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Wen Jiabao, China's premier, and Angela Merkel, German chancellor, Berlin, June 28, 2011.
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
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.
The all-important vote is set to take place at 2pm today Greek time. If it is
passed, one would expect tomorrow’s vote to be a formality. That will be far
from the end of the story. We have arrived at this point because Greece has not
made sufficient progress in the pledges it made originally. Evidence of
austerity fatigue is rife. While passing of the package over the next two days
will stop a July default and the consequences that that may have on global
financial markets, the hard work really only begins when implementation of the
austerity and privatisation commences. One has to suspect that we will be back
at this point again at some stage in the future."
Police Clash with Greek Protesters:
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
Tennents revenue grew by +5.9%, with volume growth of 4.0%, implying improving
price mix in the business. Both the on-trade and off-trade performed well.
Magners export business revenue rose 26.9%, maintaining its strong growth
trajectory. The US and Australia drove growth but there was also a better
performance in Spain. The ABI third-party brands grew revenue by 18.9% — this is
an impressive performance. Northern Ireland revenue was up 1.1%.
As expected, the Republic of Ireland cider business, Bulmers, reported negative
top-line growth (-3.3%) with underlying deflation (-6%) accelerating on last
year's number (-4.7%). However, we believe that the Irish beer business is
performing well which will help the contribution in Ireland.
Revenue for the lower-margin Gaymers portfolio revenue fell -15%, with a -22%
decline in volumes. We suspect that this decline was driven by the drop off in
'own label' sales.
DAVY VIEW: This represents a robust start to the year. While we are facing some
difficult World Cup comps, and UK and Irish consumer markets remain fragile, we
are seeing good momentum across the business. We are moving to the top on the
range of EBIT guidance at €115m (previously €113m)."
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.
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
July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session
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 US Energy department recently said that growing volumes of Canadian crude
oil imported into the United States contributed to record-high
levels at Cushing, Oklahoma of over 41m barrels at the end of March 2011
(86% of working capacity at Cushing), and a price discount for WTI compared with
similar-quality world crudes such as Brent. A discount for WTI is expected to
persist until transportation bottlenecks impacting the movement of mid-continent
crude oil to the Gulf coast are relieved. Consequently, the projected US refiner
average acquisition cost of crude oil, which was about $2.70 per barrel below
WTI in 2010, is $1.60 per barrel above WTI in 2011 and $1.10 per barrel above
WTI in 2012.