20110614 1008 Global Economic Related News.

US: Lawmakers say agreement on cutting debt would boost flagging economy
Congress could help improve the US economic recovery by reaching a debt-reduction deal as they face a 2 Aug deadline that risks sending the government into default. Lawmakers are haggling over spending cuts and budget reforms as they seek a deal to raise the USD14.3tn debt limit. Leaders of two separate bipartisan efforts last week said they are stepping up efforts to reach a debt-reduction deal before the 2 Aug deadline to expand the debt ceiling or risk a government default. A series of disappointing economic reports has added to the pressure for lawmakers to come to an accord. (Bloomberg)

Japan: Machinery orders in April drop in sign companies pare spending after the March 11 earthquake and tsunami. Factory orders declined 3.3% MoM in April from March, when they rose 1% MoM, the Cabinet Office said. Orders are used as an indicator of capital spending in three to six months. (Source: Bloomberg)

China: Lending unexpectedly tumbles, adding to evidence economy is slowing
China’s lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that the world’s second-biggest economy is cooling. Loans were RMB551.6bn (USDD85bn), less than the RMB650bn median estimate in a Bloomberg News survey of 20 economists and RMB639bn a year earlier. M2, the broadest measure of money supply, rose 15.1%, the People’s Bank of China said on its website. (Bloomberg)

EU: ECB, Germany may be forced to compromise
The confrontation between the European Central Bank and Germany over bailing out Greece risks causing so much damage that officials may be forced to compromise. ECB President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over investors’ role in the second Greek rescue in 14 months. The dispute turns on how politicians make good on a promise to push creditors to pay some of the cost, a step that Trichet said on 9 June could be an “enormous mistake.” Unless a deal can be struck to guarantee Greece’s financing needs for the next 12 months, the International Monetary Fund has threatened to withhold its share of what remains of Greece’s original EUR110bn (USD159bn) bailout. (Bloomberg)

EU: Greece receives lowest credit rating by S&P
Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history. Greece’s government, which plans to sell EUR1.25bn (USD1.8bn) of 26-week Treasury bills today, said that the downgrade overlooked “intense” talks between European officials to address the nation’s financing needs. Credit- default swaps on Greece, Ireland and Portugal surged to records yesterday on concern governments’ struggles to resolve the turmoil will threaten their ability to pay their debts. (Bloomberg)