Economy: Mustapa expects exports to rebound
Malaysia is optimistic its exports will rebound in May and help meet 2012 growth target of 5% to 6%, after slowing by 0.1% in March and April this year. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the numbers obtained in May indicate that the Malaysia’s exports are well within the target of 5% to 6%. (Business Times)
Investors will still be allowed to own more than 50% of a local bank after the issuance of a new ownership regulation next month, according to Bank Indonesia deputy governor Muliaman Hadad, who stressed that “the approval will be very selective and will apply to very special cases.” (The Jakarta Post)
China: Flash PMI points to rising pressure on job market. HSBC flash PMI readings show continued weakening in export and domestic demand, increasing pressure on job market. June flash PMI was 48.1 vs. final reading of 48.4 in May. (Source: Bloomberg)
China: Said to propose keeping limit on local government loans
China’s banking regulator proposed keeping a cap on local government loans to curtail defaults while encouraging funding for railways, roads and affordable homes, a person with direct knowledge of the matter said. The China Banking Regulatory Commission suggested limiting loans to local government financing vehicles to levels reached at the end of 2011 in a report sent to the cabinet after Premier Wen Jiabao’s call last month for the government to focus on growth. (Bloomberg)
Taiwan: The central bank kept interest rates unchanged for the fourth straight meeting to bolster growth as a faltering global recovery hurts the island's exports, even as it took more steps to curb property prices. The monetary authority, which has held off from raising interest rates for a year, left the discount rate on 10-day loans to banks at 1.875%. (Source: Bloomberg)
EU: ECB poised to ease collateral rules
ECB is poised to relax its collateral rules for central bank loans to ease strains on commercial banks in Spain and the rest of southern Europe, sources said. ECB officials have broadly agreed to make more types of securities, including certain mortgage-backed and asset-backed securities, eligible as collateral at its lending facilities. Details of the plan still need to be finalized, but a decision is expected on Friday. (Bloomberg)
E.U: Manufacturing output shrank at the fastest pace in three years in June as a worsening fiscal crisis clouded global economic-growth prospects. A gauge of euro-region manufacturing PMI fell to 44.8 from 45.1 in May, London-based Markit Economics said in an initial estimate. That's the lowest in 36 months.(Source: Bloomberg)
U.K: Retail sales rose more than economists forecast in May, recovering some of the ground lost the previous month when poor weather damped demand. Sales including auto fuel gained 1.4% MoM from April, the Office for National Statistics said. Retail sales fell a revised 2.4% MoM in April, curbed by the wettest April on record. Excluding fuel, sales increased 0.9% MoM in May. (Source: Bloomberg)
US: Firings stay elevated and factories retrench
More Americans than forecast filed claims for jobless benefits and manufacturing in the Philadelphia region shrank, adding to evidence the US economic expansion is weakening. Applications for unemployment insurance payments fell by 2,000 to 387,000 in the week ended 16 June, Labor Department figures showed. The median forecast of 45 economists surveyed called for 383,000. Meanwhile, the Federal Reserve Bank of Philadelphia’s factory index dropped to minus 16.6 in June, the lowest level since August. (Bloomberg)
U.S: Sales of existing homes fell in May to 4.55 million. Purchases of existing properties dropped 1.5% MoM to a 4.55 million annual rate last month, figures from the National Association of Realtors showed. (Source: Bloomberg)
U.S: Index of leading economic indicators rose 0.3% MoM in May, propelled by a jump in home-building permits. The Conference Board's gauge of the outlook for the next three to six months increased 0.3% MoM after a 0.1% MoM drop in April, the New York-based group said. (Source: Bloomberg)
U.S: Manufacturing in Philadelphia region shrinks at faster pace in June. The Federal Reserve Bank of Philadelphia's general economic index fell to minus 16.6 in June, the lowest level since August, from minus 5.8 the previous month. The report covers eastern Pennsylvania, southern New Jersey and Delaware. (Source: Bloomberg)
US: Moody’s downgrade top banks
15 of the biggest global banks were downgraded by Moody’s on Thursday, adding to pressure on their borrowing costs and potentially triggering multibillion-dollar collateral calls. Morgan Stanley, seen as the most vulnerable, escaped the three-notch downgrade that Moody’s had threatened but saw its long-term unsecured debt rating cut from A2 to Baa1, three notches above “junk”. Credit Suisse was the only bank under review to incur a three-notch downgrade, from Aa2 to A2. (Financial Times)
US jobless claims in the week ended 16 Jun came in at 387,000, 4,000 higher than consensus (a revised 389,000 in the prior week). (Bloomberg)
US manufacturing PMI slipped to 52.9 in Jun from 53.9 in May, undershooting consensus of 53.8. (Bloomberg)
US stocks tumble as commodities enter bear market on economy
US stocks tumbled, while commodities entered a bear market, after signals of a global slowdown in manufacturing added to disappointing housing and labor market data at the world’s largest economy. Alcoa Inc and Chevron Corp slumped at least 3.4% to pace losses in commodity shares. S&P’s 500 Index futures expiring in September rose 0.2% as bank credit downgrades announced by Moody’s Investors Service matched expectations. The S&P 500 fell 2.2% to 1,325.51 at 4 pm in New York, its second-biggest loss in 2012. The Dow Jones Industrial Average slid 250.82 points, or 2%, to 12,573.57. (Bloomberg)
Global: IMF sees euro crisis at critical stage, sees bank stress
The euro area crisis has reached a “critical stage” and member nations must make a “strong commitment” to the shared currency to stop the plunge in investor confidence, IMF said in a report that recommended issuing common debt as one solution. “Europe’s monetary system needs a closer union of its banks and more fiscal integration to arrest the decline in confidence engulfing the region,” it said. (Bloomberg)
Global: Oil drops below USD80 on signs of slowing economy
Oil in New York tumbled below USD80 a barrel and Brent crude fell under USD90 as reports signalling a global economic slowdown added to concern that demand will slow amid rising supplies. Futures dropped 4%, the most this year as manufacturing slumped in US, China and Europe. Oil stockpiles rose last week to the most since 1990, the Energy Department reported. (Bloomberg)
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