DJIA chart reading : pullback correction upside biased.
Hang Seng chart reading : downside biased.
Stocks, euro fall on Italy debt contagion concerns
LONDON, July 11 (Reuters) - World stocks hit one-week lows and the euro slid across the board as intensifying concerns that Italy could be the next victim of the euro zone debt crisis prompted an emergency meeting of top European officials.
Italian government bonds tumbled and the yield premium investors demand to hold Italian debt over German bunds widened to a fresh euro-era high as focus shifted to a country which has the euro zone's highest sovereign debt ratio relative to its economy after Greece.
Asian Stocks Drop on European Debt-Contagion Concerns as Financials Fall (Source: Bloomberg)
Asian stocks fell for a second day after U.S. lawmakers failed to agree on cutting the deficit and concern increased that Greece’s debt crisis may spread to bigger European nations, risking earnings at financial companies. Sony Corp. (6758), which sells about 21 percent of its PlayStation game consoles and other products in Europe, retreated 2.7 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, declined 2.2 percent. Commonwealth Bank of Australia, the nation’s largest lender by market value, slid 1.1 percent in Sydney. BHP Billiton Ltd., the world’s biggest mining company and Australia’s No. 1 oil producer, lost 1 percent as oil and metal prices dropped.
Obama Urges ‘Largest Possible Deal’ on Debt (Source: Bloomberg)
President Barack Obama urged Republican leaders to compromise on their opposition to tax increases and achieve “the largest possible deal” to cut the federal budget deficit. Obama said he won’t agree to a short-term extension of the government’s debt limit and plans to continue meeting with members of Congress every day until an agreement is reached. “I will not sign a 30-day or a 60-day or a 90-day extension -- that is not just not an acceptable approach,” Obama told a White House news conference before resuming talks with congressional leaders of both parties toward a compromise on reducing deficits and raising the $14.3 trillion federal debt ceiling before the government exhausts its borrowing authority on Aug. 2.
Treasuries Snap Two-Day Gain as U.S. Prepares to Sell $66 Billion on Debt (Source: Bloomberg)
Treasuries snapped a two-day gain as the U.S. prepared to sell $66 billion of notes and bonds this week, starting with a $32 billion three-year auction today.
Fed Rates on Hold Longest Since 1940s as Treasury Curve Sees Slower Growth (Source: Bloomberg)
The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals. The 3-percentage-point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.
Best Currency Forecasters Say Worst Is Over for Dollar After Index Tumbles (Source: Bloomberg)
The best currency forecasters say the dollar’s 12 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency. Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.
U.S. Stocks Decline on Global Debt Concerns as Financials Fall (Source: Bloomberg)
U.S. stocks slid, giving the Standard & Poor’s 500 Index its biggest two-day drop since March, as concern grew Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) fell more than 3.2 percent, driving financial shares in the S&P 500 down the most since June 1, as Italian and Spanish government bonds sank. Alcoa Inc. (AA) tumbled 2.9 percent before the aluminum producer started the earnings season after the market close. All 10 S&P 500 industries slumped, falling at least 0.7 percent.
US jobs barely rise, dousing hopes of revival
WASHINGTON, July 8 (Reuters) - U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dousing hopes the economy would regain momentum in the second half of the year.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.
China Premier Wen: To Maintain Direction Of Macroeconomic Policy (Source: CME)
China will uphold and maintain the current direction of macroeconomic policy, keeping price stability as the main objective, Chinese Premier Wen Jiabao said in a statement. Wen's comments come as inflation reached a three-year-high in June, rising 6.4% from a year earlier, but also as some voices in China have called for an easing of monetary policy due to a slowdown in growth. Wen, while touring rural areas in remote Shaanxi province, noted that high pork prices, the main driver of rapid inflation in June, are positive for farmers but negative for urban residents. "Stabilizing pork markets is a responsibility that the government must not shirk," Wen said in a statement posted on the central government website. Government officials should immediately take measures to promote pork production, while also studying measures to reduce the cyclical fluctuations in pork prices, Wen said.
China May Expand Least Since 2009 as Wen Faces Limited Scope for Response (Source: Bloomberg)
China’s economy probably grew the least in almost two years last quarter, contributing to a global weakening that Premier Wen Jiabao confronts with more limited scope for policy response than during the 2008 world recession. The government is forecast to report July 13 gross domestic product rose 9.3 percent from a year before, according to the median estimate in a Bloomberg survey, down from 9.7 percent the previous quarter. With data two days ago showing consumer prices climbed the most in three years in June, any easing in the central bank’s monetary stance risks escalating price pressures.
China June inflation at 3-yr high; revives rate debate
BEIJING, July 9 (Reuters) - China's annual inflation accelerated to a three-year high in June, increasing the chances that the central bank will keep raising interest rates to tame price pressures that are spreading beyond food and energy.
Saturday's data, which comes just three days after China raised interest rates for the third time this year, may prove to be the near-term peak for China's inflation as global commodity prices cool, but most economists were still pencilling in one more rate increase this year.
Japanese Stocks Decline for a Second Day on Europe Debt-Contagion Angst (Source: Bloomberg)
Japanese stocks fell for a second day, driving down the Nikkei 225 Stock Average by the most in almost a month, amid mounting concern Europe’s debt crisis may infect the rest of Europe, weakening earnings prospects for exporters to the region.
Strauss-Kahn Saga Exposes Flaws in Europe’s Greek Debt-Crisis Management (Source: Bloomberg)
Greece’s budget was unraveling, Germany and the European Central Bank were at odds over the fix, revelations of secret meetings and cover-ups were sapping confidence in Europe’s crisis management -- and then came the encounter between Dominique Strauss-Kahn and the maid. Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.
EU Revives Buyback Idea as Crisis Hits Italy (Source: Bloomberg)
European finance ministers revived the prospect of bond buybacks to ease Greece’s plight and declined to rule out a temporary default, struggling to contain the debt crisis as investors pounded Italy, the continent’s third-largest economy.
Italy Moves to Curb Short Selling After Contagion Concerns Slam Markets (Source: Bloomberg)
Italy’s market regulator moved to curb short selling after the country’s benchmark stock index fell the most in almost five months and bonds tumbled on investor concern the nation may be the next crisis victim. Consob ordered yesterday that short sellers must reveal their positions when they reach 0.2 percent or more of a company’s capital and then make new filings for each additional 0.1 percent. The measure takes effect today and runs through Sept. 9. The FTSE Italia All-Share Financials Index fell 0.8 percent as of 9:50 a.m. to the lowest in at least two years.
Indonesia May Avoid Rate Increase as Slowing Inflation Gives `Wiggle Room’ (Source: Bloomberg)
Indonesia’s central bank will probably keep interest rates unchanged for a fifth month after inflation eased, delaying an increase as risks emerge of a slowdown in global growth. Bank Indonesia will hold its reference rate at 6.75 percent, according to all 14 economists surveyed by Bloomberg News ahead of a decision due in Jakarta tomorrow. Policy makers last increased borrowing costs in February, the only move this year. The rupiah is the second-biggest gainer in Asia this year, helping cap import costs and restrain inflation. That has allowed central bank Governor Darmin Nasution to extend Indonesia’s pause in monetary tightening as Europe’s debt crisis and slowing U.S. growth threaten Asia’s exports, even as neighbors from Thailand to India and China kept raising rates.
Australia carbon tax hits miners, airlines
SYDNEY, July 11 (Reuters) - Coal miners, steel firms and airlines were sold off on Monday a day after Australia's unpopular government introduced a carbon tax scheme, while power suppliers warned the tax could risk A$4-6 billion in assets if banks tightened financing.
But economists said the tax on the top 500 carbon polluters would have little impact on economic growth, which is riding on the back of China's appetite for its mineral resources.
Rupiah, Won Will Lead Asian Currency Gains This Half, Top Forecaster Says (Source: Bloomberg)
Indonesia’s rupiah and South Korea’s won will lead Asian currency gains for the rest of 2011 as central banks use appreciation to counter inflation, says Credit Suisse Group AG (CSGN), the region’s most-accurate forecaster. The rupiah will climb 4.5 percent and the won 4 percent in the six months through Dec. 31, after the two currencies were also the best performers in the first half, according to Credit Suisse, which Bloomberg data show had the best projections for the six quarters through June 2011. The Thai baht will climb 4 percent following a peaceful election on July 3, the bank predicted. Barclays Plc (BARC), which ranked second, expects the Taiwan dollar to perform best with a 4.7 percent advance.
Australia, N.Z. Dollars Fall to Two-Week Lows Amid Global Recovery Concern (Source: Bloomberg)
The New Zealand and Australian dollars fell to two-week lows against the yen and dollar as concerns that the global economic recovery is weakening sapped demand for stocks and currencies linked to growth.
Euro Weakens to Lowest in Four Months Against Yen, Erasing Earlier Gains (Source: Bloomberg)
The euro fell, erasing earlier gains, and dropping to the lowest in almost four months against the yen. The 17-nation currency declined to as low as 112.32 yen, the weakest level since March 18, before trading at 112.42 as of 9:25 a.m. in Tokyo from 112.61 yen yesterday. The euro fetched $1.4025 from $1.4029 in New York, after reaching $1.4062 earlier today.
FOREX-Euro falls on debt-crisis contagion concerns
LONDON, July 11 (Reuters) - The euro fell on Monday on concerns that the region's debt crisis is spreading, as top EU finance officials gathered for an emergency meeting in Brussels, and the single currency may be set for more losses.
European Council President Herman Van Rompuy will meet European Central Bank President Jean-Claude Trichet and Jean-Claude Juncker, chairman of the Eurogroup, for talks in Brussels around midday (1000 GMT), ahead of a meeting of the 17 euro zone finance ministers later on Monday.
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