Asia

Philippines To Allow Foreign Banks To Fully Own Local Lenders. Philippine President Benigno Aquino has signed into law a bill allowing foreign banks to take full control of local lenders, in line with the government’s push to strenghten the country’s capital and financial markets. The act replaces a cap of 60% on foreign ownership of Philippine lenders and abolishes restrictions that have allowed only 10 foreign banks to have fully owned operations in the country. The law, which comes ahead of an economic integration of South-East Asian nations in 2015, brings the Philippines in line with countries such as Australia and Japan which allow banks to be wholly owned by foreign firms. Tetangco said the new law will also make more financial resources available to the domestic banking market, pave the way for technology transfer and enhance human resource skills. (Reuters)

S. Korea Officials: Downside Risk To Growth Rising. South Korea’s top two economic policy officials have agreed that downside risks to growth were increasing but did not say whether they saw the economy as weak enough to warrant an interest rate cut. Finance Minister Choi Kyunghwan and Bank of Korea Governor Lee Juyeol also agreed to pursue “harmony between economic and monetary policies”, the two organisations said in a joint statement after their first meeting since Choi took office last week. Choi’s remarks last week calling for stimulus efforts to bolster Asia’s fourth largest economy sparked speculation among investors that the government wanted the central bank to lower interest rates. (Reuters)

China's First Mortgage Debt Since Crisis Shows Li Concern. China will revive mortgage-backed debt sales this week after a six-year hiatus, as the government extends help to homebuyers in a flagging property market. Postal Savings Bank of China Co., which has 39,000 branches in the country, plans to sell 6.8bil yuan ($1.1bil) of the notes backed by residential mortgages tomorrow, according to a July 15 statement on the website of Chinabond. The last such security in the nation was sold by China Construction Bank Co. in 2007, Bloomberg-compiled data show. (Bloomberg) USA

NABE Survey Points To Rising U.S. Wage Pressures. The share of U.S. companies raising wages more than doubled in the three months to July from a year ago, a survey showed on Monday, suggesting a faster pace of wage growth.The National Association for Business Economics' (NABE) latest business conditions survey found that 43 % of the 79 economists who participated said their firms had increased wages. That compared to only 19 % last year and marked an increase from 35 % in the three months to April. It was the first time since October 2012 that no respondents reported declining wages at their firms. The economists represented a broad spectrum of businesses, including goods-producing, transportation, finance and services industries. Forty % of the firms employ more than 1,000 people. (Reuters)

Europe

Merkel Budget Gets Double Boost In June On Revenue And ECB Rates. German Chancellor Angela Merkel’s budget got a double boost in June as federal tax revenue surged and low benchmark interest rates trimmed the cost of servicing debt, the Finance Ministry said in its monthly report. Federal tax revenue jumped 10.9 % in June compared with a year ago while spending declined by 0.4 %, the report showed today. State tax revenue grew by 19.6 %, helped by property transaction levies and inheritance tax. (Bloomberg)

Bundesbank Sees Second-Quarter German Stagnation, IMF Upbeat On Full Year. The German economy probably stagnated in the second quarter in the face of political tensions abroad, the Bundesbank said on Monday, but chances are its recovery will not be held up for long by conflicts on the rim of Europe. Highlighting the underlying strength of Europe's largest economy, the International Monetary Fund raised its forecasts for German growth, projecting an expansion of 1.9 % this year - up from the 1.7 % it had previously projected. The Fund said Germany should give further impetus to its economy, as well as supporting the broader euro zone, by increasing public investment - something the healthy state of its finances gave it leeway to do. The second quarter saw Europe's economic locomotive lose traction. Construction activity in April and May was below that of the mild winter months, the Bundesbank said. (Reuters)

Currencies

China Signs Currency Swap Worth 150 Bil Yuan With Switzerland. China signed a bilateral currency swap agreement worth 150bil yuan ($24.17bil) with the Swiss central bank, which can invest up to 15bil yuan in China's bond market. The three-year swap, signed on Monday, will "provide liquidity support for bilateral economic and trade exchanges and help maintain financial stability," the People's Bank of China (PBOC) said in a statement on its website, www.pbc.gov.cn. The swap deal will provide liquidity support for development of the offshore yuan market in Switzerland and will be extended if needed, the PBOC said. (Reuters)

Dollar Is Flat As Investors Weigh Turmoil In Gaza, Ukraine. The dollar was flat against most major currencies Monday as the effects of turmoil in Ukraine, Gaza and Iraq continue to buttress the price of the haven currency against the effects of weak U.S. housing starts data from last week, and doubts that the Federal Reserve will raise interest rates earlier than mid 2015. The yen reversed earlier gains against most major currencies, with the dollar buying ¥101.34, down a touch from ¥101.36 late Friday. The euro also slipped against the Japanese currency, trading at ¥137.04, from ¥137.12. The dollar rose slightly against the ruble, with the greenback buying 35.194 rubles Monday, compared with 35.159 Friday. In other currency crosses, the euro fell against the dollar to $1.3522 from $1.3529 on Friday. The pound also declined, trading at $1.7071, down from $1.7090. The ICE dollar index inched up to 80.5620 from 80.5260. (MarketWatch)

Commodities

Oil Firms On Ukraine Crisis; August WTI Spikes Before Expiry. Oil prices rose on Monday as the threat of escalating tension between Russia and the West over the crisis in Ukraine mounted, while August U.S. crude zoomed higher prior to its expiry. September Brent gained 44 cents to settle at $107.68 a barrel. Prompt U.S. oil for August delivery surged by $1.46 to settle at $104.59 a barrel, as traders raced to cover positions ahead of Tuesday's expiration. September WTI rose a more modest 91 cents to settle at $102.86 a barrel. (Reuters)

Gold Rises Above $1,300 On Heightened Tensions, S&P Drop. Gold rose above $1,300 an ounce on Monday as U.S. equities slipped and political tensions simmered after the shooting down of a passenger plane in eastern Ukraine last week and incessant fighting in Gaza. Spot gold was up 0.2% at $1,312.50 an ounce by 1:51 p.m. (1751 GMT). In other precious metals, platinum was up 0.1% at $1,483.10 an ounce. Palladium eased 0.3 % to $873.94 an ounce after initially rising on possible supply worries out of top producer Russia. Silver rose 0.4% to $20.92 an ounce. (Reuters)