Global
Quarter Of Europeans Impoverished, ILO Denounces Austerity. The United Nation's labour agency on Tuesday denounced "premature" austerity measures brought in by governments around the world during the financial crisis, saying they have hurt the world's most vulnerable people. Isabel Ortiz, director of social welfare of the International Labour Organisation (ILO), said that in 2014 alone at least 122 governments have cut public spending, including in 82 developing countries. In the European Union, where many states brought in swingeing budget cuts in response to the debt crisis, she estimated that as many as 123 million people – or a quarter of the bloc's population – were now classified as poor because of cuts in social protection. Now, more than 70% of the world's population is not adequately covered by social protection, the ILO said. In contrast, China, the world's second largest economy, has almost succeeded in rolling out universal pension coverage and has increased the wages of its lowest-paid workers. (AFP)
Asia
Japan Stimulus Exit Depends On Price. Bank of Japan (BoJ) governor Haruhiko Kuroda warned against prematurely discussing a strategy for withdrawing its massive stimulus programme, stressing that the priority now was to keep flooding markets with cash to meet the bank’s inflation target. He also called on the government to map out a credible growth strategy and take measures to boost Japan’s long-term growth potential, as improvements in the economy and an ageing population have led to labour shortages. (Reuters)
Optimism Over China Economy. China’s factory and services sectors had their best showings in months in May as demand rebounded, surveys showed, fuelling optimism that its economy may be steadying after a weak start to the year. The final HSBC/Markit Purchasing Managers’ Index (PMI) rose to 49.4 in May, a four-month high and compares with April’s 48.1. The buoyancy was mirrored by a similar acceleration in growth in the services sector, where a government-released PMI climbed to a six-month high of 55.5, from April’s 54.8. (Reuters)
Reserve Bank Of India Leaves Key Rate Steady At 8%. India's central bank on Tuesday left its key interest rate steady at 8 %, following its first meeting after a landslide election win for the Bharatiya Janata Party (BJP). In a statement, the Reserve Bank of India (RBI) said further policy tightening would not be warranted if the economy continues on a disinflationary path. At the same time, the RBI took steps to raise the availability of credit, reducing the mandatory amount of bonds lenders must park with the central bank - called the statutory liquidity ratio - by 50 basis points to 22.5 % of deposits from mid-June. The RBI has raised interest rates three times since September to help contain inflation. (CNBC)
USA
US Factory Orders Increase For Third Straight Month. New orders for U.S. factory goods rose for a third straight month in April, pointing to strength in manufacturing and the broader economy. The Commerce Department said on Tuesday new orders for manufactured goods increased 0.7 %. March's orders were revised to show a 1.5% increase instead of the previously reported 0.9 % rise. Economists polled by Reuters had forecast new orders received by factories gaining 0.5 %. (Reuters)
U.S. May Car Sales Jump To 1.6 Million, Beating Expectations. Automakers on Tuesday reported higher-than-expected U.S. new car sales of 1.6 million in May, with rising consumer demand underpinning a broader recovery in the U.S. economy. The auto industry in May recorded its strongest annual sales rate since before the 2008 recession, as transaction prices remained strong and discounts did not increase. Industry sales rose 11.3 % to 1,606,264 vehicles, according to a compilation of manufacturers' results by Reuters. The annual sales rate in May hit 16.77 million vehicles, the strongest pace since it reached the same level in February 2007, according to research firm Autodata. Economists polled by Reuters had expected a rate of 16.1 million. (Reuters)
Europe
Eurozone Inflation Rate Fall Adds To Pressure On ECB. Eurozone inflation fell to 0.5% in May, down from 0.7% in April and well below the European Central Bank's 2% target. The fall means the ECB will be expected to take steps to boost growth and counter the threat of deflation when it meets on Thursday. Figures from EU statistics office Eurostat also showed that the eurozone unemployment rate fell slightly to 11.7% in April from 11.8% in March. The drop means 18.75 million were unemployed in April. In total, the number of people unemployed fell by 76,000 between March and April. There were wide variations across the eurozone. Austria had the lowest unemployment rate at 4.9%, closely followed by Germany with 5.2%. In Greece, unemployment was 26.5% in February, while Spain had a 25.1% unemployment rate. (BBC)
Currencies
Dollar Falls Vs. Rivals. The dollar inched down against major rivals Tuesday as investors looked ahead to a European Central Bank meeting that is likely to bring additional easing, which could support the case for dollar strength in the longer run. The euro rose to $1.3628 from $1.3598 late Monday. The ICE dollar index , a gauge of the greenback’s strength against six other currencies, fell to 80.535 from 80.634 late Monday. The pound was little changed, exchanging hands at $1.6749 versus $1.6747 late in the prior session. The Australian dollar moved up to 92.66 U.S. cents from 92.46 U.S. cents late Monday. The dollar rose to 102.52 yen from ¥102.38 late Monday. (Market Watch)
Commodities
Brent Steady, U.S. Crude Rises As Data Offers Support. Brent crude steadied and U.S. crude erased earlier losses to push higher on Tuesday as economic data from the United States and China supported prices that have been under pressure recently because of increasing global oil production. Brent July crude fell 1 cent to settle at $108.82 a barrel. Brent ended above its 50-day moving average of $108.56 after sliding earlier to $108.32, two cents above its 100-day moving average. U.S. July crude rose 19 cents to settle at $102.66, reaching $102.86 at 5 p.m. EDT (2100 GMT)in postsettlement trading. (Reuters)
Gold Snaps Five-Day Decline As Stock Markets Turn Weaker. Gold prices rose for the first time in six days on Tuesday as stock markets beat a retreat after a series of record highs on Wall Street. By 3:45 p.m. EDT (1945 GMT), the spot price of bullion was a touch higher than Monday's close, trading 0.1 % up at $1,245.68 an ounce. Among other precious metals, platinum slid 0.3 % to $1,425.53 an ounce. Palladium rose 0.7 % to $834.80 an ounce amid news that striking mine employees in major producer South Africa were considering a government offer to end a five-month work stoppage. Silver climbed 0.4 % to $18.78 an ounce. (Reuters)