Malaysia: Government seeks extra operating expenditure. The Government tabled a bill seeking a supplementary allocation of RM13b for operating expenditure, raising the spending budget for this year by 8% to RM176b. RM6b will be allocated to the Finance Ministry which includes RM5.6b subsidy for petroluem products. RM1.5b will be for Education Ministry and RM1b to Health Ministry. (Source: The Star)
Malaysia: Exports to hit RM700b in 2011, FDI to at least match RM29b recorded in 2010. Exports is expected to rise 9.5% to RM700b in 2011 from RM639.4b recorded last year, while FDI into Malaysia could at least matched if not surpassed last year's figure of RM29b, according to MITI. (Source: The Star)
Malaysia: Government expands the ban on subsidised RON95 sales to now include foreign-registered vehicles (except motorcycles) driven by Malaysians effective immediately. Previously, Malaysians driving foreign-registered vehicles need to show their MyKads. The ban also includes sales of subsidised NGV. (Source: The Star)
Malaysia: Minimum wage by year-end?Minimum wage policy could be implemented by year-end, according to PM. The National Wage Consultation Council Bill 2011 will be presented to Cabinet by the Human Resource Ministry before its tabling in the current Parliament's session. (Source: NST)
China: Raises bank reserve requirements as inflation quickens
China ordered lenders to set aside more cash as reserves after inflation accelerated to the fastest pace in almost three years in May and industrial production rose more than estimates. A half percentage point increase announced by the central bank and effective 20 June will take the ratio to a record 21.5% for the biggest lenders. The move was hours after data showing the inflation rate climbed to 5.5%. Signs the world’s second-biggest economy is maintaining momentum after increases in borrowing costs and curbs on real estate may have encouraged policy makers to add to tightening measures. At the same time, weakness in the global economy and data yesterday showing slower bank lending and money-supply growth may make a decision on further raising interest rates a tougher call. (Bloomberg)
China: Power generation rises 12% YoY in May as factory output expands. Output for the first five months gained 13% YoY to 1.8 trillion kilowatt-hours. (Source: Bloomberg)
India: Inflation accelerated in May, adding pressure on the central bank to extend the fastest round of interest-rate increases among Asia's major economies. The wholesale-price index rose 9.06% YoY after an 8.66% YoY jump in April. (Source: Bloomberg)
S. Korea: Unemployment rate in May declines to a 6-month low as the economic expansion spurred hiring at manufacturers, healthcare and welfare service sectors. The jobless rate dropped to 3.3% in May from 3.6% in April. (Source: Bloomberg)
U.K: Inflation held at the fastest pace since October 2008 last month as Bank of England policy maker Martin Weale repeated his call for higher interest rates. Consumer prices rose 4.5% YoY in May, matching the increase recorded in April. Core inflation eased to 3.3% YoY from 3.7% YoY. (Source: Bloomberg)
Spain: Underlying inflation rate remained at a two-year high in May as rising commodity prices more than offset weak consumer demand. Core inflation, which excludes energy and fresh food, gained 2.1% YoY, matching April's two-year high. Headline inflation, based on European Union calculations, was 3.4% YoY, the same as an initial estimate on May 30. (Source: Bloomberg)
EU: Greek rescue may be delayed by EU divisions on investors’ role
Euro-area finance chiefs struggling to break a deadlock on how to enroll investors in a second Greek rescue without triggering a default said they may need more time to reach a deal. An emergency session of finance ministers in Brussels failed to reconcile a German-led push for bondholders to shoulder part of the cost of a new Greek aid package with European Central Bank warnings backed by France that the move might constitute the euro area’s first sovereign default. With consensus elusive before the target date of a leaders’ summit late next week, finance ministers agreed to convene again on 19 June, a day earlier than planned. Talks may drag on into July, Luxembourg’s Finance Minister Luc Frieden said. (Bloomberg)
US: Wholesale prices rise 0.2%, led by fuel, apparel, textiles
Wholesale costs in the US rose more than forecast in May, led by higher prices for fuel and the fastest rise in 30 years for apparel and textiles. The 0.2% increase in the producer-price index compares with the 0.1% median estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The so-called core measure, which excludes volatile food and energy costs, increased 0.2%, matching projections. The costs of apparel and other fabricated textile products rose 1.0% in May, the fastest since 1.3% in April 1981. Higher input prices mean companies like Under Armour Inc. are passing on increased costs to consumers, whose incomes may be strained by unemployment above 9%. At the same time, Federal Reserve Chairman Ben Bernanke has reiterated that he expects commodity costs to ease in the coming months. (Bloomberg)
US stocks advance on retail sales, China industrial production
US stocks rallied and the Standard & Poor’s 500 Index advanced the most in almost two months after better-than-estimated data on American retail sales and Chinese industrial production. Home Depot Inc. advanced the most in the Dow Jones Industrial Average, gaining 4.5%. Best Buy Co., the world’s largest consumer electronics retailer, surged 4.6% after profit exceeded analysts’ forecasts on rising demand for smartphones. J.C. Penney Co. soared 17 after naming Ron Johnson, Apple Inc.’s retail head, as its CEO. Energy shares rallied the most among 10 groups in the S&P 500 as oil rebounded from its lowest in a month. The S&P 500 rose 1.3%, the most since 20 April, to 1,287.87 at 4 pm in New York. The Dow increased 123.14 points, to 12,076.11. (Bloomberg)
U.S: Retail sales in May fell less than forecast, showing consumers were weathering elevated gasoline costs. The 0.2% MoM decrease reported by the Commerce Department in Washington compared with the median forecast for a 0.5% MoM drop in a Bloomberg News survey of economists. Excluding the biggest slide in auto sales in more than a year, purchases climbed 0.3% YoY. (Source: Bloomberg)
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