DJIA chart reading : correction range bound little downside biased.
Hang Seng chart reading : pullback correction downside biased.
World stocks off 3-week low, focus on Greece
LONDON, June 21 (Reuters) - World stocks and the euro rose from last week's three-week lows as expectations that the euro zone will avoid a messy default of Greek sovereign debt attracted investors back into risky assets.
Investors are awaiting a parliamentary confidence vote for Greek Prime Minister George Papandreou, a step towards the passage of more spending cuts in exchange for foreign loans.
Asian Stocks Rise a Second Day as Greece Vote Boosts Optimism (Source: Bloomberg)
Asian stocks rose, driving the region’s key index up for a second day as Greek Prime Minister George Papandreou won a parliamentary confidence vote, moving the country a step closer to avoiding a default on its debt. Sony Corp. (6758), Japan’s largest exporter of consumer electronics that gets more than 20 percent of its sales in Europe, rose 2.3 percent in Tokyo. Samsung Electronics Co., which gets a fifth of its revenue from the region, advanced 1.1 percent in Seoul. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, gained 1.8 percent in Sydney, while Rio Tinto Group, the second biggest by sales, climbed 1.9 percent.
Existing-Home Sales in U.S. Fell in May to Six-Month Low, May Be at Bottom (Source: Bloomberg)
Sales of existing U.S. homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, in line with the 4.8 million median estimate in a Bloomberg News survey of economists, data from the National Association of Realtors showed today in Washington. Preliminary figures showing a jump in contract signings suggest May will prove to be the weakest sales month of the year, according to the group’s chief economist.
Fitch Says U.S. ‘Very Likely’ to Resolve Debt Ceiling Limit Before Aug. 2 (Source: Bloomberg)
Fitch Ratings said U.S. lawmakers are “very likely” to raise the debt ceiling limit before Aug. 2, even as it reiterated that failure to do so would result in the country being placed on rating watch negative. “The U.S. Treasury is saying that if the debt ceiling is not raised by Aug. 2, then they can’t guarantee that they will remain current on their obligations,” Andrew Colquhoun, head of Fitch’s Asia-Pacific Sovereigns team, said in an interview in Singapore today. “If the debt ceiling has not been raised by then, then we would put the U.S. sovereign ratings on rating watch negative. We think it’s very likely that the debt ceiling will be raised in good time.”
Bernanke May Try to Spur U.S. Economic Growth by Extending Record Stimulus (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke will probably delay the central bank’s exit from record stimulus, economists said in a survey, giving the flagging economy a boost without resorting to additional asset purchases. Seventy-nine percent of 58 economists expect Bernanke to sustain the Fed balance sheet at current levels until October or later, compared with 52 percent who held that view before the Fed’s last policy meeting in April, according to a Bloomberg News survey conducted last week. Ninety percent of those surveyed predict the Fed will wait until the fourth quarter before dropping its pledge to hold interest rates low for an “extended period.”
Gross Says U.S. Government Should Do More to Foster Job Growth: Tom Keene (Source: Bloomberg)
Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. government must do more to support employment growth. “What we’ve been able to apply in the last 20 years is a financial based employment structure where the magic of finance and asset appreciation” generated jobs, Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “That model no longer applies. We need to go back to the manufacturing roots of this country as opposed to the financial roots.”
U.S. Stock Exchanges Ask SEC to Postpone Market-Access Rules to November (Source: Bloomberg)
The four largest U.S. stock market operators asked the Securities and Exchange Commission to delay implementation of rules governing how brokers send orders to venues, which includes a ban on unsupervised market access given to some high-frequency traders. NYSE Euronext, Nasdaq OMX Group Inc. (NDAQ), Bats Global Markets and Direct Edge Holdings Inc. asked the regulator for an extension until Nov. 30 from the current deadline of July 14, according to a letter dated yesterday obtained by Bloomberg News. The Securities Industry and Financial Markets Association, a trade organization for brokers, banks and asset managers, also asked for an extension for all securities firms in April.
Japanese Stocks Rise for Third Day After Papandreou Wins Confidence Vote (Source: Bloomberg)
Japanese stocks rose for a third day after Greek Prime Minister George Papandreou won a parliamentary confidence vote that moved the country one step further from default. Sony Corp., which gets more than 20 percent of its sales in Europe, climbed 2.4 percent. Toyota Motor Corp. gained 0.3 percent after Deutsche Bank AG. raised its profit estimate for the world’s biggest carmaker. Jtekt Corp., an autoparts maker that had delayed earnings forecasts because of damage from March’s earthquake, advanced 1.9 percent after the company forecast a profit increase.
Inflation in India May Quicken on Deficient Rain (Source: Bloomberg)
Monsoon rain in India will be below normal for the second time in three years, the weather office said, potentially lowering farm output and accelerating inflation which is the highest among Asia’s major economies.
Europe Crisis Threatens Asian Exports (Source: Bloomberg)
Europe’s debt crisis and slowing U.S. growth are damping demand for exports from Asia, giving central banks a reason to slow interest-rate increases even at the risk of seeing inflation undercut domestic spending. India and Thailand’s export growth has slowed, reports showed this month. Chinese overseas shipments may stagnate this summer on “weak” U.S. expansion, Credit Suisse Group AG said.
IMF Warns of ‘Considerable’ Risks in Spain as Debt Crisis Threatens Growth (Source: Bloomberg)
The International Monetary Fund said Spain must step up efforts to reform its economy as Europe’s sovereign debt crisis threatens to damp growth. “The repair of the economy is incomplete and risks are considerable,” the Washington-based IMF said in its annual appraisal of Spain yesterday. There must be “no let up in the reform momentum” to bolster the recovery and reduce a 21 percent unemployment rate that is “unacceptably high,” the fund said.
U.K. Budget Deficit Narrows as Revenue Growth From Taxes Outpaces Spending (Source: Bloomberg)
Britain’s budget deficit narrowed to 17.4 billion pounds ($28.2 billion) in May as a jump in tax receipts outpaced growth in government spending. The shortfall compared with 18.5 billion pounds a year earlier, the Office for National Statistics said in London today. The median of 12 forecasts in a Bloomberg News survey was for a deficit of 17 billion pounds. Revenue rose 8.2 percent, boosted by January’s increase in value-added tax to 20 percent. Spending grew 2.2 percent.
German Investor Confidence Fell More Than Forecast to Two-Year Low in June (Source: Bloomberg)
Investor confidence in Germany, Europe’s largest economy, dropped to the lowest in 2 1/2 years in June as the region’s debt crisis dimmed the economic outlook. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, fell to -9 from 3.1 in May. That’s the lowest since January, 2009. Economists expected a decline to -3, according to the median of 37 estimates in a Bloomberg News survey.
Australia’s Dollar Maintains Advance After Papandreou Wins Confidence Vote (Source: Bloomberg)
Australia’s dollar held onto yesterday’s gain against its U.S. counterpart after the Greek prime minister won a confidence vote to keep his government in power, supporting demand for higher-yielding assets. New Zealand’s dollar maintained yesterday’s 0.3 percent advance versus the greenback on speculation Federal Reserve Chairman Ben S. Bernanke and his fellow policy makers will keep their benchmark interest rate unchanged today, preserving the yield advantage of assets in the smaller country. The so-called kiwi dollar was little changed after a report showed New Zealand’s current-account deficit widened as a share of the economy after tax payments from foreigners fell.
FOREX-Euro rises before Greek vote; gains seen limited
LONDON, June 21 (Reuters) - The euro rose on Tuesday as investors bet Greek Prime Minister George Papandreou would survive a confidence vote crucial in helping the country avert a debt default.
Traders were wary of holding short euro positions going into the parliamentary vote due later in the day, and analysts saw only short-lived boost if it is passed as Greece must also vote on new austerity measures on June 28.
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