Economic Data
:
NORTH AMERICA SEMI EQUIPMENT INDUSTRY MAY BOOK TO BILL RATIO: 1.05 V 1.10 PRIOR (2nd consecutive m/m decline; 4th month above parity)
(NZ) NEW ZEALAND MAY CREDIT CARD SPENDING M/M: 0.4% V 0.2% PRIOR; Y/Y: 3.9% V 3.7% PRIOR
(TW) TAIWAN MAY UNEMPLOYMENT RATE: 4.25% V 4.20%E
(NZ) NEW ZEALAND MAY NET MIGRATION: +160 V -800 PRIOR
Markets Snapshot (as of 04:30GMT)
Nikkei225 -0.1%
S&P/ASX -1.0%
Kospi -2.0%
Taiwan's Taiex -0.7%
Singapore Straits Times Index -0.4%
Shanghai Composite closed
Hang Seng -1.0%
Sept S&P Futures +0.3% at 1,322
Aug gold +0.1% at $1,567/oz
Aug Crude oil +0.7% at $78.75/brl
Overview/Top Headlines:
Markets remain focused on Europe. Rhetoric has increased to break the bank sovereign loop. EU's Juncker said the EFSF will disburse €1B in Greek loans by the end of June; Expects Spain to formally request a banking bailout by Monday Jun 25th, exact amount to be determined when MOU is completed. Hopeful ESM treaty will enter into force as expected in July (will not encounter challenge from German constitutional court review).
Analysts are expressing some concern that "Operation Twist" may lead to lower levels of liquidity in the short-term funding market.
AUD/USD quietly traded around $1.0050. Fortescue Metals launched a a constitutional challenge to the mining tax, major miners BHP and Rio Tinto fell on the news. Copper and silver futures were weaker in the session, while corn and wheat gained.
Moody's announced its ratings downgrades for global banks around the world. Markets had a limited reaction since the cut expectations were so well publicized ahead of time.
USD/JPY was mostly untraded slightly to the upside, however heading into the European open is rose nearly 0.3% to ¥80.50.
Speakers/Geopolitical/In the press
(CN) Former World Bank chief economist Justin Lin: China should do more on fiscal policy to deal with slowing growth; Monetary policy should be secondary - China Daily
(SG) President of Singapore's sovereign wealth fund Temasek: Expects China's top 4 banks to have sufficient cash flow to deal with declining ROE - SCMP
(BR) Brazil Fin Min Mantega: We have signed a trade agreement with China to increase bilateral investment; China can tap up to $30B from Brazil Central Bank
(EU) Italy PM Monti: Speculators will "attack" Italy & others if summit fails; Italy's situation is better than 6 months ago, but more to do - German press
Equities:
RIO: Pushes back its forecast for peak China steel production of 1B tons toward 2030 from earlier forecast of around 2020 - AFR
Lenovo, 992.HK: Denies speculation that it cut its guidance to suppliers for shipment growth this year
QAN.AU: Management expressed concerns that Qantas may go under if Abu Dhabi owned Etihad is allowed to buy enough of a stake in Virgin Australia - SMH
U.S. Equities:
R: Lowers Q2 guidance to $0.90-0.95 v $1.10e (prior $1.07-1.12); Lowers FY12 EPS to $3.65-3.85 v $4.09e (prior $4.02-4.12); -8.9% after hours