DJIA chart reading : correction range bound downside biased.
Hang Seng chart reading : downside biased with possible pullback correction
GLOBAL MARKETS: Euro dips as Greek decision deferred; stocks rise
HONG KONG, June 20 (Reuters) - Equities edged higher on Monday on mild bargain-hunting after falling to a three-month low last week while the euro's early gains were clipped after finance ministers deferred a decision to disburse the next round of funds to Greece until July.
The single currency fell back towards the session lows after euro zone finance ministers postponed a final decision on extending a further 12 billion euros ($17 billion) in emergency loans to Greece, saying Athens would first have to introduce harsh austerity measures.
Stocks, euro, commods hit by Greek loan delay
LONDON, June 20 (Reuters) - World stocks, the euro and crude prices fell on Monday and bond yields in heavily indebted euro zone countries jumped after the region's finance ministers delayed a final decision on extending emergency loans to Greece.
"At the moment then, we are still in limbo. The EU and ECB appear to have reached a compromise on private sector involvement in the Greek bailout, but are still demanding austerity measures which are unacceptable to some in Greece," said Kit Juckes, currency strategist at Societe Generale.
IMF cuts U.S. growth forecast, warns of crisis
SAO PAULO, June 17 (Reuters) - The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are "playing with fire" unless they take immediate steps to reduce their budget deficits.
The IMF, in its regular assessment of global economic prospects, said bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies.
Mixed data point to wobbly U.S. recovery
NEW YORK, June 17 (Reuters) - U.S. consumer sentiment worsened this month on renewed concerns about the outlook for the economy and as gloom about job and income prospects persisted, data showed on Friday.
But a separate report suggested the pace of the recovery could soon pick up after spinning its wheels in the first half of the year.
Professor Bernanke Warning of Japan Paralysis Meets Fed Chief Facing Same (Source: Bloomberg)
As a Princeton University professor, Ben Bernanke castigated the Bank of Japan in 2000 for a “case of self-induced paralysis” that led to a decade of stagnation. Now, the Federal Reserve chairman may be allowing the U.S. central bank to fall into the same trap after its second round of quantitative easing ends this month. By all but ruling out another cycle of bond purchases, Fed officials have left themselves with little in the way of policy options to respond to slowing growth and rising unemployment. This raises the risk that the U.S. will remain saddled with what Bernanke himself has called a “frustratingly” sluggish recovery that leaves millions of Americans out of work. “I worry that QE3 will be hostage to QE2,” said Vincent Reinhart, a former director of the Fed’s monetary-affairs division who is now a scholar at the American Enterprise Institute in Washington. “That may lead to that self-induced paralysis” in further easing policy to aid the economy.
U.S. Stocks Gain as Luxembourg’s Juncker Says Greek Solution Will Be Found (Source: Bloomberg)
U.S. stocks rallied, sending the Standard & Poor’s 500 Index up for a third straight day, as Luxembourg’s Jean-Claude Juncker assured investors that a solution will be found to Greece’s debt crisis. Caterpillar Inc. (CAT), the world’s biggest maker of construction equipment, climbed 2.3 percent as Raymond James & Associates raised its rating. Biogen Idec Inc. (BIIB) jumped 4.1 percent after ISI Group Inc. recommended buying shares of the largest maker of multiple sclerosis medicines. Wal-Mart Stores Inc. (WMT) increased 0.4 percent after the U.S. Supreme Court rejected an effort to sue the world’s largest retailer for discrimination.
Dollar Weakens Versus Euro on Speculation U.S. Home Sales Fell Last Month (Source: Bloomberg)
The dollar fell against a majority of its most-traded peers before a report forecast to show home sales dropped in May to this year’s low, keeping pressure on the Federal Reserve to maintain its accommodative policy. The U.S. currency weakened versus the euro before Fed policy makers begin a two-day meeting amid signs the world’s largest economy is losing momentum. The euro advanced as European leaders reassured investors a Greek default on its debts can be avoided. Australia’s dollar snapped yesterday’s decline before the Reserve Bank releases minutes of this month’s meeting.
Dollar to Gain as Asian Interest Rates Are Increased, Morgan Stanley Says (Source: Bloomberg)
The dollar will rebound through 2011 as Asian central banks raise interest rates to curb inflation, damping economic growth and demand for the region’s assets, according to Morgan Stanley. “We’re looking for the dollar to regain some stability over the second half of the year,” said Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley in London, in a telephone interview. “We’ll see the global investment environment turn less favorable as liquidity conditions start to change at a macro level.”
China Home Prices Cool as Government Steps Up Bid to Avoid Property Bubble (Source: Bloomberg)
China’s effort to cool home prices is damping the market for existing homes, with prices in May falling from the previous month in 23 of 70 cities measured. That’s more than the 16 cities that posted declines in April, data from the National Bureau of Statistics posted to its website June 18 showed. Existing home prices in Beijing fell 0.2 percent from April while those in Shanghai increased 0.2 percent. The price of new homes, typically sold by developers, rose last month in 67 of the 70 cities monitored.
More Heavy Rain Predicted for China (Source: Bloomberg)
More rains are predicted for parts of China in the next several days after flooding killed dozens and forced thousands to flee their homes. Heavy rain is forecast to hit Sichuan, Shaanxi and Gansu provinces before moving east to Henan and Shandong, the National Meteorological Center said today. Rain in the middle and lower reaches of the Yangtze River will ease, it said on its website.
Japanese Stocks Rise as Juncker Pledges Solution to Greece; Toyota Climbs (Source: Bloomberg)
Japanese stocks rose the most in a week as concern eased that Greece will default on its debt after Luxembourg’s Jean-Claude Juncker assured investors a solution will be found to the crisis.
Banks Holding Record $1.45 Trillion to Buy Treasuries as Savings Top Loans (Source: Bloomberg)
Japan’s biggest bond investors see increasing parallels between the nation’s government debt market and Treasuries, indicating that historically low yields in the U.S. have room to fall. Just as in Japan, deposits at U.S. banks exceed loans, reaching a record $1.45 trillion last month, Federal Reserve data show. As recently as 2008, there were more loans than deposits. The gap is also at an all-time high in Japan, where banks use the money to buy bonds, helping keep yields the lowest in the world even though the country has more debt outstanding than America and a lower credit rating.
Papandreou Faces Confidence Vote That May Decide Greece’s Fate (Source: Bloomberg)
Greek Prime Minister George Papandreou faces a confidence vote in his government today that may determine whether Greece becomes the first euro-area country to default. Tonight’s vote caps a week of turmoil for Papandreou, who fended off a revolt from the ranks of his ruling socialist Pasok party in parliament last week. That came after opposition parties rejected his call for a national unity government. European Union leaders have insisted Papandreou secure multi- party support for austerity measures that are a condition of the aid needed to avoid default as soon as next month.
IMF Not Negotiating New Greek Bailout: Lipsky (Source: Bloomberg)
The International Monetary Fund isn’t negotiating a second rescue package for Greece while it weighs whether to approve the next payment of the country’s initial program, acting IMF head John Lipsky said. “We are not negotiating a new program,” Lipsky said today in a press conference in Luxembourg. “There always exists that possibility, but there has been no request by the Greek authorities to negotiate such a new program. We are concentrated today on the existing program and what is needed to put it back on track and to therefore allow the next disbursement.”
Greek Default Would Spell ‘Havoc’ for European Banks a Year After Bailout (Source: Bloomberg)
A year after European officials bailed out Greece, investors say the region’s banks haven’t raised sufficient capital or cut loans enough to withstand the contagion that may follow a default.
IMF Says Sovereign-Debt Crisis May Overwhelm Favorable Euro-Area Outlook (Source: Bloomberg)
The International Monetary Fund warned that Europe’s debt crisis has the potential to crush the otherwise positive economic outlook for the region unless policy makers step up efforts to resolve it. “A broadly sound recovery continues, but the sovereign crisis in the periphery threatens to overwhelm this favorable outlook, and much remains to be done to secure a dynamic and resilient monetary union,” the Washington-based fund said in its concluding statement on euro-area policies today. “Failure to undertake decisive action could rapidly spread the tensions to the core of the euro area and result in large global spillovers.”
Australia Boosts Predicted Commodity Sales on Increased Production, Prices (Source: Bloomberg)
Australia, the world’s largest shipper of coal, iron ore and wool, raised its forecast for export earnings 2 percent to a record for the next fiscal year, driven by expectations of higher production and export prices.
FOREX-Euro softer, hurt by Greek rescue deal impasse
LONDON, June 20 (Reuters) - The euro was pinned down near recent lows on Monday, as a delay to the next tranche of Greek bailout funds undermined confidence in the common currency, with the options market and technical charts suggesting more losses.
Euro zone finance ministers said they expected 12 billion euros in emergency loans to Greece to be paid by mid-July, but the disbursement would depend on the Greek parliament first approving new austerity measures.
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