Asia

Jakarta Revises Fiscal Deficit Target To 2.4pc. Indonesia’s fiscal deficit target has been narrowed to 2.4 % of gross domestic product (GDP) in a revision of the 2014 budget approved by a committee late on Friday, the finance minister said, from 2.51 % proposed earlier. The deficit figure is 42 % higher than the 1.69 % fiscal deficit targeted in the original 2014 budget for Southeast Asia’s largest economy. The adjustments are needed to account for changes to Indonesia’s macroeconomic assumptions — specifically a slower growth forecast, lower crude oil output and weaker rupiah exchange rate that has faced pressure from a yawning trade deficit and current account. The deficit has declined to 241.49 trillion rupiah from a 251.72 trillion rupiah forecast, Finance Minister Chatib Basri said. The latest figure is 38 % higher than the deficit of 175.4trillion rupiah set in the original 2014 budget. (Reuters)

Abe Plans Corporate Tax Cut In 2015 As Kuroda Warns On Finances. Japan’s Prime Minister Shinzo Abe said he aims to start cutting corporate taxes in 2015, reaching agreement with senior lawmakers on a core part of his agenda as the central bank kept up pressure for sustainable finances. Abe, speaking to reporters in Tokyo yesterday after a meeting with Finance Minister Taro Aso and Economy Minister Akira Amari, said the plan would bring the rate under 30 % in a few years. He said other revenue sources will be secured for the move, which requires approval from the Diet. After holding policy at yesterday’s meeting, Kuroda stressed the need for the government to put its finances on a healthy footing. “It’s an essential precondition for sustainable growth of the Japanese economy to establish a sustainable fiscal structure,” Kuroda told reporters. The BOJ “strongly hopes” for steady implementation of steps toward fiscal consolidation, he said. (Bloomberg)

Bank Of Japan Keeps Monetary Policy Unchanged. The Bank of Japan (BOJ) kept monetary policy steady on Friday and revised up its assessment on overseas economies, signalling confidence that the country can meet its price target without additional stimulus. As expected, the central bank voted unanimously to maintain its pledge of increasing base money, its key policy gauge, at an annual pace of 60-70 trillion yen ($590-$688 billion). The BOJ also maintained its view on the domestic economy, noting it continues to recover at a moderate pace. (CNBC)

China Industrial Output Climbs 8.8%, Matching Forecasts. China’s industrial output and retail sales increased at a faster pace in May, adding to evidence that Premier Li Keqiang’s support measures are stabilizing the world’s second biggest economy. Factory production rose 8.8 % in May from a year earlier, the National Bureau of Statistics said in Beijing today, up from 8.7 % in April. Retail sales increased 12.5 % and January-May fixed-asset investment growth was little changed at 17.2 %. (Bloomberg)

North America

Wholesale Prices In U.S. Unexpectedly Decreased In May. Wholesale prices in the U.S. unexpectedly fell in May, suggesting demand isn’t robust enough to push inflation closer to the Federal Reserve’s target. The 0.2 % decrease in the producer price index compared with the median estimate in a Bloomberg survey of 71 economists that called for a 0.1% gain. Over the past 12 months, costs climbed 2 %, figures from the Labor Department showed today. (Bloomberg)

U.S. Consumer Sentiment Slips In June. U.S. consumer sentiment fell in June as views by consumers with the lowest incomes soured, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary June reading on the overall index on consumer sentiment came in at 81.2, down from 81.9 the month before. It was below the median forecast of 83.0 among economists polled by Reuters. "The change from May was too small to indicate a significant loss in sentiment," survey director Richard Curtin said in a statement. (Reuters)

Canada April Factory Sales Post Surprise Decline. Canadian factory sales unexpectedly fell for the first time in four months in April on reduced production of petroleum and aircraft. Sales fell 0.1 % to C$50.9 billion ($46.8 billion), Statistics Canada said today in Ottawa. Economists forecast a 0.5 % increase according to the median of a Bloomberg survey with 15 responses. (Bloomberg)

Europe

Euro Zone Employment Rises, Trade Surplus Grows. Euro zone employment rose for the second consecutive quarter in the first three months of the year in a sign the recovery was finally helping the labor market and a widening trade surplus signaled a further positive contribution to growth in April. The number of persons employed in the 18 countries sharing the euro rose by 0.1 % on the quarter in the three months to March and was up by 0.2 % on the year, the first annual rise since third quarter of 2011, the European Union's statistics office said. Separately, data showed that net trade made a positive contribution to growth in April as the trade surplus increased to 15.7 billion euros ($21.38 billion), from 14.0 billion in the same period of 2013. The higher surplus was mainly because imports, down 3 % year-on-year, slowed more than exports, which fell only 1 % in April on a non-seasonally adjusted basis. Economists polled by Reuters had expected the trade surplus to narrow to 13.9 billion euros in April from the originally reported 17.1 billion surplus in March. (Reuters)

S&P Lifts Outlook On UK's Top Credit Rating, But Warns On EU Exit. Ratings agency Standard & Poor's upgraded its outlook on Britain's top-notch triple-A credit rating to stable from negative on Friday, but said this would be threatened if Britain decided to leave the European Union. S&P, the only major ratings agency to retain a triple-A rating on British  sovereign debt, said its outlook upgrade meant there was now a less than one-in-three probability that Britain will lose its top credit rating within the next two years. Fitch Ratings earlier on Friday affirmed its "AA+" grade for Britain, one notch below its top rating. (Reuters)

Africa

South Africa Outlook Downgraded By Fitch. Credit ratings agency Fitch has warned South Africa that its credit rating may be lowered following a five-month platinum strike in the country. Fitch was followed by Standard & Poor who also downgraded their rating. Fitch changed the country's outlook from stable to negative, citing poor economic prospects and rising public debt. Its economy contracted by 0.6% in the first quarter, in part because of a fall in platinum production. However, unions said a platinum miners' wage deal was on the horizon. Fitch kept South Africa's credit rating at BBB, but raised concerns about a poor economic growth outlook and persistent budget shortfalls. (BBC)

Currencies

Pound Nears $1.70 On Prospects Of Rate Hike. The pound surged Friday after Bank of England Gov. Mark Carney said tightening could come before markets currently expect it, propelling the currency to a run on $1.70. The pound jumped to $1.6968 from $1.6906 late Thursday. The pound also jumped against the euro, fetching €1.2537 from €1.2497 late Thursday. The ICE dollar index, a gauge of the greenback’s strength against six other currencies, rose to 80.632 from 80.563 late Thursday. The dollar rose to ¥101.02 from ¥101.65 late Thursday. The Australian dollar inched down to 93.99 U.S. cents from 94.27 U.S. cents late Thursday. The euro fell to $1.3535 from $1.3557. (Market Watch)

Commodities

Oil Prices Climb Again Amid Escalating Violence In Iraq. Crude oil prices rose to new nine-month highs on Friday as concerns persisted that an insurgency in Iraq could disrupt oil exports from the second-largest OPEC producer. Brent futures gained 39 cents to settle at $113.41 per barrel, the highest since Sept. 9. U.S. crude oil gained 38 cents to settle at $106.91 per barrel, the highest level since Sept. 18. (Reuters)

Palladium Hits 1-Month Low On Wage Deal Hopes; Gold Up. Palladium tumbled to a one-month low on Friday, extending its biggest drop in nearly a year in the previous session, as investors awaited confirmation that South Africa's longest mining strike would end soon. Palladium was down 1.2 % to $812 an ounce by 3:11 p.m. EDT (1911 GMT), having touched its lowest since May 16 earlier. The metal lost about 3.5 % for the week, its biggest decline since January. Platinum fell 0.4 % to $1,428.50 an ounce. It had lost almost 3 % on Thursday in its biggest daily drop since June 2013. Spot gold was up 0.2 % at $1,275.39 an ounce. Silver rose 0.7 % to $19.63 an ounce. (Reuters)