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Ft.com
Greece is heading for a clash with international lenders as the radical leftwing party that came second in the weekend’s election called for the ripping up of a “barbarous” austerity programme underpinning its bailout and questions mounted about the country’s future inside the euro. Alexis Tsipras, the 38-year-old leader of the Syriza party that surged in popularity in Sunday’s poll, outlined a five-point plan to be put to conservative and socialist leaders on Wednesday as he attempts to build a coalition, demanding the reversal of fiscal and structural measures that have enabled Greece to slash its budget deficit.http://www.ft.com/intl/cms/s/0/bd6fda08-9923-11e1-9a57-00144feabdc0.html#axzz1uLPdT7A5
Greek stocks have fallen more than 10 per cent and government bond yields have jumped more than 200 basis points in the space of two days. The markets, say analysts, are gearing up for a Greek exit from the euro. Investors and strategists warn that the failure of the Greeks to deliver a majority government in parliamentary elections at the weekend has raised the stakes over the country’s future and revived fears that Athens will leave the single currency. http://www.ft.com/intl/cms/s/0/8fe50176-990f-11e1-9da3-00144feabdc0.html#axzz1uLPdT7A5
When Mario Draghi called a couple of weeks ago for a growth pact to match the European Union’s fiscal austerity drive, François Hollande, now France’s president-elect, could barely contain his delight. Locked in his battle for the Elysée palace with Nicolas Sarkozy, the socialist leader wasted no time in pointing out that his demand for Europe to shift the emphasis from austerity to growth was being echoed at the European Central Bank, an institution that embodies the stern doctrine of fiscal rectitude. http://www.ft.com/intl/cms/s/0/53f19eb6-990c-11e1-9da3-00144feabdc0.html#axzz1uLPdT7A5
MasterCard, the payments processing network, unveiled new digital wallet services designed to enable banks and retailers to take advantage of anticipated growth in electronic payments. Under the name PayPass, MasterCard is creating a unified network that will enable merchants to accept digital payments made by consumers either electronically in stores or online using a smartphone, computer or tablet.http://www.ft.com/intl/cms/s/0/043db8d0-9927-11e1-9a57-00144feabdc0.html#axzz1uLPdT7A5
Thetrader.se
Why shorting Italian and Spanish bonds is the right trade. http://www.thetrader.se/2012/05/09/why-shorting-spanish-and-italian-bonds-is-the-right-trade/
Wsj.com
Asian markets fell Wednesday and the euro slipped below $1.30 as failed coalition talks in Greece stoked fresh concerns about the fragility of Europe’s monetary union. Singapore’s Straits Times Index declined 0.8%, Hong Kong’s Hang Seng Index fell 0.8% and the China Shanghai SE Composite slipped 1.1%. The yen was trading flat against the dollar at 79.865. Australia’s index was lower as the government presented its federal budget. Aiming for a surplus before a general election next year, the government scaled back defense spending and abandoned a planned corporate-tax cut.http://online.wsj.com/article/SB10001424052702304363104577392933327688416.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
A U.S. special envoy will visit India next week to assess the country’s capability to shift crude imports from Iranto other suppliers, an evaluation that will help determine what New Delhi needs to do to head off U.S. sanctions that are set to come into effect next month. After a three-day India visit that included meetings with Prime Minister Manmohan Singh and other top officials, Secretary of State Hillary Clinton said she was encouraged by the steps India has already taken to reduce Iran imports. But she pressed Indian officials to do more, saying the cutbacks would help international efforts to persuade Iran to abandon its nuclear ambitions. http://online.wsj.com/article/SB10001424052702304363104577391612085409538.html?mod=WSJASIA_hpp_LEFTTopWhatNews
The supposed bomber at the center of a foiled plot to bring down a jetliner was actually a double agent who funneled vital information to U.S. and Arab intelligence agencies, according to officials, marking an apparently successful infiltration of al Qaeda’s most dangerous branch. The revelation came a day after U.S. officials said the Central Intelligence Agency, working with foreign security services and other agencies, had thwarted a bomb plot by al Qaeda’s Yemeni branch aimed at bringing down a U.S. jetliner with a more advanced version of an underwear bomb used in a failed 2009 Christmas Day attempt. http://online.wsj.com/article/SB10001424052702304451104577392011286050758.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
HSBC Holdings PLC’s investment-banking division and emerging-market operations helped boost profit in the first quarter, but the bank’s costs remained stubbornly high as wages in fast-growing markets continued to increase. The London-based lender posted a net profit of $2.58 billion, down 38% from a profit of $4.15 billion in the same quarter a year earlier. The decline was partly due to an accounting charge on the value of the bank’s debt. Excluding this charge and the effects of acquisitions and sales, profit before tax rose 25% to $6.78 billion from $5.41 billion a year earlier, the bank said, illustrating its http://online.wsj.com/article/SB10001424052702304363104577391463124428698.html?mod=WSJASIA_hpp_LEFTTopWhatNews
OPEC is regaining its clout by successfully weighing in to talk down oil prices. Suggestions Tuesday by the Saudi oil minister, Ali Naimi, that prices were still too high and that OPEC might discuss a higher production ceiling at its next meeting in June helped prices slide further. Mr. Naimi’s price comments echoed the head of the Organization of Petroleum Exporting Countries, who last Thursday spoke against high prices for oil futures http://online.wsj.com/article/SB10001424052702304451104577392011286050758.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
U.S. job openings rose in March, a sign that employers gained confidence heading into the spring. The nation had 3.74 million job vacancies at the end of March, about 5% higher than February and the highest level since July 2008, the Labor Department said Tuesday. The rise was driven in http://online.wsj.com/article/SB10001424052702303630404577392370619285832.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Mexico’s Carlos Slim made his first big move on Europe, offering $3.4 billion to raise his stake in ailing Dutch phone company Royal KPN NV. The bid sparked speculation that the world’s richest man could embark on a reverse conquest of Europe, snapping up assets that have been hammered by its financial crisis and taking on long-time Spanish rival Telefónica SA in its own backyard. Mr. Slim’s América Móvil SAB, the largest wireless company in Latin America, laid out an offer late on Monday to boost its holding in the former Dutch monopoly to 28% from 4.8%, offering €8 ($10.44)http://online.wsj.com/article/SB10001424052702304363104577391712958166238.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Clogged mortgage pipelines have created headaches for hundreds of thousands of Americans trying to take advantage of low mortgage rates, which averaged 4.05% for the week ending April 27, according to the Mortgage Bankers Association. Those rates have helped thousands of Americans free up cash or retire debt. On average, borrowers that refinanced during the first quarter of 2012 reduced their first-year interest payments by $2,900, according to mortgage-finance giant Freddie Mac. Overall, refinancing over the past three years has unlocked savings worth $46 billion in their first year, according to Moody’s Analytics. http://online.wsj.com/article/SB10001424052702303459004577364102737025584.html?mod=WSJEurope_hpp_LEFTTopStories
Marketwatch.com
Political wrangling within China’s Communist Party could force a delay in 18th Party Congress, charged with picking the nation’s next leaders, according to a Reuters report Wednesday. The report cited unnamed sources as saying party officials were seriously considering a delay of up to a few months for the gathering — held every five years — as the party prepares for a leadership transition this autumn.http://www.marketwatch.com/story/china-may-delay-big-political-meeting-report-2012-05-08?link=MW_home_latest_news
Australia’s government stuck to its promise of returning the country to surplus as it set out its new annual spending plan late Tuesday, with strategists saying that holding to that target will likely provide some support for the country’s bonds and currency. Prime Minister Julia Gillard’s Labor government projected a surplus of 1.5 billion Australian dollars ($1.52 billion) in the fiscal year beginning this July, while at the same time raising the projected deficit for the current fiscal year to A$44 billion, up from A$37 billion. The swing from deficit to surplus will be achieved by spending cuts or by delaying and revising projects, rather than any change to growth forecasts, the government said. http://www.marketwatch.com/story/australia-budget-seen-boosting-dollar-bonds-2012-05-08
Reuters.com
Gold dropped to a four-month low on Wednesday, pressured by a weaker euro as investors fretted about the political upheavals in Greece that threaten to sink the country into chaos and endanger the euro zone’s efforts to end the debt crisis. Spot gold lost more than 1 percent to a four-month low of $1,586.74 an ounce, extending a 2-percent slide from the previous session. It stood at $1,588.64 by 00:13 EDT (0413 GMT). U.S. gold also dropped to a four-month trough, at $1, 589.50. http://www.reuters.com/article/2012/05/09/us-markets-precious-idUSBRE8390RW20120509
Brent crude slipped towards $112 on Wednesday, maintaining its downtrend for a sixth session, as political uncertainty in the debt-laden euro zone and rising oil stocks in the United States revived worries about fuel demand. Brent crude fell 46 cents to $112.27 a barrel by 23:22 p.m. EDT (0322 GMT) after settling at $112.73 on Tuesday, the lowest settlement for a front-month contract since February 2.http://www.reuters.com/article/2012/05/09/us-markets-oil-idUSBRE83H17O20120509
Bloomberg.com
India, the largest rice grower after China, is set to surpass Thailand to match Vietnam as the world’s biggest shipper after favorable weather and higher government prices boosted the harvest to a record. Exports may climb to 7 million metric tons in the year ending Aug. 31, said Samarendu Mohanty, a senior economist at the International Rice Research Institute. That’s more than double the 2.8 million tons shipped in 2010-2011, according to the U.S. Department of Agriculture. Vietnam will export 7 million tons and Thailand 6.5 million tons, USDA data show. http://www.bloomberg.com/news/2012-05-09/india-set-to-pass-thailand-rival-vietnam-as-top-rice-exporter.html
Bill Gross at Pacific Investment Management Co. and Jan Hatzius at Goldman Sachs Group Inc. (GS) say investors should prepare for additional bond purchases by the Federal Reserve, known as QE3, to combat a slowing U.S. economy. A decision to buy more debt is “getting closer,” Gross, who runs the world’s largest mutual fund, wrote on Twitter yesterday. Hatzius, the chief economist at New York-based Goldman Sachs, predicted in a report the same day that the Fed will announce additional monetary easing when it meets in June. http://www.bloomberg.com/news/2012-05-09/gross-says-qe3-getting-closer-as-goldman-sees-easing.html
A Ferrari SpA dealership employee took a spin on Nanjing’s 600-year-old city wall, leaving tire marks on the Chinese relic and prompting an apology from the automaker. The Ferrari dealer had rented a gate along the state- protected cultural property encircling the former imperial capital for a May 7 showing of the limited edition Ferrari 458 Italia, according to the official Xinhua News Agency and videos on youku.com. The car was lifted by crane onto the wall the night before the show, then a driver gunned the engine and performed an unauthorized donut spin that left tread marks, according to Xinhua and youku.com videos, which didn’t identify the driver by name. A news clip showed workers attempting to remove the marks with a mop. http://www.bloomberg.com/news/2012-05-09/ferrari-joy-rider-burns-rubber-on-600-year-old-wall.html
Cnbc.com
Noted market bear Nouriel Roubini has called the ongoing political turmoil in Europe a “slow motion train wreck.” Speaking to CNBC in Las Vegas on Tuesday, Roubini said he expects Greece to leave the euro zone by next year. Roubini’s comments come after Greek voters rejected pro-bailout parties in Sunday’s elections, raising the likelihood a new government will seek to restructure its debts and renege on the terms of its last bailout. Alexis Tsipras, the leader of the Coalition of the Radical Left, a party which made big gains at the polls and came in second, has called the austerity measures agreed to by the previous government a “disaster.” http://www.cnbc.com/id/47348468
House Speaker John Boehner told CNBC on Tuesday he would like to see a top tax rate of 25 percent, and he warned that the United States had no alternative but to reduce its $16 trillion debt. “I think our tax code gets in the way of our ability to grow,” the Ohio Republican told CNBC’s “Closing Bell” in calling for a top income tax rate of 25 percent instead of the current 35 percent. “I think that we need to overhaul both the corporate tax code and the personal tax code.” In the interview, Boehner also warned that if the Democratic-controlled Senate didn’t act, the dividend tax would rise from the current 15 percent range to 43 percent in January. http://www.cnbc.com/id/47343953
USAtoday.com
Average U.S. home prices — down by a third since 2006 and still falling — will rise almost 4% a year for the next five years, according to a new forecast. Market watcher Fiserv sees prices stabilizing by summer’s end and then climbing, quickly in some places until gains taper off. The forecast is based on an analysis of leading home price indexes. Investors will drive much of the momentum, as they are now in cities such as Las Vegas and Phoenix. First-time and trade-up buyers will eventually follow. By the time home prices stop falling, they’ll be almost 35% below their 2006 peak, Fiserv says.http://www.usatoday.com/money/economy/housing/story/2012-05-08/home-prices-predictions/54844880/1
BBC.co.uk
Portugal has taken austerity measures to a new level with the decision to scrap four of its 14 public holidays. Two religious festivals and two other public holidays will be suspended for five years from 2013. The decision over which Catholic festivals to cut was negotiated with the Vatican. Portugal has already cut public sector wages and raised taxes to reduce its budget deficit and deal with its economic crisis. http://www.bbc.co.uk/news/world-europe-17998937
Burma’s growth is set to accelerate, driven by commodity exports and increased investment, the International Monetary Fund (IMF) has said. The IMF has forecast growth of 6% for the next financial year, up from 5.5% in the current year. Burma has introduced economic and political reforms, including floating its currency, to open its markets. Various countries have also lifted some of the sanctions imposed against it. http://www.bbc.co.uk/news/business-18001395
Telegraph.co.uk
The trade row between Argentina and Spain took another twist on Tuesday after the Spanish telecoms giant Telefonica was ordered to pay $43m (£26.6m) for an interruption in mobile phone services lasting just a few hours. The fine by Argentina comes just days after President Cristina Fernandez de Kirchner seized control of domestic energy company YPF from Spain’s Repsol. Julio De Vido, the Argentine planning minister, said on Tuesday that the penalty against Telefonica, which owns O2 in the UK, was intended to be a warning to other telecoms providers that service interruptions will not be tolerated. http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/9253321/Argentine-Spanish-trade-row-escalates-after-Telefonica-fined.html
Independent.co.uk
The interest rate on UK government debt fell to near-record lows as investors flocked to gilts as a safe haven from the eurozone chaos. Yields on 10-year government debt fell to 1.932 per cent last night. Investors have increasingly been attracted to the UK due to its status as a non-eurozone state and the strength of its triple-A credit rating. Sam Hill, a strategist at RBC, said: “It is understandable that there is demand for assets which aren’t denominated in euros.” http://www.independent.co.uk/news/business/news/uks-borrowing-costs-near-record-lows-as-cash-flees-eurozone-crisis-7723322.html
Guardian.co.uk
There was some good(ish) news for hard-pressed consumers on Tuesday as figures pointed to a slowdown in the march of food prices. Higher food and fuel prices are making us all feel poorer, and the British Retail Consortium’s (BRC) monthly report recorded food inflation slowing sharply from the 5.4% recorded in March to 4.3% in April. A year ago, rocketing animal feed and ingredient costs were fuelling inflation, but easing world prices for commodities such as wheat and sugar are trickling down to the checkouts. An escalation of hostilities between the supermarkets, battling for custom in a turgid market, is also helping. Both food and clothing retailers “continue to discount hard”, says the BRC, pointing to supermarkets where a third of products are on promotion.http://www.guardian.co.uk/business/2012/may/08/food-price-rises-slowing
Smh.com.au
THE Canton Fair, China’s biggest marketplace for exporters and buyers, announced at the weekend an unexpected decline in contracts signed over the past month at the fair’s spring session. The weak result was the latest sign that exporters across China are struggling to maintain their global competitiveness. Falling export orders are also a warning for the Chinese economy because they coincide with steeply rising wages and higher rents for factory space, pushing many export factories to the brink of insolvency. http://www.smh.com.au/business/world-business/chinas-exporters-losing-competitive-edge-20120508-1yave.html#ixzz1uLVvKtvv
Xinhuanet.com
The HSBC Bank Vietnam launched the Purchasing Manager Index (PMI), an indicator of the economic health of the manufacturing sector, in Vietnam’s Ho Chi Minh City on Tuesday. According to Trinh Nguyen, an economist from HSBC, the survey, which has been conducted since April 2011, showed that the manufacturing output decreased while export turnover improved in Vietnam in April 2012. Thanks to the sharp increase of new export orders, the downturn of the PMI in April 2012 slowed down to 49.5 points comparing to the figures of previous months. For the first time since November 2011, manufactures have recorded an overall increase of the new orders from abroad for three consecutive months. The survey also indicated that goods inventory and employment rate in April increased slightly. http://news.xinhuanet.com/english/business/2012-05/08/c_131575739.htm
The top court has reduced the burden of proof for a plaintiff in a civil lawsuit to prove that an industry giant has a monopoly or dominant market position. Companies and public utilities now have to prove that they did not abuse their market dominance, a move legal experts welcomed as ensuring competition and protecting consumer rights. The move is also likely to see the country conduct stricter investigations into international mergers and acquisitions, experts said. A judicial interpretation of the Antitrust Law, issued by the Supreme People’s Court on Tuesday, has reduced the plaintiff’s burden to prove whether an industry giant, such as electricity and gas suppliers, has a dominant market position in civil disputes. It takes effect in June. http://news.xinhuanet.com/english/business/2012-05/09/c_131576603.htm
The construction of a 100-billion yuan (16 billion U.S. dollars) high-tech zone was jointly launched Tuesday in southwest China’s Sichuan province by the provincial government and a Singapore company. The Singapore-Sichuan High-tech Innovation Park, planned to cover 10.34 square kilometers and house 120,000 residents in Gaoxin district and Tianfu district in Chengdu, capital of Sichuan, is expected to attract an investment of 100 billion yuan from 2012 to 2020. Under the guidance of Sichuan government authorities, the project will be operated by the Singapore-Sichuan company Sino-Singapore (Chengdu) High-Tech Innovation Park Development Company Ltd., with a registered capital of 297 million U.S. dollars, jointly invested by Singapore state-owned company Temasek Holdings and Chengdu High-tech Investment Group, said Tang Hua, deputy director of the development administration of Gaoxin district. http://news.xinhuanet.com/english/china/2012-05/09/c_123097135.htm
Although some short-term indicators declined substantially in April, long-term indicators are pointing to a gradual recovery of the eurozone economy, a report said on Tuesday. According to the Macro Views report released by Berenberg Bank, most long-term leading indicators for the eurozone point to a gradual recovery from the third quarter onwards. Germany economic institute Ifo has released the result of its April business survey, which showed the index for industry and trade continued to rise. The expectations index for April was 102.7, the same as that in March but much higher than in last October. http://news.xinhuanet.com/english/business/2012-05/08/c_131575879.htm
Thehindu.com
Amid concerns over the pressure mounted by rising food inflation, the Reserve Bank of India (RBI) has expressed the view that addressing the supply-side issues would help tackle food price inflation. RBI Deputy Governor Subir Gokarn said the supply system was not responding in line with the demand and this, in turn, was leading to inflation. “This is one source of pressure which needs to be addressed,” he added. Mr. Gokarn was interacting with the members of the Federation of Indian Chambers of Commerce and Industry (FICCI) here on Tuesday. Unlike the situation in 2003-08, the “golden period”, when the economy was buoyant, the government was spending more on consumption and subsidies rather than capacity on building. The gross investment would not go up unless the situation was reversed, he pointed out http://www.thehindu.com/business/article3398036.ece
Yonhapnews.co.kr
South Korean banks’ household loans rose in April from the previous month due to people borrowing more money to pay for moving expenses, the central bank said Wednesday. Local banks’ household loans, including home-backed loans and credit loans, reached 453.6 trillion won (US$397.9 billion) as of the end of April, up 1.34 trillion won from a month earlier, according to the Bank of Korea (BOK). Household lending rose during the month as people drew more mortgaged loans to cover moving costs and borrowed money using personal overdraft accounts, it said. Many South Korean move in spring and fall to take advantage of the good weather. http://english.yonhapnews.co.kr/business/2012/05/09/73/0503000000AEN20120509002100320F.HTML
South Korea’s money supply remained nearly unchanged in March from the previous month as gains in short terms trusts and savings were offset by contractions in funds and certificates, the central bank said Wednesday. The country’s M2, a narrow measure of the money supply, reached a seasonally adjusted 1,768.5 trillion won (US$1.54 trillion) in March, effectively unchanged from 1,756.3 trillion won for the previous month, according to the Bank of Korea (BOK). Compared with a year earlier, the M2 expanded 5.7 percent in the month. Since January, the central bank began releasing seasonally adjusted figures on money supply data using month-on-month comparisons, in order to better gauge the short-term economic situation.http://english.yonhapnews.co.kr/business/2012/05/09/95/0502000000AEN20120509001500320F.HTML
Fin24.com
The economy shed 75 000 jobs in the first quarter of the year, according to figures released by Statistics SA on Tuesday. This was despite growth in the agricultural sector, which gained 26 000 jobs, and in private households, which created a 33 000 jobs in the first quarter of 2012, according to the quarterly labour force survey. However, the number of job losses were still down on the last quarter of 2011, when the formal sector shed 107 000 jobs. According to the survey, 28 000 jobs were lost in the informal sector in the first quarter of 2012. http://www.fin24.com/Economy/SA-unemployment-swells-20120508
Tehrantimes.com
Indian External Affairs Minister S.M. Krishna said on Tuesday that Iran is a key country for India’s energy needs. Resisting U.S. pressure to further scale down oil imports from sanction-hit Iran, India made it clear that it has to look at the issue involved beyond the energy trade as it has “vital” security stakes in the Persian Gulf region. After talks with U.S. Secretary of State Hillary Clinton during which she asked India to restrict its trade and energy ties with Tehran, External Affairs Minister S.M. Krishna said, “I conveyed our vital stakes in peace and stability in the Persian Gulf and wider West Asian region, given the six million Indians who live there and the region’s importance to our economy.” http://www.tehrantimes.com/economy-and-business/97675-india-rebuffs-clintons-call-for-reduction-in-oil-imports-from-iran-
Per capita income stands at $13,000 in Iran, said Finance and Economic Affairs Minister Shamseddin Hosseini, adding that the International Monetary Fund has named the country as the 17th major economy in the world. Per capita income is a measure of mean income within an economic aggregate, such as a country or city. Per capita income is often used as a measure of the wealth of the population of a nation, particularly in comparison to other nations. Between 2006 and 2011, the gross domestic product (GDP) of Iran increased from $241 billion to $482 billion, the IRNA News Agency quoted Hosseini as saying. http://www.tehrantimes.com/economy-and-business/97657-irans-per-capita-income-at-13000-says-economy-minister
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