Malaysia: Industrial production index down 5.1% in May
The Industrial Production Index (IPI) in May 2011 decreased 5.1% compared to May 2010. M-o-m, May 2011 IPI decreased 1.3%, the Department of Statistics Malaysia said in its IPI report for the month. The decline in May 2011 was due to decreases in the mining index (20.1%) and electricity index (1.6%). The manufacturing index posted an increase of 0.6%. The IPI from January – May 2011 recorded a positive growth of 0.2% compared to the same period of 2010. Manufacturing output in May 2011 grew 0.6% against May 2010. The growth for the first 5 months of 2011 increased by 3.7% compared to the same period last year. (Bernama)
EU: EU revives buybacks for Greek solution as crisis swamps Italy
European finance ministers weighed using bond buybacks to ease Greece’s plight, reviving previously discarded ideas as the debt crisis leapt to Italy, the continent’s third-largest economy. Prodded by investors and the European Central Bank, the euro’s guardians said a bailout fund set up last year may be used to buy bonds in the secondary market or enable Greece to retire its debt at a discount. They offered another cut in Greece’s interest rates. As exploding bond yields in Italy and Spain brought the crisis closer to the heart of the euro area, Europe’s search for answers took it back to proposals that were scuttled by Germany earlier this year. (Bloomberg)
EU: Italy, Spain trade like junk as contagion spreads: Euro Credit
Italian and Spanish sovereign bonds are trading like junk-rated debt amid faltering efforts by European Union finance ministers to ring fence the debt crisis to the three already-bailed out nations. Italy’s 10-year borrowing costs surged to 5.68% yesterday, the highest since November 2000, while Spanish notes exceeded 6% for the first time since 1997. The cost of default insurance implies their Aa2 investment-grade rankings could be as much as nine steps lower at Ba2 -- below Iceland and on par with El Salvador, according to Moody’s Investors Service. Italy and Spain are being dragged into the crisis on concern soaring bond yields triggered by a failure to resolve rescues of Greece, Ireland and Portugal may make it impossible for them to finance their borrowings. Italy has EUR1.6tn (USD2.25tn) of bonds outstanding, the world’s third-largest debt pile after the U.S. and Japan, while Spain owes EUR655bn. (Bloomberg)
EU: French industrial output climbs on electronics, refining
French industrial production rose for the first time in three months in May, lifted by electric equipment and cars as well as refineries. Output from factories, mines and utilities climbed 2% from April, when it declined a revised 0.5%, statistics office Insee said today. Economists forecast a 0.5% gain, according to the median of 12 estimates in a Bloomberg News survey. France’s expansion probably almost stalled in the three months through June as demand for exports slowed and consumer spending declined, according to economists at Barclays Capital and BNP Paribas SA. The trade deficit of the euro area’s second largest economy rose to a record in May as exports declined. (Bloomberg)
US: Obama says he continues to push ‘largest possible deal’
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. (Bloomberg)
US stocks decline on global debt concerns as financials fall
US stocks slid, giving the Standard & Poor’s 500 Index its biggest two-day drop since March, as concerns grew Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. JPMorgan Chase & Co. and Bank of America Corp fell more than 3.2%, driving financial shares in the S&P 500 down the most since 1 June, as Italian and Spanish government bonds sank. Alcoa Inc. tumbled 2.9% before the aluminum producer started the earnings season after the market close. All 10 S&P 500 industries slumped, falling at least 0.7%. The S&P 500 retreated 1.8% to 1,319.49, its lowest level since 29 June. The gauge fell 2.5% over two sessions, the most since 16 March. The Dow Jones Industrial Average declined 151.44 points, or 1.2 %, to 12,505.76. (Bloomberg)
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