News That Matters

The White House and congressional leaders expressed confidence they could still reach a deal to raise the US borrowing limit and avert a default, the FT says, even after talks to strike an ambitious plan to cut $4,000bn from the country’s deficit broke down over disagreements on tax cuts for the wealthy


European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing


Blackstone pulled out of its investment in a Chinese agricultural company earlier this year after the mainland group warned the buy-out firm that its involvement would complicate moves to raise prices,the FT says.


While Chinese inflation is growing rapidly, imports are decelerating sharply, says the FT – further complicating Beijing’s attempts to maintain rapid growth and while containing prices. China’s imports increased 19.3 per cent in June from the same month a year earlier,


JPMorgan is on course to overtake Bank of America as the United States’ biggest bank, though chiefly because BofA is deleveraging faster than its rival, reports Reuters. JPMorgan had $2,200bn assets at the end of March


Fitch has downgraded the state of Minnesota one notch to AA+, as the state’s budget impasse continues, Reuters reports. Minnesota’s state government has been shut since Friday after Democrats and Republicans missed the July 1 deadline to agree on a budget


Friday’s nonfarm payrolls release is likely to report that jobs rose 90,000 in June, up from the anaemic 54,000 posted in May, says Reuters from a survey of economists conducted last week. Jobless rates were expected to remain at 9.1 per cent


Anshu Jain is now virtually certain to be named co-chief executive of Deutsche Bank, following a meeting of senior directors over the weekend, according to bank insiders. The choice of his co-chief executive, however, remains uncertain
Asian stock markets were down Monday on Friday's soft U.S. jobs data and a sharp rise in inflation in China, while Australian shares lost ground on concerns over a carbon tax plan. Japan's Nikkei Stock Average fell 0.5%, Australia's S&P/ASX 200 lost 1.3%, South Korea's Kospi Composite was 0.8% lower and New Zealand's NZX-50 was off 0.6%. Malaysia' KLCI fell 0.4% after large weekend protests in Kuala Lumpur pressed for changes to the electoral system. Dow Jones Industrial Average futures were down 58 points in screen trade.


European Union President Herman Van Rompuy has called a meeting of top EU policy makers Monday to discuss plans for a second bailout package for Greece, EU officials said on Sunday. The gathering comes as Europe continues to struggle with a contentious issue: whether and how Greece's private-sector creditors should share the burden when the anticipated second aid package is doled out to the debt-burdened country.


Today's markets seem like they are tailor-made for money managers investing based on big-picture, "macro" themes such as the European debt crisis and economic woes in the U.S. Instead, many are struggling. Macro-focused managers have been tripped up by whiplash-inducing swings in stocks, currencies and commodities, often brought about by the latest twists and turns of impossible-to-time political developments.


More than a year after China started letting its currency climb against the dollar, the nation is a bigger force in exports than ever, adding to its dominance as a trading power and complicating efforts by other nations to wrest away manufacturing jobs. The latest evidence of China's prowess came Sunday, when it reported that exports hit $162 billion in June and $874 billion in the first half of the year, both records, up nearly 20% from the year-earlier periods. The growth, which came despite economic difficulties in key markets like the U.S. and Europe and supply-chain disruptions in Japan


The U.S. labor market could stay sluggish for a while, with small-business executives reluctant to hire amid the murky economic outlook. Almost two-thirds—64%—of small-business executives surveyed said they weren't expecting to add to their payrolls in the next year and another 12% planned to cut jobs, according to a U.S. Chamber of Commerce report to be released Monday. Just 19% said they would expand their work forces.


Australia's embattled Prime Minister Julia Gillard on Monday began a nationwide campaign to win support for a planned carbon tax, even as the policy drew a hostile response from heavy industry, investors and some of the country's biggest employers.


Sales and profit growth have started to slump at the deep-discount retailers called dollar stores, after a robust performance during the recession, a sign that even fairly cheap toys and other small indulgences now are a stretch for some consumers. In the past several weeks, Dollar General Corp., Family Dollar Stores Inc. and Dollar Tree Inc., the country's three largest chains that sell sharply discounted food, household staples and other items in modest-size stores, all have missed their quarterly earnings targets.
Google Inc. is expected to post sharp gains in profit and sales when the Internet search giant reports second-quarter earnings after the market’s close Thursday, in part on expected growing interest in its online advertising.  Analysts polled by FactSet Research estimate that Google will report earnings excluding one-time items of $7.83 a share for the period ended in June, and $6.53 billion in revenue. 

Spot gold was steady on Monday, as the dimmed outlook for the U.S. economy and persistent worries about euro zone nations' debt problem supported sentiment. Spot gold was little changed at $1,544.10 an ounce by 0257 GMT. It rose to a two-week high of $1,544.46 earlier in the day. U.S. gold GCcv1 edged up 0.2 percent at $36.62.

Oil fell for a second day on Monday after a drop in China's crude imports and disappointing U.S. employment data rekindled concerns of a demand slowdown at the world's top two energy consumers.Brent crude for August slid 63 cents to $117.70 a barrel at 0336 GMT (11:36 p.m. EDT), while U.S. crude benchmark West Texas Intermediate (WTI) shed 39 cents to $95.81.


John Boehner, the top Republican in Congress, told White House talks on Sunday that budget cuts must exceed the amount by which the debt ceiling is raised and said any deal must exclude tax hikes. An agreement that builds on the work of a group led by Vice President Joe Biden show most promise, an aide to Boehner said on Sunday after negotiations at the White House that lasted about 75 minutes.


Italy's government scrambled to present a united front and defend the embattled economy minister on Sunday, hoping to soothe market fears that triggered a sell-off in Italian stocks and bonds last week. The sell-off, fuelled in part by fears that Economy Minister Giulio Tremonti may be forced out, raised concern that market contagion worries might be shifting to Italy and set off alarm bells in the European Union, the ECB and the Bank of Italy.
The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals. The 3 percentage point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.


Japan will carry out safety tests on halted nuclear reactors before allowing them to restart, according to a statement released in Tokyo today. The checks will be stricter than previous tests, according to the statement, which was signed by trade minister Banri Kaieda and nuclear crisis management minister Goshi Hosono.


Italy’s financial-market regulator moved to curb short selling after the country’s benchmark stock index fell the most in almost five months and bonds tumbled on investor concern Italy would be the next victim of the region’s debt crisis. The regulator known as Consob ordered last night that short sellers must reveal their positions when they reach 0.2 percent or more of a company’s capital and then make additional filings for each additional 0.1 percent. The measure takes effect today and lasts until Sept. 9.


China’s economy probably grew the least in almost two years last quarter, contributing to a global weakening that Premier Wen Jiabao confronts with more limited scope for policy response than during the 2008 world recession. The government is forecast to report July 13 gross domestic product rose 9.3 percent from a year before, according to the median estimate in a Bloomberg survey, down from 9.7 percent the previous quarter. With data two days ago showing consumer prices climbed the most in three years in June, any easing in the central bank’s monetary stance risks escalating price pressures.


Malaysian Prime Minister Najib Razak may avoid calling an early election this year after police clashed with thousands of opposition-backed activists July 9, signaling a rise in political risk in the Southeast Asian nation. Police detained 1,697 people as demonstrators protesting against what they call unfair voting practices marched on Kuala Lumpur landmarks including Merdeka Stadium and the king’s palace.
A dismal U.S. jobs report. A European debt crisis for which there is no quick fix. Slowing growth in China. There are a number of reasons to be cautious about the prospects for the global economic recovery. It's against this background that U.S. Federal Reserve Chairman Ben Bernanke will step before Congress for his semi-annual testimony on Wednesday. He will likely be barraged with questions about Friday's jobs report — a report so across-the-board disappointing that JPMorgan economist Michael Feroli called it "worse than Spinal Tap's 'Shark Sandwich.'"
Inma Rodriguez lost her job, and now that she's defaulted on her mortgage, she's about to lose her home. But the nightmare doesn't end there: Once creditors kick her out, she'll still need to pay back the money she borrowed to buy her house. It's a mortgage anomaly seen in much of Europe, but especially acute these days in Spain, a nation grappling with an economic crisis triggered by the collapse of a real estate bubble. Since the 2008 property crash, more than 300,000 have been hit by the potential double-whammy of eviction and mounds of mortgage debt.
British government lawyers are drawing up a plan to block Rupert Murdoch's bid for the pay-TV operator BSkyB, the Independent newspaper reported on Monday. Revelations that illegal voicemail hacking at one of Murdoch's papers, the News of the World, targeted a murdered girl and the relatives of victims of the 2005 London bomb attacks have stirred broad public and political anger, and given a boost to opponents of the BSkyB bid.
Billionaire investor Warren Buffett said Friday the nation's employment picture will improve significantly once residential housing construction rebounds. Buffett spoke to Bloomberg Television on Friday morning as the Labor Department released a weaker-than-expected monthly jobs report. He said the report shows the economy is still a long way off from where it should be, but Buffett remains optimistic about the recovery and sees no danger of a second recession.
Exports from Germany staged a stronger-than-expected recovery in May. The value of goods and services sold rose 4.3% from a month earlier to 92.1bn euros ($132bn, £82bn). Imports also rose by 3.7% - not enough to stop the country's trade surplus jumping from 10.8bn to 14.8bn euros.
Sweeping energy market reforms due to be unveiled by the Government on Tuesday will make UK electricity bills among the highest in Europe, say analysts. Chris Huhne, the Energy Secretary, is likely to say that energy companies, such as Centrica and EDF, will get a fixed price for electricity generated from nuclear power and wind farms which is higher than the market price


Inflation should stick at a two-and-a-half-year high in figures out on Tuesday, before resuming its relentless climb upwards, economic analysts predict. Data for June is expected to show that for a third month in a row the yearly rise in prices was 4.5pc, the steepest rate since October 2008 and more than double the Bank of England's official 2pc target.


Boardroom confidence in the economic recovery is collapsing at its fastest rate in three years as companies predict falling profit margins and fear the fallout from weak consumer spending in the UK. One-in-three finance directors now believes the economy will fall back into recession, according to the survey of FTSE 100 and 250 companies by Deloitte. 

The gap between the fastest and slowest growing English regions widened further in June, according to the latest Lloyds TSB regional Purchasing Managers' Index, published today. There was robust output growth in London, the South-east and the Midlands but only marginal rises in business activity across most other regions, Lloyds said.


Aggressive headhunting tactics could be on the way back to the City after a sharp drop in the number of financial workers looking for a new job, according to a financial services recruitment firm. Astbury Marsden said the number of banking and hedge fund staff actively looking for a new City job dropped 20 per cent to a 15-month low in the second quarter of this year. 

Capital city weekly rental rates stalled in the June quarter, posting no growth in the latest sign of a cooling property market. Median capital city rents were flat in the June quarter with only two capital cities showing increases in the quarter, in the latest sign of slowing activity in the real estate market. In the year to June, capital city median rents - for houses and units - rose 2.7 per cent to $380 per week, according to RP Data.


Domestic airline passengers will face a price rise after the Gillard government's carbon tax is introduced on July 1 next year. In a statement released today, Qantas said the government's carbon pricing scheme would cost the company up to $115 million in the 12 months following the introduction of the new tax, and it is customers who will pay the bill.


Not long ago it was the toast of investors, but India's appeal has taken a hit, with bearish sentiment building thanks to worries over stubbornly high inflation and widespread political corruption. Investor ardour for Asia's third-largest economy has been cooled by a litany of bad news, from slowing growth, rising prices and spiralling interest rates to paralysis on economic reforms and a string of high-profile graft scandals. Last week, global business information agency Dun and Bradstreet reported that its India business optimism index had fallen by a hefty 22 per cent quarter-on-quarter.


The world's largest copper producer, Codelco, is facing a 24-hour strike in opposition to a plan that workers say would move Chile's state-owned mining corporation toward privatisation. The Federation of Copper Workers, which represents 15,000 of the company's 20,000 employees, called for the strike, which will be the company's first in 18 years.
China should stick to its prudent monetary policy in the coming few years while instituting proactive fiscal measures to substantially promote economic structure reform, the China Securities Journal on Monday quoted a central bank official as saying. As the country maintains its moderately tight money supply, adopting a proactive fiscal policy is the key to the successful transformation of its economic structure, Xia Bin, a member of the central bank's monetary policy committee, said in the report.


China's consumer price index (CPI), a major gauge of inflation, has increased to its peak this year in June and its growth will slow down over the rest of the year, the Bank of Communications (BOC) said in a report Saturday. China's inflation escalated to the highest level in three years with CPI jumping 6.4 percent year-on-year in June, mainly driven by a 14.4 percent surge in food prices, the National Bureau of Statistics said.


China's fiscal revenue growth is expected to slow down in the later period of the year, Finance Minister Xie Xuren has said. Policies such as higher exemption threshold for individual income tax and tax breaks for small-sized firms with thin profits will reduce fiscal revenue, according to a statement posted on the ministry's website on Saturday, citing Xie's address at a meeting held on Friday. Fiscal revenue rose fast in the first half of the year as the country's economy was running generally well toward the direction of macro controls, he said.


The long-term goal of China's monetary policy is to control inflation, maintain economic growth and a high employment rate and maintain a balance in the country's international payments, central bank governor Zhou Xiaochuan said Friday. Zhou made the remarks at the 16th World Congress of the International Economic Association (IEA), which was held from July 4 to 8 at Beijing's Tsinghua University. Zhou's remarks came just one day before June's Consumer Price Index (CPI) will be released. The CPI is predicted to hit a new high, well above the government's 2011 target ceiling of 4 percent.


New Zealand Finance Minister Bill English and Australian Deputy Prime Minister and Treasurer Wayne Swan will discuss progress on the single market between the two countries amid wide-ranging economic talks in Wellington this week. The next steps in the Trans-Tasman Single Economic Market would be on the agenda as well as the economic outlook for the region, when they meet on Thursday, said English. "I'm looking forward to again catching up with Treasurer Swan to discuss a number of issues of mutual interest to New Zealand and Australia," English said.


The Philippines' central bank Bangko Sentral ng Pilipinas (BSP) would not rule out still higher inflation numbers over the next three months, with rates hitting 5 percent or higher as electricity rates and oil prices push inflation onto higher ground. BSP Deputy Governor Diwa Guinigundo said by email Sunday that inflation was to peak between July and September, and the inflation rate could top 5 percent. "It is very difficult to rule that out in the face of volatile petroleum prices," said Guinigundo.
Indian manufacturers have for the first time joined hands with Chinese businessmen to win a bigger foothold in the growing agrochemical market of Russia and other former Soviet states. The International Crop Science Conference and Exhibition, ICSC-2011, held in Moscow last week also became the first trilateral business initiative on Russian soil.


Infosys Chairman K. V. Kamath on Saturday disagreed that there would be an economic slowdown and also predicted that industrial slowdown was ‘most unlikely'. “India is now growing at the rate of over 8.5 per cent, and if unaccounted growth parameters are considered then the growth rate is over 10 per cent. This growth will be for a long term,”
Hiring activity in India showed an upward trend during the quarter ended June 30 with hiring by IT sector up by 32 percent and that of fast moving consumer goods (FMCG) sector by 21 percent, said a survey.  Health care sector registered a growth of 19 percent in hiring, said the survey which was conducted online by, a recruitment tendering platform, among 786 hiring managers and 1,426 recruitment consultants.
South Korea's finance minister said Monday that the government could carry out smoothing operations if the local currency fluctuates sharply against the U.S. dollar.
"If there are steep fluctuations in currency rates, our basic stance is that we could implement smoothing operations to ease the herd behavior in the market," Finance Minister Bahk Jae-wan told reporters after a meeting with financial experts in Seoul.

Domestic orders won by South Korean construction companies sank in May, despite the government's measures to boost the sluggish construction sector, a report said Monday. According to the report by the Construction Association of Korea (CAK), South Korea's construction companies clinched a combined 8.46 trillion won (US$7.99 billion) in new orders in May, down 14.1 percent from the same month last year.

South Korea and Indonesia have agreed to make efforts to declare the launch of their free trade deal in November, Seoul's trade ministry said Monday.
The two countries held the first round of feasibility study talks on their so-called comprehensive economic partnership agreement (CEPA), similar to a free trade deal, in Jakarta last week. In 2007, a free trade agreement between South Korea and the Association of Southeast Asian Nations (ASEAN), which includes Indonesia, went into effect.
Zimbabwe state media says police have arrested five employees of the finance ministry, which is controlled by Prime Minister Morgan Tsvangirai's party. Independent rights groups have decried what they call harassment of Tsvangirai supporters by President Robert Mugabe's loyalists. The two sides have been joined in an uneasy coalition government following violent and inconclusive 2008 elections 

The International Monetary Fund says that the total oil revenues of the member states of the Organization of Petroleum Exporting Countries will surpass one trillion dollars in 2011 and Iran will earn about $100 billion of that sum.  According to a new IMF report entitled “World Economic Outlook”, the aggregate oil income of the 12 members of OPEC reached $766 billion in 2010, and it is expected that the figure will hit a new record in 2011 on high oil prices and reach $1.093 trillion.

The G-20 industrialized and developing nations are having “very informal” discussions about a series of matters including the relationship between the Federal Reserve’s benchmark rates and emerging markets’ currencies, European Central Bank governing council member Christian Noyer said Sunday.  “The debate was touched upon...what is the responsibility of U.S. monetary policy and of emerging countries’ exchange-rate regimes in the rise of global inflation,” Noyer said. “It’s an important debate, on which our discussions are very open and informal.”