DJIA chart reading : downside biased.
Hang Seng chart reading : side way range bound.
Equities down but not out on U.S. soft patch
SINGAPORE, June 2 (Reuters) - Asian stocks slid on Thursday, with a steady stream of weak U.S. data putting a damper on risk taking ahead of Friday's payrolls report, though valuations will probably in the near term limit a big decline in global share prices.
"U.S. shares needed a correction of their recent steep gains. Japanese shares will be capped for now but cheap valuations will give the market support," said Ryota Sakagami, strategist at Nomura Securities in Tokyo.
Consumer Comfort Rises in U.S. Bloomberg Index as Gasoline Prices Decline (Source: Bloomberg)
Consumer confidence in the U.S. rose for a second week as gasoline prices receded.
US May auto sales dip as price strategy backfires
DETROIT, June 1 (Reuters) - U.S. car sales sputtered in May, slumping to levels that were much lower than expected as higher vehicle prices led consumers to put off purchases in the face of a weakening economy.
Tightening supplies of vehicles after the Japan earthquake emboldened many companies, including Toyota Motor Corp and Honda Motor Co Ltd , to raise car and truck prices, a strategy that analysts and investors said had backfired.
US recovery fears mount after slow jobs, factory data
NEW YORK, June 1 (Reuters) - U.S. companies hired far fewer workers than expected in May and output in the manufacturing sector slowed to its lowest level since 2009, adding to concerns that the U.S. recovery is running out of steam.
Economists slashed their forecasts for Friday's U.S. payrolls report, considered the best barometer of the world's biggest economy, after private-sector job growth tumbled to just 38,000, its lowest level in eight months.
Fed’s QE2 Failed to Boost U.S. Spending, Pimco’s El-Erian Says: Tom Keene (Source: Bloomberg)
The Federal Reserve’s quantitative easing policy failed to meet the “ultimate objective” of boosting employment and economic growth, said Mohamed El-Erian , chief executive officer at Pacific Investment Management Co.
Fed May Signal Balance Sheet Will Stay at Record to Counter U.S. Slowdown (Source: Bloomberg)
A wave of surprisingly weak data on the U.S. economy may spur Federal Reserve policy makers to support growth by making it clear they’re in no hurry to shrink the central bank’s record balance sheet. There’s a “strong possibility” that the Federal Open Market Committee will say following the June 21-22 meeting that it will keep reinvesting proceeds from maturing debt for a while, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. (JPM) in New York. Previously, the FOMC has said it will keep the benchmark interest rate near zero for an “extended period” without a similar pledge about its balance sheet.
U.S. Jobless Claims Fell Less Than Forecast (Source: Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs. Jobless claims fell by 6,000 to 422,000 in the week ended May 28, exceeding the 417,000 median forecast of economists surveyed by Bloomberg News, according to Labor Department figures today in Washington. Another report showed consumer comfort stabilized last week as gasoline prices retreated.
Treasuries Head for Third Weekly Gain as Data Signals Slowing Job Growth (Source: Bloomberg)
Treasuries headed for a third weekly gain before a U.S. report that economists said will show employers hired fewer workers in May.
Moody’s May Cut U.S. If No Debt Limit Progress (Source: Bloomberg)
Moody’s Investors Service said it will put the U.S. government’s Aaa credit rating under review for a downgrade unless there’s progress on increasing the debt limit by mid-July. “The heightened polarization over the debt limit has increased the odds of a short-lived default,” New York-based Moody’s said in a statement today. “If this situation remains unchanged in coming weeks, Moody’s will place the rating under review.”
Dollar Near One-Month Low on Rating Concerns (Source: Bloomberg)
The dollar reached a one-month low against the euro before a report forecast to show U.S. employers added fewer jobs in May, signaling a slowing economy will prevent the Federal Reserve from tightening policy.
Raising Taxes Isn’t A ‘Kiss of Death’ for Employment Growth, History Shows (Source: Bloomberg)
Cutting taxes creates jobs, and raising taxes destroys them. That’s the view of policymakers, from President Barack Obama to his Republican adversaries. Evidence from the last two decades, however, suggests that conventional wisdom is wrong. In the five years after a $241 billion tax increase in 1993, which Republicans criticized as the largest ever, the U.S. economy created more than 15 million jobs and grew at an average annual rate of 3.8 percent.
Sporting-Goods Prices May Increase in Latest Sign of Consumer Inflation (Source: Bloomberg)
Retailers are poised to boost prices on athletic footwear, apparel and sports equipment as they join other industries in passing along rising costs for commodities, foreign labor and freight. More than 90 percent of sporting-goods manufacturers paid higher input costs in the first quarter, and 41 percent of these companies already increased wholesale prices, according to a quarterly survey of private, independent vendors and retailers conducted by Robert W. Baird & Co.
China Lending-Binge Hangover Looms in 2013 as Wen Spurs Low-Income Housing (Source: Bloomberg)
China’s plan to rein in property prices with a record homebuilding program may worsen local debt risks even as it proves a boon to companies from domestic cement makers to Chilean copper exporters. Premier Wen Jiabao aims to build 36 million low-cost homes by 2015, an initiative that will see 2 trillion yuan ($307 billion) added to local government borrowing by 2012, bringing it to a total 12 trillion yuan, Standard Chartered Plc estimates. The surge of loans to local authorities may spark a wave of bank bailouts that hobble economic growth.
Chinese Economic Slowdown May Lead to 75% Plunge in Commodities, S&P Says (Source: Bloomberg)
A “sudden” slowdown in China may lead commodity prices to fall as much as 75 percent from current levels, Standard & Poor’s said. Unexpected shifts in government policies or problems in the banking sector may trigger such a slowdown, S&P said in a report e-mailed today. The floor for aluminum is 65 cents to 70 cents a pound ($1,433 to $1,543 a metric ton), compared with about $1.20 a pound now and copper’s floor is $1.50 to $1.75 a pound, compared with $4.10 a pound currently, S&P said.
Japan’s 10-Year Bonds Are Poised for Weekly Drop Amid Political Turmoil (Source: Bloomberg)
Japan’s 10-year bonds were set for the biggest weekly drop in two months on prospects political turmoil may delay reconstruction from a March earthquake and add to credit concerns.
Nikkei Advances as Euro Gains Against Yen, Investors Eye U.S. Jobs Report (Source: Bloomberg)
Japan’s Nikkei 225 (NKY) Stock Average advanced after the euro strengthened against the yen and as investors await a U.S. jobs report. Nintendo Co., a video-game console maker that gets a third of its revenue from Europe, and Fanuc Corp., Japan’s No. 1 maker of industrial robots, both gained at least 0.4 percent after the yen weakened against the euro, boosting the earnings outlook for exporters. Mitsubishi Corp., Japan’s biggest commodities trader, declined after metal prices dropped.
Basel Capital-Buffer Rule May Affect 26 Financial Firms, FSB’s Memo Says (Source: Bloomberg)
As many as 26 financial firms could be forced to hold extra capital to avoid collapses that would threaten global financial stability, according to a participant at a meeting of the Financial Stability Board last week.
E. Coli Outbreak Infects 1,600 Across Europe as Scientists Seek Out Cause (Source: Bloomberg)
More than 1,600 people in Europe have been infected with a strain of E. coli bacteria that’s never been seen in an outbreak before, the World Health Organization said, as authorities search for the source of the malady. The bacteria, which began spreading in Germany, has sickened 1,064 there, an increase of 268, while 470 people have symptoms of a condition that can cause acute kidney failure, up by 97 from yesterday, the WHO said today in a statement on its website. Cases have also been reported in nine other European countries. Seventeen people in Germany and one in Sweden have died, Deutsche Presse Agentur reported, citing local officials.
Trichet Proposes Euro-Area Finance Ministry to Coordinate Fiscal Policies (Source: Bloomberg)
European Central Bank President Jean- Claude Trichet said governments should consider setting up a finance ministry for the 17-nation euro region as the bloc struggles to contain a region-wide sovereign debt crisis.
BOE’s Fisher Says He Would Consider Expanding Asset Purchases in Downturn (Source: Bloomberg)
Bank of England policy maker Paul Fisher said he would consider adding to the bank’s emergency bond purchases if the U.K. economy took a “sudden downturn.”
“I would consider it and I’ve said I still hold that possibility open,” Fisher, the bank’s executive director for markets, said in an interview with the Daily Mail newspaper published on its website late yesterday. Still, he added he was “somewhat reluctant” since the threat of deflation subsided.
Spain Auctions 4 Billion Euros of Government Bonds, Meeting Maximum Target (Source: Bloomberg)
Spain sold 4 billion euros ($5.8 billion) of bonds, meeting the maximum target the Treasury set for the sale and sending the nation's bonds higher. The Treasury in Madrid said it sold 2.75 billion euros of three-year bonds at an average yield of 4.037 percent, compared with 3.568 percent the last time the securities were auctioned on April 7 and 4.118 percent on the secondary market before the sale. It also sold 1.2 billion euros of four-year debt at an average yield of 4.23 percent.
Moody's cuts Greece, sees debt restructuring likely
NEW YORK/ATHENS, June 1 (Reuters) - Moody's on Wednesday cut Greece's credit rating by three notches to an extremely speculative level on debt restructuring worries and warned that more downgrades could come.
Citing a growing risk that the government will fail to stabilize its debt position without a debt restructuring, Moody's cut Greece's rating to Caa1 from the previous level of B1, bringing it seven notches into junk territory.
Thai Vote May Spur Inflation, Forcing Higher Rates as Thaksinomics Returns (Source: Bloomberg)
Thailand’s election may force the central bank to add to seven interest-rate increases in the past year, as promises of higher wages and handouts by politicians threaten to spur inflation. Prime Minister Abhisit Vejjajiva has pledged to raise the minimum wage by 25 percent, give cash to the elderly and guarantee farmers’ incomes to appeal to voters loyal to exiled former premier Thaksin Shinawatra. The opposition Pheu Thai party, led by Thaksin’s sister, has promised tablet PCs, rice- price guarantee schemes, high-speed trains, dams, and a new city.
FOREX-Euro at 1-mth high as dollar's struggles get harder
LONDON, June 2 (Reuters) - The euro rose to a one-month high against the weak dollar on Thursday, boosted by expectations of a quick-fix solution to the Greek debt crisis, although gains could be checked by investors selling into the bounce.
The euro was also helped by strong demand at a Spanish bond auction, comments by European Central Bank President Jean-Claude Trichet, and the struggling dollar, which fell to a one-month low against a basket of currencies.
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