Federal debt talks remained at a stalemate Thursday as both sides continued their week-long battle of blaming each other for the stymied negotiations to allow the Treasury to continue borrowing money to finance government operations.
George Papandreou, Greece PM, on Thursday secured approval for fast track implementation of €28bn ($40.6bn) in tax increases and spending cuts demanded by the EU and IMF.
US: Minnesota Govt shuts down as talks fail to bridge deficit.
China: HSBC June PMI at 50.1 vs 51.6 in May (28th Month Low).
The sexual assault case against Dominique Strauss-Kahn, former IMF head, is on the verge of collapse, the NY Times reports. Investigators have uncovered major holes in the credibility of the housekeeper.
EUROPEAN:
Greece has cleared the way for fresh international financial aid to avert a damaging default after its government won a second, decisive parliamentary vote on implementing sweeping austerity measures.
Italy’s cabinet approved on Thursday an austerity package aimed at shielding the country from the Greek debt crisis and eliminating the budget deficit in 2014. The package, worth 47 billion euros ($67 billion), must now be approved by parliament within 60 days
Germany’s major banks agreed to reinvest the proceeds of some of their maturing Greek bonds, removing another hurdle toward a broader agreement on a new aid package for Athens. The German banks said they would accept new notes with longer maturities for bonds that currently fall due by 2014, a deal that will affect some €3.2 billion ($4.6 billion) in private and publicly held debt. The full details of the arrangement have yet to be decided. – WSJ
A disorderly Greek debt default is likely to trigger severe financial market volatility and a broad re-pricing of other euro zone sovereign debt, ratings agency Fitch said
Ireland: Bank loans to Irish consumers were 4.8% lower last month compared with 4.6% in April, according to new Central Bank figures, the Irish Independent says. Mortgage lending fell by 2.1pc while other lending dropped by 13.6%, the paper adds.
US:
The Obama administration believes congressional leaders must agree to a deficit-reduction deal by July 22 in order to raise the government’s borrowing limit in time to avoid a default in early August.
U.S. Treasury Secretary Timothy Geithner is considering stepping down later this year, but will not make a decision until contentious negotiations over the U.S. debt ceiling are completed, people familiar with his thinking said on Thursday
US Geithner: Says congress will raise debt ceiling. Interest rates rise if no raised debt ceiling
Fed Bullard: If the economy’s not performing well, then the committee should consider taking additional action. Says Fed’s balance sheet could pose “inflation risk”. Adds that expects economy to “strengthen”
US caught China buying more treasuries than disclosed
US: Minnesota Govt shuts down as talks fail to bridge deficit
ASIA:
The BoJ June Tankan corporate sentiment survey supports the BOJ’s view on an economic recovery and confirms that BOJ policymakers do not need to worry about imminent downside risks to Japan’s economy.
Japan: The average national price of land, mostly for residential uses, fell 3.1% on year at the start of 2011, with the pace of decline slowing from -4.4% in 2010, the National Tax Agency said.
yearly fall, following -4.6% in 2010 and -3.5% in 2009.
Japan: June Tankan survey from the Bank of Japan (1):
— BOJ June Tankan Large Manufacturer Index -9 Vs Mar +6
— BOJ June Tankan Large Manufacture Index MNI Poll Median Forecast -7
The PBoC will be more cautious in adjusting the bank deposit reserve requirement but may raise rates soon, the official China Securities Journal said.
The PBoC sets the yuan central parity rate at Cny6.4685 against the dollar today, compared with Cny6.4716 set for the previous trading day.
China: HSBC June PMI at 50.1 vs 51.6 in May
Thailand risks slipping into a fiscal crisis as in Western economies, eroding consumer power if the new government substantially expands fiscal spending as many parties are promising, Bank of Thailand governor Prasarn Trairatvorakul said/
The Singapore Exchange (SGX) will begin all-day stock trading from August 1, dropping its usual 90-minute lunch break.
The strong Singapore economy and tightening labor market raised workers’ wages last year. The Ministry of Manpower said total wages (comprising basic wages and bonuses) in the private sector grew by 5.5%, after contracting by 0.4% in 2009.
Bank Indonesia has warned the government of a possible financial crisis induced by swelling foreign debts, most of which were the government’s.
India: The HSBC Markit Purchasing Managers’ Index based on a survey of around 500 companies, showed a sharp fall to 55.3 in June from 57.5 in May, its lowest level since September last year and the steepest monthly fall since November 2008.
Indian fuel inflation hit an eight-week high in mid-June, showing price pressures persisted even before the government’s recent increase in diesel prices and suggesting headline inflation in Asia’s third-largest economy is headed back towards double-digits even as growth slows
New BoJ board member Kouji Ishida voiced caution over growing uncertainties surrounding overseas economies, suggesting he will side with the central bank’s ultra-easy monetary policy bias to support Japan’s fragile economic recovery
India’s key monsoon rains were 10 percent above normal in the past week to June 29, slowing from 23 percent above average the previous week, the weather office said on Thursday, and could slow further next week, a source in the weather office said.
Fraud has hit more than one-in-five companies in Singapore, suggesting that the attitude towards security may be lax, Channel NewsAsia reports citing a study by global consultancy firm KPMG.
Thailand’s army chief Prayuth Chan-ocha has denied rumours the military will stage a coup if the opposition Pheu Thai Party wins the election and forms a coalition government.
CORPORATE:
Department store Debenhams has reported roaring trade in its beauty halls as women cheer themselves up with a new lipstick or bottle of perfume, the Guardian says.
Citigroup has entered into exclusive talks with one bidding group for the long-delayed sale of its OneMain consumer financial services business formerly known as CitiFinancial.
Weber to be nominated to UBS board, to succeed current chairman in 2013
OVERNIGHT DATA:
China: HSBC June PMI at 50.1 vs 51.6 in May
Japan: June Tankan survey from the Bank of Japan (1):
— BOJ June Tankan Large Manufacturer Index -9 Vs Mar +6
— BOJ June Tankan Large Manufacture Index MNI Poll Median Forecast -7
Japan: Dat from the Ministry of Internal Affairs and Comms:
— Japan May Core CPI +0.6% Y/Y, 2nd Rise In Row; Apr +0.6%
— Japan Apr Core CPI MNI Survey Median Forecast: +0.5% Y/Y
Australia: Manufacturing activity in Australia rebounded strongly in June to move into the expansion territory for the first time in four months, and rise to the highest level since July 2010. The Australian Industry Group-PwC Performance of Manufacturing Index rose 5.2 points to 52.9 in June.
more moderate pace.
Indonisia: June CPI up 5.54% y/y compared with +5.98% in May, data from the statistics bureau showed.
South Korea: Consumer prices rose at a faster pace in June, raising concerns that inflationary pressure is mounting despite the government’s price stability efforts, Yonhap News reports. According to Statistics Korea, the country’s consumer price index rose 4.4% in June from a year earlier, quickening from the previous month’s 4.1% gain.
South Korea: The trade surplus widened in June from the previous month, though imports continued to grow at a much faster rate than exports.
OTHER MARKETS:
STOCKS: Dow and Nasdaq held gains all day with only slight deflation in afternoon dealings which were quickly recovered. Dow added 152.92 points or 1.25% to end at 12,414 while Nasdaq was up 33.03 points or 1.21% to end at 2,773. Globex traded US index futures are trading modestly lower across the board in Asia, giving up some of the overnight gains. The S&P Sep contract was last down 2.3 points at 1313.2. Japan’s benchmark stock indices are higher Friday, extending the week’s gains. The benchmark Nikkei 225 was last ahead by 52.2 points, or 0.53%, at 9867.98. The broader-based TOPIX was ahead by 5.34 points, or 0.63%, at 854.56. The Hong Kong Stock Exchange is closed Friday for a national holiday and will reopen on Monday. The Shanghai Composite Index ends the morning session up 0.38% at 2772.68.
TSYS: The yield on the benchmark 2Y was last at 0.45%, with the 5Y at 1.75%, the 10Y at 3.15% and the Bond at 4.36%.
Commodities: Crude futures are lower in Asian trade Friday, dipping below the $95 level. The front-month Nymex contract was last down 73 cents at $94.69 – close to the session lows. The August Brent/WTI spread was last at $17.00. Gold is currently trading $1500 with SIler at $34.50