DJIA chart reading : pullback correction downside biased.
Hang Seng chart reading : correction range bound little downside biased.
Treasuries Snap Rally on Concern Demand Will Wane at Next Week’s Auctions (Source: Bloomberg)
Treasuries snapped a rally that sent yields to the lowest level this year on concern the decline in rates will erode demand when the U.S. sells three-, 10- and 30- year debt next week.
U.S. Consumer Sentiment Unexpectedly Falls to Six-Month Low on Job Outlook (Source: Bloomberg)
Consumer sentiment unexpectedly decreased in May to the lowest level in six months as Americans grew concerned over the outlook for jobs and the economy, while a measure of home prices dropped to a nine-year low.
No Love Lost for U.S. Debt as Bond Dealers Share Fewer Treasuries With Fed (Source: Bloomberg)
The world’s biggest bond dealers are finding fewer Treasuries to sell to the Federal Reserve as its $600 billion purchase program nears an end, a signal of rising demand even as the largest buyer steps away. The two-week moving average of bond dealers’ submissions for sales to the Fed has fallen 37 percent to $17 billion a day from the $27.3 billion peak offered in November, according to Bloomberg data. Price swings have diminished to levels last seen before the financial crisis began in 2007, helping bonds outperform stocks this month by the most since July.
Home Prices in 20 U.S. Cities Decline to Eight-Year Low, Case-Shiller Says (Source: Bloomberg)
Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery. The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.
Businesses Expand Less Than Forecast, Chicago Index Shows (Source: Bloomberg)
Business activity in the U.S. cooled more than forecast in May, a sign manufacturing may be leveling off after leading the recovery in the world’s largest economy. The Institute for Supply Management-Chicago Inc. said today its business barometer fell to 56.6 this month, the lowest since November 2009, from 67.6 in April. Figures greater than 50 signal expansion. Economists forecast the gauge would fall to 62, according to the median estimate in a Bloomberg News survey.
Rising Rents Risk Higher U.S. Inflation as Fed’s Rate Restraint Questioned (Source: Bloomberg)
For all the attention given to almost $4-a-gallon gas, the biggest threat to containing U.S. inflation may be the shift away from homeownership, which is pushing up the cost of leases across the nation’s 38 million rented residences. Shelter represents about 40 percent of the consumer price index excluding food and energy and accounted for almost one quarter of the 1.3 percentage point rise in April. That share has grown as falling home prices shake Americans’ confidence in housing as an investment.
Dollar Falls to 3-Week Low Versus Euro Before U.S. Hiring, Factory Data (Source: Bloomberg)
The dollar fell to a three-week low against the euro before reports likely to show U.S. companies hired fewer workers and manufacturing cooled. The U.S. currency declined against 11 of its 16 most-traded peers before the private ADP Employers Services report is released today, followed by Labor Department figures on June 3. Australia’s dollar was 0.2 percent from a four-month low against New Zealand’s before a report that economists said will show the larger nation’s economy shrank last quarter by the most in two decades.
U.S. House Defeats Debt Ceiling Measure (Source: Bloomberg)
Legislation to raise the U.S. debt limit by $2.4 trillion failed to win House approval today in a vote Democrats said was rigged to ensure its defeat. Republicans who control the House last week announced the vote as a way to demonstrate that lawmakers don’t support extending the $14.3 trillion debt limit without an agreement with President Barack Obama’s administration on significant spending cuts to curb government spending.
U.S. Stocks Advance on Speculation About Additional Bailout Aid for Greece (Source: Bloomberg)
U.S. stocks advanced, trimming the biggest monthly drop since August for the Standard & Poor’s 500 Index, amid speculation about additional aid for Greece. Apple Inc. (AAPL) rallied 3.1 percent after saying Chief Executive Officer Steve Jobs will introduce a cloud-computing product and new software next week. Intel Corp. (INTC) gained 1.4 percent as the world’s largest chipmaker seeks to challenge tablet makers with a new type of thinner laptop called an “ultrabook.” General Dynamics Corp. (GD) climbed 4.2 percent after receiving a $744 million contract from the U.S. Navy.
Debt-Ceiling Breach May Hurt Dollar More Than Treasuries, Citigroup Says (Source: Bloomberg)
A breach of the U.S. debt ceiling may affect the dollar more than Treasuries because international holders of the debt may view the risk of permanent losses greater than domestic investors, according to Citigroup Inc. “The foreign exchange reaction to a debt ceiling breach would be sharper and probably more permanent,” Steven Englander, the head of Group of 10 foreign-exchange strategy in New York at Citigroup, wrote in a note today. “It would legitimately tax foreign investor patience and lead to further dollar dumping whenever the opportunity arises.”
Dollar Comeback Produces Best Asset Returns for First Time Since November (Source: Bloomberg)
The dollar beat stocks, commodities and bonds in its first monthly gain since November, as the euro- region debt crisis deepened and evidence mounted that the global economic recovery is losing momentum.
China May Shift Local Government Debt, Reuters Says (Source: Bloomberg)
China’s regulators plan to shift as much as 3 trillion yuan ($463 billion) of debt off of local governments, reducing the possibility of defaults that could threaten stability, Reuters said, citing unidentified people.
China ups power prices as shortages loom
BEIJING, May 30 (Reuters) - China said on Monday it would raise electricity prices for some users by about 3 percent, the first increase since 2009 as it tackles its worst power shortage in seven years.
The power price rise affects industrial, commercial and agricultural users in 15 provinces, state media said after a briefing by the National Development and Reform Commission (NDRC), China's top economic planning agency.
China's commodities imports to stage comeback
SHANGHAI, May 31 (Reuters) - There are early signs that China's appetite for overseas oil, copper, aluminium, iron ore and coal will recover in the second half of 2011, having been dogged for much of the first half by the government's campaign to put the brakes on growth and inflation.
Higher seasonal demand, shrinking stockpiles and a narrowing gap between domestic and LME prices indicate that China's copper demand may be turning a corner, even if Beijing doesn't relax its tightening stance.
Japanese Stocks Swing Between Gains, Losses; Kansai Electric Declines (Source: Bloomberg)
Japanese stocks swung between gains and losses as utilities fell on the cost of the Fukushima nuclear disaster and exporters advanced after the yen weakened.
EU Rules Out ‘Total Restructuring’ of Greek Debt, Deal Seen by End of June (Source: Bloomberg)
European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker , head of the group of euro-area finance ministers.
Euro zone May inflation slows, ECB hike still seen
BRUSSELS, May 31 (Reuters) - Euro zone inflation slowed in May largely thanks to lower oil prices, but the dip is likely to be temporary and will not stop the European Central Bank from raising interest rates in July.
European Union statistics office Eurostat estimated that inflation in the 17 countries using the euro was 2.7 percent year-on-year this month, down from 2.8 percent in April.
Greece bailout hopes lift euro and stocks
LONDON, May 31 (Reuters) - The euro rose to a three-week high against the dollar on Tuesday, while world stocks and oil prices advanced on a report that Germany could make concessions to facilitate a new aid package for Greece.
"There's quite a big risk premium in euro based on Greek default concerns, so if Germany lends more money to get them through to 2013, the chances of a disorderly restructuring further down the line become much reduced," Adrian Schmidt, currency analyst at Lloyds Banking Group, said.
Australia’s Dollar Trades Near Four-Month Low Versus Kiwi Before GDP Data (Source: Bloomberg)
Australia’s dollar traded 0.2 percent from a four-month low against its New Zealand counterpart before a report today forecast to show the larger nation’s gross domestic product shrank last quarter. The so-called Aussie also maintained losses against most major counterparts before data that economists said will show manufacturing slowed in China, Australia’s biggest trade partner. The South Pacific currencies were supported as stocks and commodities rose, buoying demand for higher-yielding assets.
FOREX-Euro climbs on Greek aid report, gains capped
LONDON, May 31 (Reuters) - The euro hit a three-week high against the dollar on Tuesday after a report said Germany could make concessions on efforts to put together a bailout for Greece, helping to ease fears over a Greek debt restructuring.
The single currency rose to $1.4425 according to electronic trading platform EBS, but further gains were capped by offers seen above that level, while technical resistance loomed around $1.4450.
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