloomberg)
China’s benchmark stock index may extend declines after erasing all of its gains for 2011 yesterday as higher interest rates slow economic growth without cooling inflation, ICBC Credit Suisse Asset Management Co. said. The Shanghai Composite Index slumped 2.9 percent yesterday, the most since Jan. 17, after a preliminary reading of a purchasing managers’ index showed China’s manufacturing may expand at a slower pace this month. The guage has tumbled 9.3 percent from a five-month high on April 18 amid concern government tightening measures will slow earnings growth.
Japan Stocks Fall for Fourth Day on Global Recovery Concern, Commodities (Source: Bloomberg)
Japanese stocks fell for a fourth day as commodity prices declined and after reports signaled economic growth is slowing in the U.S. and Europe.
Singapore Inflation Rate Slows to Less Than 5% for the First Time in 2011 (Source: Bloomberg)
Singapore’s inflation slowed to less than 5 percent for the first time this year in April as a strengthening currency reduced the cost of imported goods. Consumer prices rose 4.5 percent last month from a year earlier, the Department of Statistics said in a statement today. That was the slowest pace in five months, according to data compiled by Bloomberg based on previously released information, and compares with the 4.4 percent median estimate of 11 economists surveyed by Bloomberg News.
Thailand Economic Growth Accelerates, Maintaining Pressure for Rate Rises (Source: Bloomberg)
Thai economic growth accelerated in the first quarter to the fastest pace in a year, adding pressure for higher borrowing costs to contain inflation as the government prepares for a July 3 election. Gross domestic product rose 2 percent in the three months to March 31 from the previous quarter, when it climbed a revised 1.3 percent, the National Economic and Social Development Board said in Bangkok today. The median of 11 estimates in a Bloomberg News survey was for a 2.2 percent jump.
German Business Confidence Probably Dropped for Third Month on Debt Crisis (Source: Bloomberg)
German business confidence probably fell for a third month in May after a worsening debt crisis clouded the euro region’s growth outlook and rising energy costs threatened to sap earnings. The Ifo institute’s business climate index, based on a survey of 7,000 executives, dropped to 113.7 from 114.2 in April, the median forecast of 24 economists in a Bloomberg News survey shows. Ifo releases today’s report at 10 a.m. in Munich.
Greece to Accelerate Asset Sales as Bonds Drop (Source: Bloomberg)
The Greek government endorsed an accelerated asset-sale plan and 6 billion euros ($8.4 billion) of budget cuts to win extra aid and stem a market slide that threatens to swamp the most debt-laden euro-area nations.
Euro Falls for Third Day on Sovereign Debt Concern, Slowing Growth Outlook (Source: Bloomberg)
The euro weakened for a third day against the yen on speculation Europe’s sovereign-debt crisis is worsening as the region’s industrial expansion slows. Europe’s common currency was 0.6 percent from its lowest in two months against the dollar before a report that economists said will show the region’s industrial orders fell for the first time in six months in March. The pound weakened against 15 of its 16 most-traded counterparts after Sky News reported that Moody’s Investors Service will place 14 of the 18 British banks and building societies it covers on review for downgrades, citing people familiar with the matter.
BOE’s Dale Says Uncertain Recovery Shouldn’t Stop Rising Interest Rates (Source: Bloomberg)
Bank of England Chief Economist Spencer Dale said that monetary policy makers should boost interest rates to control inflation, even if Britain’s economic recovery isn’t yet guaranteed.
Australian Dollar Trades Near Five-Week Low as Stocks, Commodities Tumble (Source: Bloomberg)
The Australian dollar was 0.3 percent from a five-week low on speculation mounting concern that Europe’s debt crisis will deepen will extend a slump in stocks, sapping demand for higher-yielding assets. The so-called Aussie traded near the weakest level in a week versus the yen as tumbling prices for commodities, which account for a majority of exports, damped demand for the nation’s assets. New Zealand’s dollar held onto yesterday’s decline before reports today forecast to show European industrial orders fell for the first time in six months and U.S. new home sales stalled, stoking concern that the economic recovery is losing steam.
FOREX-Euro hurt by debt woes, could see more losses
LONDON, May 23 (Reuters) - The euro fell to a two-month low versus the dollar and a record trough against the Swiss franc on Monday, as investors unwound bullish bets on mounting worries about the region's debt with many expecting more losses.
The euro fell to as low $1.3968 on trading platform EBS, its weakest since mid-March, on doubts about Spanish austerity measures after Madrid's ruling Socialist party was defeated in regional elections, while Italy suffered a credit outlook downgrade and speculation mounted over some sort of Greek debt restructuring.
Debt worries hit euro, stocks; govt debt, gold up
HONG KONG, May 23 (Reuters) - The euro fell to a record low against the Swiss franc as worries about euro-zone debt sapped demand for riskier assets such as Asian stocks and prompted investors to shift funds into U.S. government debt, gold and the dollar. European shares are set to take their cue from Asia, with financial spread betters calling major indexes to open between 0.8 percent and 1.2 percent lower.
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