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FT.com
Nerves are fraying among holders of Treasury bills maturing on August 4, which bondholders fear could be a prime candidate for a default. One trader told the FT he had dumped all his bills maturing on August 4 http://ftalphaville.ft.com/thecut/2011/07/29/637521/short-term-treasury-owners-on-edge-as-yields-rise/
Money market funds continued to pull billions of dollars worth of cash out of the market on Thursday. Nomura says investors took $9bn a day out of money funds this week, while the Investment Company Institute says $62bn has left the funds in the past two weeks http://ftalphaville.ft.com/thecut/2011/07/29/637486/money-markets-repos-suffer/
The United States and North Korea on Thursday began discussions on whether to reopen talks on the latter’s nuclear weapon programme. Two years after the countries’ last diplomatic exchange, the US special envoy for North Korea, http://ftalphaville.ft.com/thecut/2011/07/28/637421/us-and-north-korea-begin-nuclear-talks/
Chinese Premier Wen Jiabao has tried to quell rising public anger by visiting the scene of last weekend’s high-speed rail crash and vowing to “severely punish” those responsible for the accident that killed 39 people and has fuelled concerns about the safety of the country’s bullet train system http://ftalphaville.ft.com/thecut/2011/07/28/637381/china-blames-signalling-error-for-crash/
Credit Suisse will cut 2,000 jobs after becoming the latest bank to announce weak trading in the second quarter, Reuters reports. Net profit fell to SFr 768m ($959m), below the SFr 1bn estimates of analysts and down 52 per cent on the year. Net fixed income sales and trading revenues plunged by 59 per cent, http://ftalphaville.ft.com/thecut/2011/07/28/636986/credit-suisse-trading-revenues-plunge/
Brazil has announced a harsh tax on currency derivatives, sending the Real tumbling against the dollar from its 12-year high, the FT reports. The government’s 1 per cent transactions tax could be increased to up to 25 per cent and carry requirements for both registration of over the counter trades and minimum trading margins, http://ftalphaville.ft.com/thecut/2011/07/28/636971/brazil-clamps-down-on-real-speculation/
The UK’s benchmark borrowing costs have fallen below those of the US for the first time in 15 months as markets continue to fret about the risk of a US default. Yields on 10-year gilts, which move inversely to prices, were at 2.95 per cent at about midday in London on Thursday, two basis points below Treasury yields. Gilt yields were last lower than Treasuries briefly in 2009 and April 2010 and before that throughout most of 2006. http://www.ft.com/intl/cms/s/0/b1916334-b907-11e0-bd87-00144feabdc0.html#axzz1TBR7mQo3
WSJ.com
Asian markets were mixed in choppy trade Friday amid continued concern over the stalled negotiations on raising the U.S. debt ceiling, with a key House vote delayed Thursday night, while key Japanese tech plays dropped on poor earnings reports. Japan’s Nikkei Stock Average edged up 0.1%, Australia’s S&P/ASX 200 was down 0.1%, South Korea’s Kospi Composite fell 0.2% and New Zealand’s NZX-50 tacked on 0.4%. Dow Jones Industrial Average futures were eight points higher in screen trade. http://online.wsj.com/article/SB10001424053111904800304576474993815099076.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
As China criticized U.S. leaders over their debt wrangling, a U.S. official said the U.S. doesn’t see any significant change in the pattern of Chinese bond purchases, reflecting the limited choices Beijing has in managing its money. With over $1 trillion in U.S. Treasurys, China is among those that could be most immediately affected by any U.S. default or downgrading. While Chinese officials talk about diversifying the country’s foreign-exchange reserve holdings of $3.2 trillion, market analysts say China’s options are limited because there are few markets in the world outside the U.S. that are deep or liquid enough to handle China’s massive foreign-exchange purchases. http://online.wsj.com/article/SB10001424053111904888304576473540495283566.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Rising signs of strain emerged across financial markets on Thursday as investors pulled out billions of cash out of money-market funds, in turn driving the funds to rein in lending in short-term markets. Financial markets have become increasingly alarmed at the deepening divide in Washington and the potential that the U.S. could be downgraded by credit-rating agencies or, worse, default on its debt. http://online.wsj.com/article/SB10001424053111903635604576474580203604662.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
The House postponed a Thursday night vote on Speaker John Boehner’s plan to raise the federal borrowing limit after he failed to stem a revolt by conservative GOP members. The delay leaves the credit status of the U.S. government in jeopardy with five days remaining before it begins running out of money to pay all its bills. The development came after a two-hour debate on the bill was abruptly ended earlier in the evening. Mr. Boehner, knowing that a rejection could undermine his speakership, then joined other House GOP leaders in trying to pressure party members to reconsider their opposition.http://online.wsj.com/article/SB10001424053111904800304576474072808358338.html?mod=WSJ_hp_LEFTTopStories
Marketwatch.com
Friday’s report on the pace of economic growth may be so weak as to spur talk of stagflation. Economists polled by MarketWatch expect the economy slowed in the second quarter to a 1.6% annual rate from a already disappointing 1.9% rate in the first three months of the year. Growth is nowhere near the pace that would make a dent in the 9.2% unemployment rate http://www.marketwatch.com/story/whiff-of-stagflation-may-come-in-q2-gdp-report-2011-07-28
Reuters.com
Gold held steady on Friday, heading for its fourth straight week of gains, as investors watched U.S. debt ceiling talks after Republicans delayed a vote on the debt plan. Spot gold was flat at $1,615.99 an ounce by 0346 GMT, on course for a weekly rise of 1.2 percent. It was headed for a monthly gain of nearly 8 percent, its second best month of this year after April. U.S. gold edged up 0.2 percent to $1,615.90. http://www.reuters.com/article/2011/07/29/us-markets-precious-idUSTRE7592IU20110729
Oil was heading on Friday for its first rise in three months as investors focused on forecasts of improved demand despite jitters over an elusive debt deal in the United States to avert a default and a credit downgrade. Brent crude for September rose 6 cents to $117.42 a barrel by 0151 GMT after closing down 7 cents at $117.36 a barrel on Thursday. U.S. crude for September was down 24 cents at $97.20 a barrel, but was on track to rise 1.8 percent on the month, its first increase in three months. http://www.reuters.com/article/2011/07/29/us-markets-oil-idUSTRE7592LE20110729
The number of Americans claiming new jobless benefits hit a three-month low last week and contracts to buy existing homes rose in June, hopeful signs for an economy that has struggled to regain momentum. Initial claims for state unemployment benefits dropped 24,000 to 398,000, the Labor Department said on Thursday, below economists’ expectations for a fall to 415,000. A separate report from the National Association of Realtors showed pending home sales rose 2.4 percent in June, the second straight monthly increase. Contracts usually lead sales by a month or two.http://www.reuters.com/article/2011/07/28/us-usa-economy-idUSTRE7662I420110728
Exxon Mobil Corp reported a higher quarterly profit that missed Wall Street estimates as maintenance slowed its international refining and production, and its shares closed down 2 percent. Some of Exxon’s refineries in Asia-Pacific and its international oil and natural gas production — including from its liquefied natural gas project in Qatar — were affected by downtime, the world’s largest publicly traded oil company said. http://www.reuters.com/article/2011/07/28/us-exxonmobil-idUSTRE76R2OT20110728
Banking group HSBC Holdings Plc may cut more than 10,000 jobs as part of its plan to slash costs by up to $3.5 billion a year, Sky News reported Thursday. New HSBC Chief Executive Stuart Gulliver in May announced a far-reaching plan to cut costs and revive flagging profits by exiting dozens of countries and refocusing on its areas of strength. http://www.reuters.com/article/2011/07/28/us-hsbc-idUSTRE76R0L620110728
Bloomberg.com
China should buy U.S. stocks instead of Treasuries as they may be safer investments amid concerns about a U.S. debt default or credit-rating downgrades, according to Andy Xie, an independent economist. “The U.S. stock market can be a credible alternative,” Xie, 50, formerly Morgan Stanley’s chief Asia economist in Hong Kong, said in an interview in Bloomberg’s Shanghai office yesterday. “U.S. companies are reporting strong earnings and they are selling a lot to emerging markets. Even though U.S. stocks aren’t cheap by historical standards, they are a better investment relative to Treasuries.” http://www.bloomberg.com/news/2011-07-29/china-should-favor-u-s-stocks-over-treasuries-as-default-looms-xie-says.html
Demand for physical gold in China may exceed consumption in India by the end of this year, said Chuck Jeannes, chief executive officer of Goldcorp Inc. (G), the world’s No. 2 producer of the metal by market value. “Three or four years ago there was no one who would have expected Chinese physical demand for gold to surpass India,” Jeannes said yesterday in a telephone interview from New York. “Now it looks like that could happen as early as the end of this year. And that’s while Indian demand is increasing.” http://www.bloomberg.com/news/2011-07-28/goldcorp-ceo-sees-gold-price-at-1-700-an-ounce-by-end-of-year.html
Japan’s industrial production rose less than expected as companies from Nissan Motor Co. to Toyota Motor Corp. warned that a yen close to a post World War II high threatens to drag down exports. Factory output increased 3.9 percent in June from May, when it rose 6.2 percent, the biggest gain since 1953, the Trade Ministry said in Tokyo today. The median estimate of 31 economists surveyed by Bloomberg News was for a 4.5 percent gain. http://www.bloomberg.com/news/2011-07-29/japan-s-june-industrial-output-expands-less-than-forecast-3-9-from-may.html
The world’s 7-billionth person will be born Oct. 31 in India, according to a projection by researchers working with data from the United Nations. Medical advances, more effective vaccines, antibiotics and improvements in public-health conditions has boosted life expectancy in developing countries, where most of the population growth is taking place, according to the UN data reported tomorrow in the journal Science. The number of people globally reached 1 billion in 1800, then 2 billion in 1925, the report said. Within the last half century, the population boomed to just under 7 billion from 3 billion. By 2050, the population will reach 9.3 billion, and 97 percent of the growth will be in less developed regions, http://www.bloomberg.com/news/2011-07-28/world-population-hits-7-billion-after-boom-in-developing-world.html
CNBC.com
In the very unlikely event that the United States defaults on its debt obligations, the country’s economy would contract by 5 percent and stocks would fall by nearly a third, according to Credit Suisse. While Andrew Garthwaite and the global strategy team at the Swiss bank see a 50-50 chance of a ratings downgrade of U.S. debt by the major ratings agencies, they remain confident such an outcome would not lead to disaster. “We think there is a 50 percent chance of a ratings downgrade on U.S. sovereign debt. http://www.cnbc.com/id/43907446
NYTimes.com
Underwhelming earnings reports Thursday from several of Germany’s largest companies, along with a report showing a slump in confidence among European business and consumers, raised concerns that growth could be slowing even in the Continent’s strongest economies. Meanwhile, the European Union’s economic sentiment indicator fell by 2.2 points to 103.2 in the euro area, as both business people and consumers became less optimistic about their prospects. The reading, the lowest in almost a year, indicates that growth is likely to continue, but at a slower pace. http://www.nytimes.com/2011/07/29/business/global/reports-heighten-concerns-about-german-economy.html?_r=1&ref=global
Foxbusiness.com
Japan’s jobless rate ticked higher in June, while consumer prices rose slightly slower than expected. The seasonally adjusted June unemployment rate was 4.6%, the Ministry of Internal Affairs said Friday. The reading was up from May’s 4.5%, with economists surveyed by Dow Jones Newswires having expected on average that the rate to hold steady. As in recent months, the data excluded three prefectures worst-hit by the March 11 earthquake and tsunami. The June core consumer price index, which excludes volatile fresh food prices, was 0.4% higher than in June 2010, easing from May’s 0.6% rise, though the index was down 0.2% on a month-on-month basis. http://www.foxbusiness.com/2011/07/28/japans-jobless-rate-edges-higher-in-june-to-46/#ixzz1TT4bVn00
Washingtonpost.com
Oil & Natural Gas Corp., India’s biggest energy explorer, is betting higher local fuel prices will reduce discounts given to state-run refiners and help to boost profit. The company’s subsidy bill has dropped by about 500 million rupees ($11.3 million) daily after the government raised fuel prices and cut taxes on crude last month, Finance Directo r D.K. Sarraf said yesterday after ONGC posted first-quarter earnings that missed analyst estimates. “The positive impact of higher fuel prices will be felt from this quarter,” said Arindam Pal, a Mumbai-based senior research analyst at Asian Market Securities Pvt. “The impact could increase ONGC’s oil selling price about 10 percent.” http://washpost.bloomberg.com/story?docId=1376-LOZP7I0D9L3501-4VDT1I2L3KF1QIJ4HSS2UD1DOS
USAtoday.com
The number of Americans who signed contracts to buy homes rose for a second month in June. But the gain was not enough to signal a rebound in the weak housing market. The National Association of Realtors reported Wednesday that its index of sales agreements for previously occupied homes rose 2.4% in June to a reading of 90.9. A reading of 100 is considered healthy by economists. The last time the index reached that level was in April 2010, the final month when buyers could qualify for a federal tax credit. http://www.usatoday.com/money/economy/housing/2011-07-28-home-sales-june_n.htm
Most of the nation’s largest metropolitan areas are seeing a sharp drop in foreclosure activity as banks take longer to move against homeowners who are behind on their mortgage payments. In the first half of this year, 84% of metropolitan areas with a population of at least 200,000 saw their foreclosure rate drop versus the same period last year, foreclosure listing firm RealtyTrac said Thursday.http://www.usatoday.com/money/economy/housing/2011-07-28-foreclosure-rates_n.htm
Telegraph.co.uk
A chorus of global banks has warned that Washington risks triggering a global slump and may suffer permanent loss of credibility by flirting with default on America’s $14.3 trillion (£8.8 trillion) federal debt. http://www.telegraph.co.uk/finance/financialcrisis/8669352/Global-slump-warnings-if-US-triggers-insane-default.html
The Italian government was forced to pay the highest borrowing costs for 11 years in a bond auction that underscored market fears that a new phase of the European debt crisis is set to be unleashed.http://www.telegraph.co.uk/finance/financialcrisis/8667986/Eurozone-crisis-fears-continue-as-Italy-forced-to-pay-higher-rates-to-borrow.html
July has been the toughest month of trading faced by retailers in more than a year, according to the Confederation of British Industry (CBI), as worried consumers baulked at rising prices. Just one in three retailers (33pc) polled in the weeks to mid-July said sales volumes were up on a year ago, with more (38pc) reporting a fall. The resulting negative balance of minus 5pc was the worst seen since June 2010.http://www.telegraph.co.uk/finance/economics/8668781/July-is-cruellest-month-for-UK-retailers.html
Largely invisible on a radar screen dominated by concerns over the US and eurozone debt crises, the Chinese economic miracle, one of the few apparent bright spots that remains in a world beset by trouble, has in recent weeks also been showing unnerving signs of strain. Indeed, it may even be about to come off the rails entirely – quite literally. http://www.telegraph.co.uk/finance/comment/jeremy-warner/8669207/Chinas-economic-miracle-may-be-about-to-come-off-the-rails.html
Guardian.co.uk
Consumer confidence took a dive last month, taking the GfK NOP poll to -30 and erasing a bounce in May for the Royal Wedding. The survey found that people held largely negative views on the general economic situation and their own personal finances in July, adding to a renewed sense of gloom in the June poll. http://www.guardian.co.uk/business/2011/jul/29/uk-economic-gloom-in-june
Smh.com.au
Economists are lining up to make their call on whether the Reserve Bank will hike official cash rates at its board meeting next week, even amid signs that businesses and households are cutting back on borrowing. Any 25 basis point hike at its Tuesday meeting could see mortgage rates offered by some big banks push above the 8 per cent mark. This would be the highest level since November 2008.http://www.smh.com.au/business/interest-rates-will-they-or-wont-they-20110729-1i3es.html#ixzz1TT7YxnKg
Home values continued to drop in June as consumers worried about rising interest rates and the state of the global economy. RP Data-Rismark Hedonic’s latest home value index for capital cities fell by 0.2 per cent in June, the sixth straight monthly fall in capital city home values. Homes in Sydney dropped 0.2 per cent in June, but posted a 0.5 per cent gain for the 12 months to the end of June, while houses in Melbourne dipped 0.1 per cent for the month, pushing the decline for the year ended June 30 to 2 per cent. http://www.smh.com.au/business/house-prices-post-sixth-straight-monthly-fall-20110729-1i35g.html#ixzz1TT7dCtUO
Greek officials have launched talks with international bankers on the details of a complex plan to restructure the loan-dependent country’s privately held debt under a new bailout deal. Finance Minister Evangelos Venizelos said the Athens negotiations started “in a most encouraging manner”. “We have started (the talks) and will conclude very soon because we face specific bonds maturing in August and September and want either to have finished before that or to have formulated a transitional framework until we have finished,” Venizelos told parliament. http://www.smh.com.au/business/world-business/greece-launches-debt-restructure-talks-20110729-1i2wh.html#ixzz1TT7izWSH
Theglobeandmail.com
Moody’s Investors Service Inc. has renewed Canada’s triple-A credit rating, citing the factors that helped the country emerge from the global financial crisis relatively unscathed, such as its “economic resiliency, very high government financial strength, and a low susceptibility to event risk. http://www.theglobeandmail.com/report-on-business/economy/moodys-renews-canadas-triple-a-credit-rating/article2112783/
Xinhuanet.com
Economic and social experts predict that the Indonesian economy would be able to equal those of Asian giants Japan and South Korea in the next 20 years if its current political and financial stability continued, local media reported on Friday. Noted American political scientist George Friedman said on Thursday that Indonesia had a unique place as an emerging economy with a huge market potential for international companies. “As countries like the Philippines and others have trouble accommodating investments, Indonesia has become a stable platform for international corporations to grow,” Friedman said at an international conference on futurology held here. http://news.xinhuanet.com/english2010/business/2011-07/29/c_131017579.htm
The Asian Development Bank (ADB) maintained its five percent growth forecast for the Philippines this year on back of slower demand for its export products as well as higher commodity prices. In its latest Asia Economic Monitor released Thursday, the Manila-based lender said the Philippines, along with Thailand and Malaysia will see economic growth taper off this yearhttp://news.xinhuanet.com/english2010/business/2011-07/28/c_131015944.htm
Cs.com.cn
China`s provincial government had released the data of Gross Domestic Product (GDP) by the date of July 27. There are only two municipalities like Beijing and Shanghai, which reports GDP rise less than 9.6 percent among the 31 provinces. Economists said, the GDP summation of the 31 provinces shows 2 trillion yuan higher than the data presented by the National Bureau of Statistics of China. It shows that most provinces still pay much attention to the data of GDP, and investment is the main measure for the provincial governments to drive the economy development. http://www.cs.com.cn/english/ei/201107/t20110729_2985533.html
China`s inflation are affected by various factors and the mounting-up of foreign exchange reserve is not directive or main dynamic to the rising of inflation, the State Administration of Foreign Exchange (SAFE) said on Thursday. The SAFE said the rapid build-up of China’s reserves, the world’s largest that swelled by $152.8 billion in the second quarter, was “not a direct” cause of inflation, which hit a three-year high of 6.4 percent in June. http://www.cs.com.cn/english/ei/201107/t20110729_2985532.html
Economictimes.com
The Indianmedia and entertainment industry is expected to grow at a compounded annual growth rate of 13.2% to reach a size of Rs 1.19 lakh crore by 2015, said consulting firmPricewaterhouseCoopers (PwC) in a media outlook report released on Thursday. The Indian industry grew by 11.2%, one of the highest growth rates in the world, in 2010 on the back of improved economic conditions and rebound in advertising. http://economictimes.indiatimes.com/news/news-by-industry/media/entertainment-/media/indian-media-and-entertainment-industry-to-grow-at-over-13-pwc/articleshow/9403557.cms
Monsoon slipped into the worry zone with vast regions getting deficientrainfall in the week to July 27, a period which is crucial withKharif sowing peaking in many parts of the country. The drop in the rainfall during the week widened the deficit for the entire monsoon season (June-September) to 4% below normal, from 1% below normal at the beginning of the week. About 155 lakh hectare of paddy had been sown by July 22, which is less than half the acreage last year. The deficient rainfall in the peak sowing time can affect farm performance. http://economictimes.indiatimes.com/news/economy/agriculture/deficit-in-rainfall-rises-to-4-fuels-kharif-sowing-fears/articleshow/9402534.cms
Yohnapnews.co.kr
South Korean banks’ lending rates climbed in June from a month earlier due mainly to the rising costs of corporate lending, the central bank said Friday. The average rate for new loans extended to households and companies stood at 5.8 percent in June, up 0.04 percentage point from the previous month, according to the Bank of Korea (BOK). The June rate marked the second straight monthly gain. According to the BOK, the average rate for household loans slipped 0.02 percentage point, while the rate for corporate loans jumped 0.06 percentage point.http://english.yonhapnews.co.kr/business/2011/07/29/55/0503000000AEN20110729003500320F.HTML
TheMoscowTimes.com
President Dmitry Medvedev‘s exit from the Kremlin would trigger a share sell-off as well as accelerated capital flight and emigration, a presidential adviser said. If Medvedev isn’t able to run for a second term next March, the July 2008 decline in Russian stock prices after Prime Minister Vladimir Putin publicly attacked coal miner Mechel will seem like a “minor event,” Igor Yurgens, who heads a research institute set up by Medvedev, said in a co-authored commentary published Wednesday in Vedomosti. “That will be in addi tion to a rapid acceleration in already serious capital flight and emigration from Russia.” Putin rebuked Mechel owner Igor Zyuzin at a metals-industry meeting July 24, 2008. Russia’s benchmark MICEX share index fell 5.5 percent during the next trading session, while Mechel’s stock lost 50 percent of its value over a one-week period that month. http://www.themoscowtimes.com/business/article/yurgens-sees-fallout-from-the-election/441305.html#ixzz1TTAeGvAg
