EU - Stress tests face questions over stringency, government help
The European Union’s decision to publish the results of stress tests on the region’s lenders was welcomed by shareholders seeking more transparency. The studies will be done “institution by institution,” French President Nicolas Sarkozy told reporters at an EU summit in Brussels. German Chancellor Angela Merkel said it was important to give “maximum transparency.” Asked how the governments would react if the tests revealed shortcomings, she said the EU has “taken precautions,” including a EUR750bn (USD928bn) financial backstop. (Bloomberg)
EU - To push levies on banks, financial-transaction tax at G-20
European Union leaders vowed to push for global taxes on banks and financial transactions, setting the stage for a conflict over worldwide regulation at next week’s Group of 20 meeting. With Germany, Britain and France pledging to impose levies on their own banks and to clamp down on financial speculation, the EU called for global taxes that have run into opposition from G-20 powers such as China. (Bloomberg)
EU - European construction drops, led by Spain, Portugal
European construction output decreased in April, led by declines in Spain and Portugal. Construction in the 16-nation euro region dropped 0.3% from March, the European Union’s statistics office in Luxembourg said. Construction in Spain fell 4.9% in April from the previous month, report showed. Portugal’s output declined 3.7%, while construction in Germany, Europe’s largest economy, increased 2.6% in April. (Bloomberg)
US - Consumer prices in US fell for second month in May
The cost of living in the US dropped in May for a second month, signaling the world’s largest economy is recovering without causing prices to flare. The 0.2% decline in the CPI was the biggest since December 2008 and followed April’s 0.1% decrease, figures from the Labor Department showed in Washington. Excluding food and fuel, the so-called core rate increased 0.1%. (Bloomberg)
US - Recovery creates few jobs, no inflation
The world’s largest economy will keep expanding in the second half of the year without stoking inflation or generating many jobs, reinforcing the Federal Reserve’s low-interest-rate policy, reports showed. The index of leading indicators, a gauge of the outlook for growth over the next three to six months, climbed 0.4% in May, according to data from the New York-based Conference Board. (Bloomberg)
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