20110609 0944 Global Market Related News.

 DJIA chart reading : downside biased with possible pullback.

Hang Seng chart reading : downside biased.

Asian Stocks Decline on U.S. Economic Slowdown (Source: Bloomberg)
Asian stocks fell, dragging the regional benchmark index to its lowest level in two weeks, after the Federal Reserve said the economy is slowing in some areas of the U.S., boosting concern the global recovery may falter. Canon Inc. (7751), the world’s biggest camera maker, lost 0.7 percent in Tokyo. Toyota Motor Corp. (7203), the world’s largest carmaker that gets 28 percent of sales in North America, dropped 0.6 percent. Newcrest Mining Ltd. (NCM), Australia’s No. 1 gold producer, declined 1.4 percent after cutting its full-year output forecast for the third time this year.

Stocks, dollar fall as Bernanke fails to inspire
SINGAPORE, June 8 (Reuters) - Asian stocks fell on Wednesday and the dollar wavered after uninspiring comments from U.S. Federal Reserve Chairman Ben Bernanke added to worries about the slowing global economy.
"We don't expect much in the near term without fresh developments," she said. "There is concern over what's going to be happening with global growth. Double-dip (recession) worries will come back."

U.S. Economy ’Steady’ in Most Areas: Fed (Source: Bloomberg)
The Federal Reserve said the economy expanded at a “steady pace” in most of the U.S. while slowing in four of 12 regions as consumers contended with higher food and fuel prices and shortages of parts reduced auto production.

U.S. Needs Austerity to Reset Economy, Pimco Official Says: Tom Keene (Source: Bloomberg)
The U.S. should stop kicking “the can down the road” and implement fiscal austerity measures so the economy can fully recover from the financial crisis, according to Pacific Investment Management Co.’s Neel Kashkari. The government should abandon stimulative measures and focus on economic adjustments in order to allow for long-term growth, Kashkari, managing director and head of new investment at Newport Beach, California-based Pimco, said in an interview on Bloomberg Television’s “Midday Surveillance” with Tom Keene.

U.S. Policy Prompts Dollar Questions: Gross (Source: Bloomberg)
Pacific Investment Management Co.’s Bill Gross said foreigners are questioning the dollar’s role as the world’s reserve currency because of U.S. policies that keep borrowing rates low to reduce the nation’s debt burden. Gross, manager of world’s biggest mutual fund, reiterated that investors should avoid U.S. Treasuries because they’re not being compensated for the risk of inflation. Investors should buy debt of nations that maintain better fiscal and monetary policies such as Canada, Germany and Mexico, he said.

U.S. Stocks Decline, Giving S&P 500 Its Longest Losing Streak Since 2009 (Source: Bloomberg)
U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the longest losing streak since February 2009, as raw-material and financial shares slumped amid growing concern the economy is slowing. Visa Inc. (V) and MasterCard Inc. (MA) fell at least 1.5 percent after the U.S. Senate rejected a six-month delay of a Federal Reserve rule capping debit-card swipe fees set by the companies. Ciena Corp. (CIEN), the maker of network gear for the biggest U.S. phone companies, tumbled 16 percent after reporting a wider- than-estimated loss. Gap Inc. (GPS) slumped 2.4 percent after Barclays Plc cut its recommendation for the largest U.S. apparel chain.

Bernanke glum on growth but gives no stimulus hints
ATLANTA, June 7 (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday acknowledged the economy has slowed but offered no hint the U.S. central bank is considering any more stimulus to accelerate growth.
He also warned members of Congress who might be planning aggressive budget cuts that they have the potential to derail the recovery if cuts in government spending take hold too soon.

Bernanke Says ‘Frustratingly Slow’ Recovery Warrants Accommodative Policy (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the “frustratingly slow” U.S. recovery warrants sustained monetary stimulus while predicting that growth will gain speed in the second half of the year. “The economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed,” Bernanke said yesterday in a speech in Atlanta. At the same time, the Fed “will take whatever actions are necessary to keep inflation well controlled,” he said.

Obama Team Eyes Payroll Tax Break for Employers (Source: Bloomberg)
President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages amid economic reports suggesting the recovery is slowing, according to people familiar with the matter. The idea, in preliminary stages of discussion, is among several being debated in the administration with the aim of boosting hiring, the people said on condition of anonymity to discuss internal deliberations. The unemployment rate in May rose to 9.1 percent, the highest level this year, and the economy is a main focus of the political discussion in Washington.

China floods kill 24, force 100,000 to evacuate
BEIJING, June 8 (Reuters) - Heavy rain drenched a swathe of what had been drought-gripped southern and eastern China, killing 24 people and forcing more than 100,000 to evacuate, state media reported on Wednesday.
The drought has damaged crops and exacerbated a power shortage by cutting power generation from dams, adding a slight bump to near three-year high consumer inflation.

Japan Economy Contracted Less Than Estimated (Source: Bloomberg)
Japan’s economy contracted less than the government initially estimated in the first quarter, a sign the economic slump caused by the March 11 earthquake and tsunami wasn’t as deep as expected. Gross domestic product shrank at an annualized 3.5 percent rate in the three months ended March 31, less than the 3.7 percent contraction reported last month, the Cabinet Office said today in Tokyo. The median forecast of 23 economists surveyed by Bloomberg News was for a 3 percent decrease.

Japanese Stocks Drop for First Time in Three Days on U.S. Slowdown Concern (Source: Bloomberg)
Japanese stocks declined for the first time in three days after the Federal Reserve said the U.S. economy is weakening in some regions, sparking concern that the global recovery is slowing. Canon Inc. (7751), the world’s biggest camera maker, sank 1.2 percent. Toyota Motor Corp. (7203), an automaker that earns about 70 percent of its revenue abroad, slid 1 percent after the yen strengthened, cutting the earnings outlook for the exporter. Tokyo Electric Power Co., owner of the nuclear power plant crippled by March’s earthquake and tsunami, dropped 11 percent.

South Korea to Weigh Rate Increase as Household Debt Poses Risk for Growth (Source: Bloomberg)
The Bank of Korea will weigh an interest-rate increase tomorrow as swelling household debt and weakness in the global economy pose threats to growth.

Euro Rises on Prospects ECB’s Trichet Will Signal Rate Rise for Next Month (Source: Bloomberg)
The euro traded 0.6 percent from a one-month high versus the dollar on speculation European Central Bank President Jean-Claude Trichet will today signal policy makers are likely to raise interest rates next month.

Pound Weakens After Moody’s Says U.K.’s Aaa Credit Rating Might Be at Risk (Source: Bloomberg)
The pound weakened against the dollar and the yen after Moody’s Investors Service said the U.K.’s Aaa credit rating may be at risk should the government miss its debt-reduction targets amid slowing growth. Sterling fell to the weakest in more than three weeks versus the yen even as Moody’s said the nation’s sovereign ranking is “stable.” The European Commission said yesterday that the U.K. government faces a “challenge” to implement its planned budget-deficit reduction program and some of its growth forecasts are too optimistic. Data today showed U.K. shop-price inflation decelerated in May.

King’s Position on Record-Low Rate Boosted by Fisher Caution on Recovery (Source: Bloomberg)
Bank of England Governor Mervyn King’s push to keep interest rates at a record low may have strengthened this month as his top official for financial markets leads a defense against advocates for an increase. Paul Fisher said last week he wants to be sure the economy is over its “soft patch” before the key interest rate is increased and that officials who share his view should be more vocal. The King and Fisher faction of the divided Monetary Policy Committee will probably see their argument win again today, with all 55 economists in a Bloomberg News survey forecasting the bank will leave the benchmark at 0.5 percent.

N.Z. Keeps Key Rate at 2.5% to Boost Recovery (Source: Bloomberg)
New Zealand’s central bank kept its benchmark interest rate at a record low today, while signaling it will need to boost borrowing costs to contain prices as the nation recovers from its deadliest earthquake in 80 years. “As gross domestic product growth picks up, underlying inflation is expected to rise,” Governor Alan Bollard said in a statement today in Wellington after leaving the benchmark at 2.5 percent. “A gradual increase in the official cash rate over the next two years will be required to offset this.”

Brazil Raises Key Interest Rate to 12.25% After Inflation Exceeds Target (Source: Bloomberg)
Brazil’s central bank raised its benchmark interest rate for a fourth straight meeting today after consumer prices exceeded the upper limit of its target range for the first time since 2005.

FOREX-Dlr hovers near 1-mth lows vs yen, euro capped
LONDON, June 8 (Reuters) - The dollar dropped to a one-month low against the yen on Wednesday while commodity currencies fell as investors pared holdings in riskier assets, driven by fears that a slow U.S. economic recovery could drag on global growth.
The yen rose broadly, pushing down the dollar to 79.75 yen -- its lowest since May 5 -- after a series of stop-loss orders were triggered as the U.S. currency failed to hold support around the 80 yen level.