Eurozone Woes Hit Singapore GDP In Q2. Singapore's trade-driven economy contracted by 1.1 % in the second quarter from the previous three-month period as debt woes dampened European demand, a government estimate showed Friday. The unexpected contraction, down from 9.4 % growth in the preceding quarter, was largely due to an output drop in the biomedical manufacturing industry, the trade ministry said in a statement. (AFP)

China Economic Growth Slows To 7.6% In Second Quarter. China's economy has grown at its slowest pace in three years as investment slowed and demand fell in key markets such as the US and Europe. Gross domestic product rose by 7.6% in the second quarter, compared with the same period a year ago. That is down from 8.1% in the previous three months. In March, Beijing cut its growth target for the whole of 2012 to 7.5%. (BBC)

China Property Investment Slows, But Sales Rebound In June. China's real estate investment growth slowed sharply in the first half, dragging down the broad economy, but property sales swung into positive growth in June for the first time in eight months, boding well for a recovery in the sector which could ease concerns about a hard landing of the world's No 2 economy. Real estate investment, which affects more than 40 other sectors from cement, steel to furniture, grew 16.6 % in January-June of 2012, versus an annual rise of 32.9 % in the same period last year, the National Bureau of Statistics said on Friday. (Reuters)

India's Exports Fall 5.5%, But Trade Deficit Narrows. India's exports fell nearly 5.5 % in June due to weak demand from Europe and the United States, a trade ministry official said, adding pressure on Asia's third-largest economy. Imports also fell sharply, however, thanks in part to lower global oil prices, and narrowing the trade deficit to $10.3 billion compared to the previous month, something of a silver lining that may help assuage concerns about India's balance of payments. (Reuters)

Moody's Cuts Italy's Debt Rating. Moody's has cut Italy's credit rating, warning that the country was likely to see a sharp rise in borrowing costs. The rating was cut two notches from A3 to Baa2, two levels above junk status. The move raised concerns of a contagion risk from Spain and Greece, pushed Italian bank shares down and kept the euro near two-year lows against the dollar. Moody's said that Italy's near-term economic outlook had "deteriorated" and access to credit markets could toughen. (BBC)

Spain Govt To Cut Us$69bil From Public Deficit In Next 2'' Years. The Spanish government's most recent reforms will slash 56.4 billion euros (US$69bil) from the public deficit in the next 2 years, an official document showed, leaving a gap to be filled by taxes on energy. The 8.6 billion euro shortfall will be covered by other measures such as new energy and environmental taxes, according to a document for international investors posted on the Economy Ministry website. Of the 56.4 billion euros of measures laid out so far, about 34.4 billion euros will come from changes to tax rates and 22 billion from spending cuts until 2014. (Reuters)

Germany To Help Spain Give Skills To Jobless Youths. Germany says it will help Spain to launch German-style apprenticeships for its young people, half of whom are unemployed because of the debt crisis. Spain's Education Minister, Jose Ignacio Wert, signed an agreement with his German counterpart in Stuttgart on Thursday, to give more Spaniards on-the-job training with German firms. Spain's youth unemployment has soared to 52% - the highest rate in the EU. (BBC)

Merkel Gives No Ground On Demands For Oversight In Debt Crisis. Chancellor Angela Merkel gave no ground on Germany's demands for more European control over member states in return for joint burden-sharing as she conceded that the bloc has yet to master the debt crisis. The German leader said yesterday she hadn't softened her stance at last month's summit in Brussels and that a so-called banking union involving a bloc-wide financial overseer will have to include joint oversight on a 'new level.' She chided member states who had sought to slow moves toward greater central control 'since the first summit' in the 2 1/2-year-old crisis. 'All of these attempts will have no chance with me or with Germany,' Merkel said in an interview with broadcaster ZDF in Berlin. (Bloomberg)

German, French Yields Fall To Records As Investors Seek Havens. Europe's highest-rated government bonds rose this week, pushing German two-year note yields down to a record minus 0.052 %, as investors sought havens from the euro-area's financial turmoil. Austrian, French, Belgian and Finnish two-year yields fell to all-time lows this week and those on similar-maturity Dutch debt dropped below zero for the first time. The European Central Banksaid overnight deposits from financial firms slid to the lowest since December as it ended paying interest on excess cash after cutting interest rates. Italian notes rose this week even after Moody's Investors Service cut the nation's credit rating. (Bloomberg)

UK Unveils Lending Scheme To Help Firms And Households. Britain revealed details of a new scheme on Friday to help make around 80 billion pounds of loans more accessible and cheaper for households and businesses, as part of efforts to lift the economy out of recession. Finance minister George Osborne and Bank of England governor Mervyn King jointly announced the 'funding for lending' scheme last month, under which the BoE will give banks cheap access to finance if they then lend in turn to cash-strapped businesses and home-buyers. (Reuters)

UK Construction Output Fell Sharply In May, ONS Says. Output from the UK construction sector fell 6.3% in May compared with a year earlier, official figures show. Between March and May, a more robust reading, the drop was steeper, down 7.4% from the same period in 2011, the Office for National Statistics said. The main driver was the fall in new public works, which fell by about 22%, reflecting the impact of government spending cuts. (BBC)

Euro Turns Up From 2-Year Low On Short Squeeze. The euro turned up sharply against the dollar on Friday, which analysts attributed to a big shift in traders betting against the currency after it touched technical levels near the lowest in two years. The euro fell as low as $1.2156, before rebounding to $1.2245, up from $1.2197 in North American trade late Thursday. For the week, it's still down 0.4%, having fallen for the past seven sessions, according to FactSet. The dollar index, which measures the greenback's performance against a basket of major currencies, turned down to 83.324, from 83.666 Thursday. The move in the euro erased the index's gain for the week, which was already weighed by a decline versus the Japanese yen. Among other major currency pairs, the dollar slipped to buy 79.29 yen, from ''79.33 late Thursday. The greenback has declined 0.7% this week versus its Japanese counterpart. The British pound extended gains to $1.5578, up from $1.5429 Thursday. It's gained 0.6% from last Friday. The Australian dollar climbed to $1.0227 from $1.0138 in the prior session, up 0.1% from the levels seen a week ago. (Market Watch)

Oil Up Third Day On China GDP, North Sea Problems. Oil prices rose for a third day on Friday after China reported GDP data in line with expectations and slightly above the government's target, soothing concerns about slowing growth in the world's second largest economy. Brent August crude jumped $1.73 to $102.80 a barrel by 2:47 p.m. EDT (1847 GMT), reaching $103.44 intraday and moving above its 50-day moving average for the first time since April when it pushed past $101.65. Brent was headed for a weekly gain of more than 4 %, with the front-month August contract expiring on Monday. U.S. crude rose $1.02 to settle at $87.10 a barrel, after reaching $87.61. It scaled the front-month 50-day moving average of $87.50, pushing above it for the first time since early May on its way to posting a 3.14 % gain for the week. (Reuters)

Gold Rises On Equities, Commods Rallies, China Data. Gold rose about 1.5 % on Friday, boosted by sharp rallies in equities and commodities after data showed that China's economic growth, though slower, was stronger than some had expected. Spot gold rose 1. 2 % at $1,5 8 9.6 3 an ounce by 2 : 42 p.m. EDT (18 4 2 GMT). Among other precious metals, silver was up 0.6% at $27.32 an ounce, platinum was up 1.2 % at $1,425. 7 5 a n ounce, and spot palladium was up 1.3% at $580.7 5 an ounce. (Reuters)

Source: Kenanga