DJIA chart reading : correction range bound little downside biased.
Hang Seng chart reading : pullback correction downside biased.
Asian Stocks Drop as Fed Cuts Forecast (Source: Bloomberg)
Asian stocks fell, driving the region’s key index lower for the first day in three, after the U.S. Federal Reserve lowered its growth forecast for the world’s biggest economy and said further stimulus measures are unlikely, fueling global growth concerns. Kyocera Corp., a maker of mobile phones and solar panels that gets more than 20 percent of its sales in the U.S., retreated 1.5 percent in Tokyo. Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, slid 0.6 percent in Sydney. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, dropped 0.5 percent as crude oil and copper prices declined.
Baltic sea index falls for 3rd day, outlook seen weak
LONDON, June 21 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a third session on Tuesday as sluggish cargo business and rising vessel supply weighed on the market.
Brokers said they were looking for signs of a pick up in coal demand from China, facing its worst power shortages in years.
Fed to Maintain Stimulus as Bond Buying Ends (Source: Bloomberg)
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing $600 billion of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said at a press conference after a meeting of the Federal Open Market Committee. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower.
Obama Says 33,000 Troops Can Begin to Leave Afghanistan (Source: Bloomberg)
President Barack Obama said the surge of military force he ordered to Afghanistan in 2009 largely has accomplished its objectives and he’ll pull the 33,000 extra troops from the country by the summer of 2012. With waning public support for the almost 10-year-old war, Obama outlined a plan to withdraw 10,000 troops this year with the rest returning home by September of next year. He reiterated a goal of turning over security for the country to Afghan forces in 2014.
Bernanke Says Low-Rate Extended Period Means at Least Two, Three Meetings (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the “extended period” of very low interest rates means at least two to three central bank policy meetings and could be “significantly longer.” “The thrust of ‘extended period’ is that we believe we’re at least two or three meetings away from taking any further action, and I emphasize ‘at least,’” Bernanke said today at a press conference in Washington.
Greece Impact Small for U.S. Banks: Bernanke (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on U.S. banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments.
Federal Reserve Frets Over Fiscal Recklessness Behind Calm of 0.09% Yield (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke is stepping up his call for the government to rein in the federal deficit -- just not now. The central bank chief and his lieutenants are expressing concern that Congress’s failure to close what Dallas Fed President Richard Fisher called the nation’s “fiscal sinkhole” puts the economy at risk. At the same time, they say that acting too quickly may choke off a recovery hobbled by an unemployment rate above 9 percent. Concern that government spending cuts will inhibit economic growth may prompt the Fed to maintain record stimulus well beyond the completion of its $600 billion bond purchase program this month, said Dean Maki of Barclays Capital. Should the economy weaken further, there’s little more the Fed can do to spur growth and create jobs with interest rates near zero and the balance sheet at a record $2.83 trillion.
China Housing Boom Spreads to Smaller Cities (Source: Bloomberg)
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Standard & Poor’s on June 15 cut its outlook on Chinese developers, echoing concerns of a property bubble aired by bears such as hedge fund manager Jim Chanos.
China June inflation likely to exceed May –NDRC
BEIJING, June 22 (Reuters) - China's annual inflation in June will be higher than May's 34-month high of 5.5 percent before moderating in the second half, the National Development and Reform Commission (NDRC) said on Wednesday.
The top economic planner said government tightening measures to control inflation were gradually taking effect and consumer prices would remain under control this year
Japanese Stocks Swing Between Gains, Loss as Fed Cuts Growth Forecasts (Source: Bloomberg)
Japanese stocks swung between gains and losses after the U.S. Federal Reserve cut its forecast for growth in the world’s biggest economy. Kyocera Corp. (6971), a maker of mobile phones and solar panels that gets more than 20 percent of its sales in the U.S., declined 1.2 percent. Nikon Corp., a camera maker that counts North America as its biggest market, retreated 4.2 percent. Isuzu Motors Ltd. rose 4 percent after forecasting profit growth.
South Korea Won Weakens for First Time in Five Days as Fed Cuts Forecast (Source: Bloomberg)
South Korea’s won weakened for the first time in five days after the Federal Reserve trimmed its economic growth forecast for the U.S., prompting declines in stocks and reducing demand for emerging-market assets. The Fed maintained its vow to keep interest rates low for an “extended period,” predicting the economy will grow as much as 2.9 percent this year, down from April’s forecast of 3.3 percent. Separately, South Korea’s finance regulator plans to tighten rules related to banks’ loan-to-deposit ratios as the government seeks to rein in rising household debt.
Emerging-Market IPOs Slump, Brazil to Russia (Source: Bloomberg)
The emerging-market initial public offering boom, predicted for Brazil, Russia and India, is fizzling as inflation sends interest rates up, share prices down and prompts companies to scale back or cancel sales.
Euro stabilises after Greek vote, Fed eyed
SINGAPORE, June 22 (Reuters) - The euro stabilised on Wednesday and Asian shares rose after the Greek government won a vote of confidence as expected, prompting investors to shift focus to the U.S. Federal Reserve's news conference due later in the day for further cues.
"The market is up on Greece, but it's a temporary rise on a news event. We may see some more short-covering going into the afternoon, but that's about it -- fundamentals haven't changed a notch," said Mitsushige Akino, chief fund manager for Ichiyoshi Investment Management.
Trichet Says Risk Signals ‘Red’ as Debt Crisis Threatens Banks (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. “On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”
Greek govt survives, battles on to avoid bankruptcy
ATHENS, June 22 (Reuters) - Greece's government will approve a new austerity package on Wednesday after it survived a confidence vote that was a crucial hurdle in a battle to avert the euro zone's first sovereign debt default.
Prime Minister George Papandreou's reshuffled cabinet aims to get parliamentary approval for a package of spending cuts, tax hikes and state asset sales by June 28 and implement it by July 3 to secure 12 billion euros ($17 billion) in aid that is vital to avoid bankruptcy.
Greece Vote Turns Spotlight Back on Germany, ECB to See Who Blinks First (Source: Bloomberg)
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a 12 billion-euro ($17 billion) loan payment, which hinges on support from European leaders and on Greece’s ability to push through 78 billion euros in additional budget cuts next week.
Barclays Seeks Dismissal of Lehman $500 Million Claim to Unpaid Bonuses (Source: Bloomberg)
Barclays Plc (BARC), after fending off an $11 billion lawsuit by Lehman Brothers Holdings Inc., asked a judge to dismiss the defunct firm’s remaining claim for $500 million in allegedly unpaid bonuses. Lehman asked U.S. Bankruptcy Judge James Peck in May to order the U.K. bank to pay the rest of the $2 billion in bonuses it agreed to when it bought Lehman’s North American business in 2008. Barclays, which contended the $2 billion was an estimate of both bonuses and severance payments, said it paid everything assented to in the purchase agreement, according to a court filing today.
Australian mining boom meets spending barrier
SYDNEY, June 22 (Reuters) - Australia's road to resource riches is proving bumpier than first thought as miners struggle to meet ambitious investment plans, another reason for the country's central bank to go slow on further interest rate rises.
The Reserve Bank of Australia (RBA) has long assumed that it would have to tighten policy to temper inflationary pressures from a mining boom. But the sector's race to meet red-hot demand in China and India is running into other constraints, from dire weather to a dearth of skilled labour.
Brazil eyes new tax on big mining projects: paper
SAO PAULO, June 21 (Reuters) - Brazil could create a new tax on large mining projects as part of the government's overhaul of the mining code, a local paper reported on Tuesday, a move that would be costly for mining giant Vale .
The mining and finance ministries are considering imposing a so-called "special participation" tax on large mining projects similar to one that already exists in the oil sector for high productivity fields, the Folha de S. Paulo newspaper reported, without naming sources.
New Congo law demands environmental impact studies
KINSHASA, June 21 (Reuters) - Companies working in Democratic Republic of Congo will soon be forced to submit environmental impact reports or be fined, according to a law passed by the country's parliament.
Details of what the law requires still need to be finalised by ministers but the legislation will apply to existing and future projects in sectors ranging from oil and mining to infrastructure, forestry and farming, according to a copy of the law, seen by Reuters on Tuesday.
FOREX-Euro slips as uncertainty persists, Fed in focus
LONDON, June 22 (Reuters) - The euro slipped against the dollar on Wednesday as investors who bought the single currency following a vote of confidence in the Greek government took profits, signalling market concerns that the euro zone debt crisis is far from over.
Sterling also fell, tumbling to $1.6123 against the dollar and failing to gain against a broadly weak euro after Bank of England minutes showed policymakers raised the possibility of future quantitative easing.
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