Japan: Japanese industrial output surged a seasonally adjusted 5.7% in May from the previous month, the Ministry of Economy, Trade and Industry said Wednesday. It was the second-largest gain on record as production continued to recover after the March 11 earthquake and tsunami.
The rise of 5.7% last month from the previous month, followed a 1.6% increase in April. It was the biggest rise since a 7.9% jump in industrial production in March, 1953. Lower gains are expected in the coming months as manufacturers respond to the impact of electricity shortages as a result of the cut in nuclear power output.
Greek vote to adopt austerity measures today: Conall Mac Coille, chief economist at Davy, comments - -"Markets will focus on Greece today as the government there attempts to implement a further €28bn austerity package as part of a new deal to secure EU/IMF funding. Greek 10-year bond yields fell somewhat yesterday as markets perceived there to be a greater probability that the new austerity plan will be implemented and reacted to the news that French banks and the French government had agreed a proposal to provide longer-term funding to Greece.
That said, markets clearly remain unconvinced of the planned path to fiscal sustainability for Greece, conditional on substantial sales of state assets. Investors can only question the political will — both in Greece and amongst the core European economies — to see through the planned fiscal adjustment when the severe tax and spending plans are likely to depress Greece's GDP growth in the near term.
French proposals to provide longer-term funding for Greece should be seen as a positive for Ireland. The Irish sovereign is potentially dependent on European Stability Mechanism (ESM) funding from mid-2013 if market funding is not available. The terms of ESM funding remain opaque to investors, creating an obstacle for Ireland in re-engaging with private markets. Uncertainty remains despite last week's decision that the ESM will not enjoy preferred creditor status. However, if longer-term funding is the best policy to allow the Greek fiscal adjustment a chance of success, presumably that same logic will be applied to ESM funding.
Today's Irish retail sales and labour market data should reinforce the view that domestic demand will remain weak going into the second quarter. Consumer spending fell by 1.9% in real terms in Q1 and retail sales volumes by 0.8% in April. Earnings continue to contract, with average weekly earnings down 3.6% in Q1. CPI inflation rose to 3.2% in April. So, Irish consumers are now being squeezed by a combination of weak earnings and rising prices.
Furthermore, many households may still want to repair their balance sheets. Irish households paid down €2.1bn of long-term loans (mainly mortgages) in Q4. The magnitude of the desired adjustment will in part depend on households' perceptions of future income growth. Consumer confidence fell back very sharply in the final quarter of 2010 as the IMF/EU deal for Ireland was negotiated, but has recovered in 2011, largely driven by the expectations component.
So, Irish households' perceptions of their future prospects may have recovered.
That said, Irish consumers may also want to save for precautionary reasons. For example, concern about future employment prospects provides a strong reason to Irish households to maintain their emergency savings. Today's Live Register data are unlikely to show little change in the 14.1% unemployment rate. However, with unemployment remaining at close to 14.0% over the last three quarters, Irish consumers should remain cautious in the second quarter."
Debt Limit Talks Stalled: White House is confident a significant" deal with GOP can be reached, with CNBC's Eamon Javers. Byron Dorgan, (D) former North Dakota senator, and Sen. Jim Demint, (R-SC) weigh in:
Economic View: Fear eased somewhat ahead of Greek vote; Dermot O’Leary, chief economist at Goodbody, comments - - "Fears that Greek politicians could vote down the austerity and privatisation programme in its Parliament today have receded somewhat as politicians previously wavering look like they will vote with the government. Nothing is certain at this stage but according to Greek media, the government will be able to garner the support of 153-155 deputies out of 300 in the vote this afternoon.
Despite rising tensions within Greece itself,
the dire warnings from Europe – that default is certain if the vote is not
passed – have likely played a role in focusing minds about the immediate
ramifications about voting down the package. These included comments from
Economics Commissioner Olli Rehn that there is no plan B (although one would
have to hope that there is), while Greece’s central bank governor states in the
FT this morning that it would be suicide to vote against the measures.
Police Clash with Greek Protesters:
C&C: The beverage group said today in a trading statement to May 31, that the fine weather over a prolonged bank holiday season in April provided some respite from the challenging consumer and macro-economic environment in Ireland and the UK. Against this backdrop, the business delivered a robust performance in the first quarter.
Trading in June has been relatively weak in comparison to the prior year with poor weather in Ireland and the UK adding to the challenge of last year’s world cup comparatives.
Barry Gallagher of Davy said: "ANALYSIS: C&C has reported strong Q1 revenue growth in the three
months to May 31st. Magners GB revenue growth (+10.1% revenue, 14% volume) was
driven by a strong volume performance in the off-trade, where the brand grew
ahead of the category. Magners on-trade volumes we believe were broadly positive
In New York Tuesday, the Dow added 145 points or 1.21% to 12,189.
The S&P 500 advanced 1.29% and the Nasdaq climbed 1.53%.
The MSCI Asia Pacific Index rose 0.3% Tuesday.
Japan's Nikkei 225 gained 1.54%; China's Shanghai Composite index fell 0.91%; Australia's S&P/ASX 200 added 1.23% and the Bombay Stock Exchange's Sensex index advanced 0.85% in Mumbai.
Moody's, the credit ratings agency, said today said it had downgraded Toyota Motor and its affiliates by one notch to Aa3, saying it is concerned about profitability because of a strong yen and high materials costs.
In Europe, the Dow Jones Stoxx 600 has risen 1.06% in early trading Wednesday.
The ISEQ is up 0.76% in Dublin.
C&C dipped 0.30%; CRH has risen 1.78%.
The euro is trading at $1.4388 and at £0.8988.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
On Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session losing streak.
On Tuesday this week, the BDI fell 4 points or 0.28% to 1,438.
Financial Times reported in January, that Australia’s flooding and fears of ship
oversupply has pushed down a gauge of the cost of hiring ships to carry coal,
iron ore and other dry bulk by nearly half since October to the lowest level
since the aftermath of the financial crisis. The Baltic Dry index, the widely
watched measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784
peak reached on October 27, 2010.
The margin between the US benchmark WTI (West Texas Intermediate) used on the New York Mercantile Exchange and Brent is almost $16.
Oil prices have plunged since
last Thursday after the International Energy Agency announced that the big
industrialised countries would release 60m barrels of oil from their emergency
stockpiles over a 30-day period.
The spot price of an oz of gold is trading in New York at $1,506.80 per oz, up $4.70 from Tuesday's close in New York.
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