Asia 

ADB Lowers Forecast For Developing Asia. The Asian Development Bank (ADB) said on Tuesday it has lowered its growth forecasts for developing Asia this year and the next as a softer outlook for the world's second-biggest economy  China meant subdued economic activity elsewhere in the region. The bank lowered its growth forecast for developing Asia by 0.3 %age points to 6.3% in 2013 and 6.4%  in 2014, the Manila-based development lender said in a supplement to its Asian Development Outlook 2013 first released in April. It cut its growth estimates for China by 0.5 %age points to 7.7% and 7.5% this year and the next, with data showing investment growth slowed in May and is expected to  weaken further with financial institutions becoming more averse to risk following turbulence in its domestic inter-bank money market. (Reuters)

China’s Treasuries Holdings Hit Record As Investors Sell. China’s holdings of U.S. Treasuries (BUSY) rose to a record in May even as net selling by private foreign investors in notes and bonds reached an all-time high, government data showed. China stayed the biggest foreign owner of Treasuries as its holdings increased by $25.2 billion to $1.316 trillion, according to Treasury Department data released yesterday in Washington. Japan, the second-largest holder, cut its holdings to $1.11 trillion. The net long-term portfolio investment outflow was $27.2 billion after a revised decline of $21.8 billion the prior month. (Bloomberg)

China Adds 7.25m Jobs In First Half. China added 7.25 million jobs in the first half of this year, slightly higher than the number created in the same period a year earlier, the Xinhua news agency said yesterday. Its report quoted Yin Weimin, minister of human resources and social security, as also saying that the services sector will play a big role in absorbing new labour, as each %age point of growth will create 700,000 jobs. More efforts will be made to create jobs in services as well as emerging businesses and the private sector, Yin had said. (Reuters)

China To Avoid ‘Wide Fluctuations’ In Economy, Li Says. Chinese Premier Li Keqiang said the nation will seek to keep economic growth, employment and inflation within limits, avoiding “wide fluctuations,” without elaborating on what the government deems acceptable. China should also develop a “scientific macroeconomic policy framework” to offer markets “stable predictability,” Li told a forum of advisers and executives yesterday, according to a summary of the event published on the government’s website. (Bloomberg)

USA 

Consumer Prices In U.S. Rise More Than Forecast On  Fuel. The cost of living in the U.S. rose in June by the most in four months as gasoline prices increased, a sign inflation is advancing toward the Federal Reserve’s goal. The consumer-price index increased 0.5 % after a 0.1 % gain the prior month, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey called for a 0.3 % rise. The biggest advance in gasoline prices in four months accounted for about two-thirds of the gain the in the CPI. The core measure, which excludes food and fuel, rose 0.2 %, matching the May gain and the survey median. (Bloomberg)

Homebuilder Confidence In U.S. Increases More Than Forecast. Homebuilder confidence in the U.S. rose more than forecast in July to the highest since January 2006 as companies grew more upbeat about sales prospects. The National Association of Home Builders/Wells Fargo index of builder sentiment climbed to 57 this month from a revised 51 in June, the Washington-based group reported today. The reading surpassed all but one forecast in a Bloomberg survey of 49 economists. The gauge has climbed 13 points in the latest two months, the biggest back-to-back advance since January-February 1992. (Bloomberg)

Industrial Output In U.S. Rises By Most In Four Months. Assembly lines in the U.S. churned out more automobiles and computers in June, pointing to a rebound in manufacturing that will help the world’s largest economy strengthen in the second half of 2013. Output at factories, mines and utilities climbed 0.3 %, the biggest advance since February, after being little changed in May, according to Federal Reserve data issued today in Washington. Another report showed homebuilders this month were the most confident in seven years. (Bloomberg)

Europe

UK Inflation Rate Rises To 2.9% In June. The rate of consumer price index (CPI) inflation increased to 2.9% in June, up from 2.7% in May, according to the Office for National Statistics (ONS). The figure, a 14-month high, was lower than the 3% expected by markets. A rise in the inflation rate had been anticipated because of higher petrol and clothing prices versus a year ago. But it was moderated by slower annual rises in airfares and food prices. Retail prices index (RPI) inflation also rose, to 3.3% from 3.1% in May. (BBC)

Eurozone Employment Picture Bleak, Says OECD. Young workers in the eurozone will continue to suffer from high unemployment rates, the Organisation for Economic Co-operation and Development (OECD) has warned. In its yearly Employment Outlook, it also said many elderly workers face financial pressures and the closure of access to early retirement schemes. And it said the low-skilled around the world would struggle to find work. The report highlighted the disparity in jobless levels around the eurozone. The OECD said the eurozone jobless rate would be 12.3% by late 2014, but that whereas the rate in Germany was set to drop below 5%, in Greece and Spain it would be about 28%. The current jobless rate in the eurozone bloc is 12.2%. (BBC)

European Car Sales Suffer Worst June Total Since 1996. New car sales in Europe suffered their worst June since 1996 with demand falling to 1.134 million vehicles, down 5.6% from the same month last year. It brought sales for the first half of the year to 6.205 million cars, a 6.6% fall, the carmakers' body ACEA said. The UK was the only major car market to expand, with sales up 13.4% in June and 10% for the six months. European car sales have seen an almost uninterrupted fall for two years, due mainly to recession in the eurozone. (BBC)

Poland To Relax Budget And Fiscal Rules To Stimulate Economy. Poland’s government, facing the slowest economic growth since the 1990s, unveiled plans today to widen the budget deficit by 16 billion zloty ($4.95 billion) and suspend rules limiting fiscal stimulus. Budget revenue will fall about 24 billion zloty ($7.4 billion), or 8 %, short of the 2013 plan as economic growth slows amid eroding consumer confidence and a euro-region crisis that proved “more protracted than expected,” Finance Minister Jacek Rostowski told reporters at a news conference in Warsaw. The government seeks more than 8 billion zloty in extra spending cuts, lowering the country’s structural deficit even as this year’s budget shortfall widens, he said. (Bloomberg)

Currencies

Dollar Falls As Investors Await Bernanke Testimony. The U.S. dollar fell against major rivals on Tuesday as investors speculated about Federal Reserve Chairman Ben Bernanke’s two-day testimony to Congress that begins Wednesday. The ICE dollar index, which tracks the greenback against six rivals, fell to 82.599 from 83.036 late Monday in North America. The  euro exchanged hands at $1.3142 on Tuesday, higher than late Monday’s $1.3065. The British pound edged higher to $1.5115 from $1.5099. The Australian dollar soared about 1.5% to 92.39 U.S. cents from 91.01 cents late Monday. The dollar fell to 59.202 rupees Tuesday, down from Monday’s 59.89 rupees. Elsewhere in Asia, the dollar fell to 99.21 Japanese yen  on Tuesday from ¥99.74 late Monday. (Market Watch)

Commodities

Brent Rises As U.S. Gasoline Hits 4-Month High. Brent crude edged higher on Tuesday as U.S. gasoline surged to four-month highs due to refinery problems during summer driving season and rising prices for ethanol credits. Brent crude for August traded up 31 cents to settle at $109.40 a barrel, the highest settlement since April 2.  U.S. crude oil closed down 32 cents at $106.00 a barrel. (Reuters)

Gold Up As Stable CPI Eases Stimulus Tapering Fears. Gold rose on Tuesday as signs of stabilizing U.S. inflation pressures suggested the Federal Reserve is on track to start tapering its bond purchases later this year rather than imminently. Spot gold rose 0.7 % to $1,290.56 an ounce by 2:40 p.m. EDT (1840 GMT). Silver rose 0.1 % to $19.91 an ounce, while palladium was up 0.7 % to $733.25 an ounce. Platinum eased 0.1 % to $1,420.49 an ounce after data showed the European auto market was very weak in June. (Reuters)