Global

IMF Warns Banking Reform Has Not Made Enough Progress. Banking reforms aimed at preventing another financial crisis have failed to make enough progress, the boss of the International Monetary Fund has warned. IMF managing director Christine Lagarde blamed a combination of the complexity involved, industry lobbying and "fatigue" for the delay. "The industry still prizes short-term profit over long-term prudence," Ms Lagarde said at a conference on the future of capitalism. She said inequality was "an issue" too. "To the extent that inequality is not particularly supportive of sustainable growth, it's an issue and one that we have to look at carefully and try to address in order to maintain stability and sustainability of economies," she said. (BBC)

Developing Countries See Swelling Middle Class. Workers in developing countries are increasingly moving to better jobs and joining the middle class, but 839 million workers still earn less than US$2.00 a day, the International Labour Organization said. "The developing countries are generally in a process of catching up with the advanced economies," ILO chief Guy Ryder told reporters in Geneva. Today, more than four in 10 workers in such countries are considered to be in the so-called "developing middle class" up from fewer than two in 10 two decades ago, it said. In its analysis of the situation in 140 developing and emerging economies, the ILO concluded that nations that tackled working poverty, invested in creating quality jobs and in getting workers out of precarious employment had weathered the global financial crisis far better than those that did not. "Many developing countries, notably in Latin America and Asia, are making efforts to tackle inequalities and improve job quality as well as social protection," lead author of the ILO report Moazam Mahmood said. "By contrast," he said, "a number of advanced economies, notably in Europe, seem to be going in the opposite direction." (AFP)

Asia

Japan Foreign Assets Hit Record US$3.2tril As Top Creditor Nation. Japan's net external assets rose to a record 325 trillion yen (US$3.2tril) as of the end of last year as a weak yen boosted the value of overseas holdings, making the country the world's biggest creditor nation for 23 years in a row, the finance ministry said. The value of net assets held by the Japanese government, businesses and individuals exceeded the previous year's 296 trillion yen, which was a record under comparable data going back to 1996, ministry officials said. Japan's net external assets were more than 1.5 times those held by China, the world's No 2 creditor nation with 207 trillion yen in net assets at the end of 2013, followed by Germany whose assets hit 192 trillion yen, the ministry said. (Reuters)

USA

Consumer Confidence Advances To Second-Highest Since 2008. Confidence among U.S. consumers rose in May to the second-highest level since 2008 as Americans grew more upbeat about the economy and labor market. The Conference Board’s index climbed to 83 from 81.7 a month earlier that was weaker than initially estimated, the New Yorkbased private research group said today. The reading matched the median forecast in a Bloomberg survey of 62 economists. (Bloomberg)

Durable Goods Orders Jump, But Capital Spending Sags In April. Orders for long-lasting U.S. manufactured goods unexpectedly rose in April, but a drop in a measure of business capital spending plans could temper expectations for a sharp rebound in economic growth this quarter. The Commerce Department said on Tuesday durable goods orders increased 0.8 % as demand for defense capital goods surged and orders for fabricated metal products, transportation equipment and electrical equipment, appliances and components rose. Economists polled by Reuters had forecast durable goods orders falling 0.5 % last month after a previously reported 2.5 % rise in March. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 % after rising by a revised 4.7 % in March, which was the largest gain since November. (Reuters)

US Services Sector Expands At Faster Pace In May. The U.S. services sector expanded in May at its fastest rate since March 2012 as employment creation accelerated, an industry report showed on Tuesday. Financial data firm Markit said its "flash" services Purchasing Managers Index hit 58.4 in May compared with April's final reading of 55.0. A reading above 50 signals expansion in economic activity. The services sector added employees at the fastest rate since January, with the employment subindex at 53.1, up from 51.2 last month. New business growth for the services sector was at its fastest since February 2011. (Reuters)

Home Prices In 20 U.S. Cities Rise At Slower Pace In March. Home prices in 20 U.S. cities rose at a slower pace in the year ended in March as the housing market began to weaken at the start of 2014. The S&P/Case-Shiller index of property values increased 12.4 % from March 2013, the smallest 12-month gain since July, after rising 12.9 % in the year ended in February, a report from the group showed today in New York. (Bloomberg)

Europe

U.K. Service Industries See Optimism Climbing To Record. U.K. services companies’ confidence rose to a record this quarter, indicating continued expansion in the largest part of the economy, the Confederation of British Industry said. An index of optimism at consumer businesses such as restaurants and hotels jumped to 53 from 43, the highest since the survey began in 1998, the business lobby group said today. A gauge of sentiment at professional services firms -- such as accountants and legal companies -- increased to 54, also a record. (Bloomberg)

Currencies

Dollar Inches Down Vs. Euro, Hovers Near ¥102. The dollar inched down against the euro Tuesday as investors continued to speculate whether inflation in the euro zone was weak enough to spur further easing from the European Central Bank in June. The euro was at $1.3635 versus $1.3630 late Friday. The dollar was little changed at ¥101.96 versus ¥101.97 late Friday, giving up earlier gains that pushed the pair to a two-week high above ¥102. The dollar index, a measure of the currency’s strength against six rivals, was at 80.346 versus 80.374 late Friday. Elsewhere, the British pound fell to $1.6812 from $1.6826 late Friday. The Australian dollar rose to 92.62 U.S. cents versus 92.32 U.S. cents late Friday. (Market Watch)

Commodities

Oil Slips On Profit Taking But Supported By Ukraine, Cushing. Crude oil futures edged lower on Tuesday as traders took profit after a long holiday weekend, with prices supported by violence in Ukraine and expectations for a draw on U.S. crude stocks at the Cushing, Oklahoma hub. The tumble pulled Brent and U.S. crude lower, with Brent settling 30 cents down at $110.02 a barrel. U.S. light crude oil settled 24 cents lower at $104.11 a barrel. U.S. gasoline fell 2.8 cents to $2.9952 a gallon. (Reuters)

Gold Slips 2 Pct On S&P Rally, Technicals. Gold fell 2 % on Tuesday, the most in one day since December, as an intraday record high of the S&P 500 equities index and economic optimism triggered a heavy bout of technical selling. Spot gold fell 2 % to its lowest since Feb. 7 at $1,264.05 an ounce in earlier trade and was down 2 % at $1,266.75 an ounce by 3:02 p.m. EDT (1902 GMT), marking its worst daily loss since Dec. 19. Among other precious metals, platinum fell 1 % to $1,456.80 an ounce after new South African mining minister Ngoako Ramatlhodi pledged to mediate in a mines strike now in its fifth month. Palladium rose 0.2 % to $831.25 an ounce and silver fell 1.8 % to $19.06 an ounce. (Reuters)