Asia 

Tankan: Japanese Business Sentiment Turns Positive. Japanese manufacturers' sentiment has turned positive for the first time in nearly two years, the Bank of Japan's Tankan survey has indicated. The big manufacturers' index rose to plus 4 in the April-to-June period, from minus 8 in the previous quarter. Large manufacturers also plan to boost their capital spending in the current financial year, the survey showed. Japan has unveiled aggressive policy moves in recent months to try to spur growth in its stagnant economy. (BBC)

S. Korea June Recovery Still Fragile, Data Show. South Korea’s growth momentum remained subdued in June, key government and private-sector data showed, casting fresh doubts about whether the trade-dependent economy can stage a firm recovery in the coming months. The country’s overseas shipments shrank 0.9% from a year earlier in June, according to data released by the Trade, Industry and Energy Ministry, marking the first decline since February and suggesting that external demand remains lacklustre. Separate data showed that June’s consumer price index rose an annual 1% from a year earlier, remaining unchanged from May and staying at the lowest level since September 1999. The HSBC/Markit purchasing managers’ index for June also showed that South Korea’s manufacturing activity contracted for the first time in five months and hit a seven-month low  as export orders declined, adding to doubts on whether the government’s fresh growth target of 2.7% for the year is achievable. (Reuters)

S’pore Home Prices Up Again. Singapore home prices rose for a fifth straight quarter in the three months to June, and analysts said owners and developers of private apartments in the outer suburbs appear most at risk should the property market correct. Based on flash estimates released by the Urban Redevelopment Authority (URA) yesterday, prices of apartments in Singapore’s core central region, which includes the posh Orchard Road district popular with foreign investors, have risen by 49% since the end of the global financial crisis in 2009. In contrast, prices of homes outside the central region, which are areas more popular with ordinary Singaporeans on lower budgets, have increased by 70%. (Reuters)

China Manufacturing Growth Rate Slows. China has reported a slowdown in growth of its manufacturing sector, underlining concerns that its economic recovery continues to remain fragile. The official Purchasing Managers' Index (PMI), a key measure of manufacturing activity, fell to a four-month low of 50.1 in June, from 50.8 in May. Meanwhile a separate report by HSBC, which surveys smaller firms, said that manufacturing activity in the country fell to a nine-month low. HSBC said its PMI for China fell to 48.2 in June, down from 49.2 in May. (BBC)

Indonesia’s Inflation Hits 5.9%.Inflation accelerated in June after the government hiked the price of fuel for the first time since 2008, official data showed yesterday.  The increase had been expected after the price of fuel rose by up to 44 % last month, pushing up transport cost.  The consumer price index rose 5.9 % from a year earlier compared with 5.47 % in May, according to the Central Statistics Agency.  The price of petrol has gone up from 4,500 rupiah (RM1.46) to 6,500 rupiah a litre. A litre of diesel rose 22 % to 5,500 rupiah. (AFP)

USA

Factories Rebound In June, But Hiring Down. Manufacturing expanded last month, rebounding from an unexpected contraction in May, but hiring in the sector was the weakest in nearly four years, which could make the Federal Reserve think twice about how soon to scale back its stimulus. The Institute for Supply Management (ISM) said its index of national factory activity rose by slightly more than expected in June to 50.9 from 49, with a reading above 50 marking expansion. The gauge for new orders rose to 51.9 from 48.8, while production jumped to 53.4 from 48.6, helping the overall index bounce back from May's contraction - the first in six months. But a measure of employment fell to 48.7, the lowest reading since September 2009. It stood at 50.1 in May. (Reuters)

US Construction Spending Up 0.5 % In May. Spending on residential housing rose in May to the highest level in 4½ years, helping to send overall construction spending higher despite a big drop in nonresidential activity. Construction spending rose 0.5 % in May compared with April when spending was up 0.1 %, the Commerce Department said Monday. (AP)

Europe

Euro Zone June Manufacturing PMI Rises To 16-Month High Of 48.8. Manufacturing output in the euro zone improved in June to a 16-month high, a sign that the economy was stabilizing, albeit slowly. The euro zone June Purchasing Managers' Index for the manufacturing sector rose to a 16-month high of 48.8, up from the flash estimate of 48.7 and May's reading of 48.3. But the readings for individual countries revealed a more mixed picture. The data were particularly strong for Italy, where June manufacturing PMI rose to 49.1, the highest since July 2011 and Spain, where manufacturing PMI rose to 50 in June from 48.1 in May. French PMI also rose to 48.4 in June from 46.4 in May. A reading above 50 indicates an expansion, while a reading below indicates a contraction. However, German manufacturing activity contracted for the fourth consecutive month in June, coming in below expectations at 48.6. (CNBC)

Euro-Area May Unemployment Rate Rises To 12.1% Amid Recession. The euro-area jobless rate increased in May as the currency bloc struggled to emerge from a record-long recession, increasing pressure on its leaders and the European Central Bank to spur economic growth. The euro-area unemployment rate rose to 12.1 % from a revised 12 % in April, the European Union’s statistics office in Luxembourg said today. The median of 36 economists’ estimates in a Bloomberg News survey was for an increase to 12.3 % from the previously reported April level of 12.2 %. The number of jobless people in the euro area rose to 19.2 million in May, up 67,000 from the previous month. Youth unemployment was at 23.8 %. The jobless rate in Germany, Europe’s largest economy, fell to 5.3 %, while Spain had the highest May rate at 26.9 %. (Bloomberg)

UK Manufacturing Growth At Two-Year High, PMI Survey Shows. UK manufacturing saw its strongest growth in two years in June, according to a survey, boosting hopes of a strengthening economic recovery. The Markit/CIPS purchasing managers' index (PMI) rose to 52.5 last month - its highest level since May 2011. Any reading above 50 indicates growth in the sector. There was further positive news on Monday when Bank of England figures showed that mortgage approvals hit a three-and-a-half-year high in May. The Bank said 58,242 home loans were approved in May, the highest number since December 2009. (BBC)

Portugal's Finance Minister Quits. Portugal's Finance Minister Vitor Gaspar has resigned, the president's office has announced. The minister has been praised by international creditors for keeping a tight rein on Portuguese finances following the country's 2011 bailout. However, the country is still in recession with high unemployment, and recent figures showed the budget deficit widening in the first quarter. The president's office said Maria Luis Albuquerque would replace Mr Gaspar. In a resignation letter seen by the Reuters news agency, Mr Gaspar said the failure to hit public deficit and debt targets had undermined his credibility. (BBC)

Currencies

Dollar Rises Vs. Yen After Manufacturing Data. The U.S. dollar rose against the Japanese yen on  Monday after data showing improvement in U.S. manufacturing. While the dollar gained against the yen, the ICE  dollar index, which measures the U.S. unit against six other major currencies, on Monday slipped to 82.998 from 83.194 late Friday. The  dollar climbed to 99.64  yen from ¥99.26 in the previous session as the Institute for Supply Management’s index improved to 50.9% in June from 49.0% in May. Any number above 50 indicates expansion. The  euro traded at $1.3064, up from $1.3013. That rise was  helped along by an upward revision in the euro-zone PMI manufacturing index, but hampered slightly by a downward revision in Germany’s report. The British pound fetched $1.5215, little changed from $1.5206. The Australian dollar kicked off July on slightly stronger footing, buying 92.31 U.S. cents, up from 91.53 U.S. cents late Friday in North America. (Market Watch)

Commodities

Brent Drops Below $102 On Weak Chinese Factory Data. Brent crude slipped below $102 a barrel on Monday as weak data from China reinforced concerns of slower growth in the world's second-largest economy, dampening the outlook for oil demand. Brent crude dropped to as low as $101.63 a barrel after the Chinese data. The August contract was down 21 cents at $101.95 a barrel by 0423 GMT. Front-month Brent shed more than 7 % in the second quarter ended June, its third straight quarterly decline and the longest such stretch of losses in 15 years. U.S. crude fell 16 cents to $96.40 a barrel. (Reuters)

Gold Rebounds After Biggest Quarterly Drop On Record. Gold prices rose on Monday, rebounding after posting its biggest quarterly loss on record, as the dollar steadied ahead of a raft of data this week which traders hope will give more clues on the outlook for U.S. stimulus measures. Spot gold was up 0.3 % to $1,237.24 by 1412 GMT, well off Friday's near three-year low of $1,180.71. Silver turned negative after a steady start, down 0.4 % to $19.54 an ounce. It reached a near three-year low at $18.19 in the previous session. Platinum rose 1.8 % to $1,362.74 an ounce and palladium jumped 3.4 % to $678.22 an ounce. (Reuters)