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Ft.com
A Chinese purchasing managers’ index fell below 50 for July, the first time since March 2009, Bloomberg reports. The early estimate, based on a survey by HSBC and Markit Economics, was down to 49.4 from 50.4 in June. http://ftalphaville.ft.com/thecut/2011/07/21/629581/chinas-july-pmi-below-50/

Building society Nationwide’s (UK) consumer confidence index fell by four points to 51, following an 11 point rise in May, which was one of the largest jumps on record, Reuters says. The figure for June remained above February’s all-time low of 41 points http://ftalphaville.ft.com/thecut/2011/07/21/629561/consumer-confidence-fell-in-june/

Lord Rothschild, chairman of London-listed RIT Capital Partners is working on a new private equity fund that will raise renminbi in China and invest it overseas, the FT says. The fund, J. Rothschild Creat Partners http://ftalphaville.ft.com/thecut/2011/07/21/629531/rothschild-to-launch-china-offshore-fund/

The IMF says a substantial appreciation of the Chinese renminbi would have little effect on trade and growth in the rest of the world even if accompanied by other economic liberalisation, the FT reports. In its annual report on the Chinese economy,  http://ftalphaville.ft.com/thecut/2011/07/21/629441/stronger-yuan-wont-help-us-says-imf/

Germany and France appeared to settle their differences late on Wednesday over a new rescue package for Greece, the FT reports. No immediate details were available but a spokesman Angela Merkel, the German chancellor http://ftalphaville.ft.com/thecut/2011/07/21/629396/germany-and-france-find-common-ground-on-greece/

The White House said it was open to a short-term increase in the US borrowing limit to give “a few more days” for negotiations over a broad fiscal package, the FT reports. “If both sides agree to something significant, http://ftalphaville.ft.com/thecut/2011/07/21/629391/obama-signals-readiness-for-short-term-deal/

The US earnings season helped bolster the rally in riskier assets after Apple joined IBM in delivering better than expected results, reports the FT’s global market overview. The FTSE All-World index was up 0.7 per cent http://ftalphaville.ft.com/thecut/2011/07/20/629356/us-earnings-and-debt-hopes-propel-rally-2/

George Osborne has urged eurozone leaders to “get a grip” on the sovereign debt crisis at their summit today, warning that failure to do so could unleash an economic crisis as serious as the recession that followed the banking crash of 2008. The chancellor told the Financial Times he was “very worried” about the possibility of the eurozone crisis spiralling out of control, warning that it posed an additional threat to Britain’s already “tough” economic situation. http://www.ft.com/intl/cms/s/0/e357fe94-b2ec-11e0-86b8-00144feabdc0.html#axzz1ScNZAlhf

Brazil’s central bank has raised interest rates for the fifth time this year as the country battles inflation above official target levels. Brazil on Wednesday raised its benchmark Selic rate by 25 basis points to 12.50 per cent, in line with economists’ forecasts, to try to quell inflation that reached 6.75 per cent in the 12 months to mid-July. http://www.ft.com/intl/cms/s/0/8b7a2e12-b324-11e0-9af2-00144feabdc0.html#axzz1ScNZAlhf

Wsj.com
Asian stock markets were mixed in choppy trade Thursday as the market tried to balance optimism that European leaders would announce a new bailout package for Greece at Thursday’s European Union summit with uncertainty over whether the $3.7 trillion bipartisan Senate plan announced in the U.S. Tuesday can get approval from both sides of Congress. Japan’s Nikkei Stock Average fell 0.1%, Australia’s S&P/ASX 200 rose 0.5%, South Korea’s Kospi Composite fell 0.3% and New Zealand’s NZX-50 added 0.3%. Dow Jones Industrial Average futures were up 14 points in screen trade. http://online.wsj.com/article/SB10001424053111903554904576458903862301620.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery. Cisco Systems Inc., Lockheed Martin Corp. and troubled bookstore chain Borders Group Inc. are among those that have recently announced hefty cuts, while recent government numbers underscore how companies have shifted toward cutting jobs. The increase in layoffs is a key reason why the U.S. recorded an average of only 21,500 new jobs over the past two months, far below the level needed to bring down unemployment, which now stands at 9.2%.  http://online.wsj.com/article/SB10001424053111903461104576458322987900468.html?mod=WSJ_hp_LEFTTopStories

From closing lackluster branches to moving employees to cheaper cities, U.S. banks and securities firms are intensifying efforts to cut costs as the sluggish economy, weak loan demand and new regulations eat into profits. “Until we see sustainable, repeatable growth in revenue, we’re going to continue to be very careful on our expenses and be very watchful, so that’s one thing you don’t have to worry about with this company,” U.S. Bancorp Chairman and Chief Executive Richard Davis said Wednesday. http://online.wsj.com/article/SB10001424053111904233404576458472190350358.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Apple Inc. has built up a $76.2 billion cash hoard. Now the question is what the company intends to do with the money pile. On Tuesday, the Cupertino, Calif., company disclosed cash, including short-term and long-term marketable securities, for the quarter ended June 25 increased 15.8% since March to $76.2 billion. That’s more than the gross domestic product of 126 countries, including nations such as Ecuador, Bulgaria, Sri Lanka and Costa Rica, according to data from the World Bank. http://online.wsj.com/article/SB10001424053111904233404576458452104540940.html?mod=WSJAsia_hpp_LEFTTopStories

Japan posted a surprise ¥70.7 billion ($897.4 million) trade surplus in June, Finance Ministry data showed Thursday, the first positive reading in three months as the country’s export-dependent economy continues to recover from the March 11 disasters. The figures confirm public-sector and private economist views that major companies are recovering more quickly than expected from the supply-chain disruptions that ricocheted across the economy following the earthquake, tsunami and ensuing nuclear power plant crisis. http://online.wsj.com/article/SB10001424053111903554904576458763722323114.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Marketwatch.com
China isn’t manipulating the prices of rare-earth minerals and it’s a “misunderstanding” that the rise is caused by the government, Ministry of Industry and Information Technology spokesman Zhu Hongren said Thursday. Zhu told reporters that the resurgence in prices was “reasonable” as prices had been too low earlier. http://www.marketwatch.com/story/china-denies-manipulating-rare-earth-prices-2011-07-21

Reuters.com
Spot gold hovered around $1,600 on Thursday, with investors waiting for a euro zone summit on Greece’s debt crisis while concerns around the U.S. debt ceiling talks continued to support sentiment. A failure will push gold back into overdrive with upside technical targets around $1,640-$1,650 and then $1,700.” Spot gold edged up 0.1 percent to $1,602.31 an ounce by 0341 GMT, after rising nearly 0.8 percent in the previous session. Gold hit a record of $1,609.51 on July 19. U.S. gold gained 0.4 percent to $1,602.70. http://www.reuters.com/article/2011/07/21/us-markets-precious-idUSTRE7592IU20110721

The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday. Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2. http://www.reuters.com/article/2011/07/20/us-usa-debt-fed-idUSTRE76J6IT20110720

State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents. A coalition of all 50 states’ attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks. http://www.reuters.com/article/2011/07/20/us-foreclosure-banks-immunity-idUSTRE76J7J820110720

Bloomberg.com
The Monetary Authority of Singapore posted a record loss of S$10.9 billion ($9 billion) in the year through March as the strength of its currency depleted the value of investments. The loss is the second in the central bank’s 40-year history, Managing Director Ravi Menon said at a press conference today, even after an investment gain of S$12.3 billion for the period. The Monetary Authority, also known as the MAS, reported a net loss of S$9.2 billion in the year through March 2009. http://www.bloomberg.com/news/2011-07-21/singapore-central-bank-posts-record-loss.html

Singapore’s central bank raised its inflation estimate and pledged to remain vigilant against risks to growth, saying the economy may expand in the lower half of its forecast range. Consumer prices may climb 4 percent to 5 percent in 2011, higher than a previous estimate of 3 percent to 4 percent, Ravi Menon, the managing director of the Monetary Authority of Singapore, said at a press briefing in the city state today. He reiterated a prediction for an expansion in gross domestic product of 5 percent to 7 percent. http://www.bloomberg.com/news/2011-07-21/singapore-raises-inflation-forecast.html

Asian cuisine may be too much of a good thing for some of the region’s central banks as policy makers grapple with the challenge of responding to spikes in the cost of staples from rice and pork to onions and chilies. Pork prices jumped 57 percent in June in China, leading Premier Wen Jiabao to vow to curb inflation even as growth slows. India had to buy onions from arch-rival Pakistan this year for curries and Indonesia told spice lovers to grow their own chili as shortages stoked prices. A wider variety of diet and greater purchasing power for non-food items leave wealthier nations less vulnerable to food-cost spikes. http://www.bloomberg.com/news/2011-07-20/rice-prices-up-70-make-asian-inflation-tough-for-central-banks-to-digest.html

Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices. The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month. The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor. http://www.bloomberg.com/news/2011-07-21/consumers-in-u-s-relying-on-credit-as-inflation-erodes-incomes.html

Nytimes.com
BlackRock, the world’s largest asset manager, has found a way to profit from those concerns, helping drive its double-digit revenue and profit gains. On Wednesday the company reported that earnings rose 25 percent, to $578 million, spurred by strong showings in most of its divisions. Revenue increased 16 percent, to $2.35 billion. The firm surpassed expectations with earnings of $3 a share. Analysts had been predicting $2.88 a share. http://dealbook.nytimes.com/2011/07/20/blackrock-profit-rises-25-to-578-million/?ref=global

Huffingtonpost.com
Eurozone leaders have been urged to “do what it takes” to ensure the stability of the single currency at emergency talks in Brussels on Thursday. The plea from European Commission (EC) president Jose Manuel Barroso reflects fears that speculators will pounce if the latest in a series of economic summits fails to restore euro credibility and halt “contagion” to other struggling member states, including Ireland, Portugal and Italy. http://www.huffingtonpost.co.uk/2011/07/20/eurozone-leaders-must-act_n_905012.html

Foxbusiness.com
China’s big trading partners worry that its rapid economic growth cannot be sustained and it could suffer a “hard landing” that spreads damage around the world, according to an IMF report released on Thursday. In its first China “spillover” report, designed to examine how domestic policies in major economies affect the rest of the world, the IMF said that allowing the yuan currency to rise more rapidly was important for global stability. http://www.foxbusiness.com/markets/2011/07/21/imf-chinas-trade-partners-worried-about-hard-landing/#ixzz1SiHSTf5b

Business confidence in Australia declined to a reading of 6 points in the second quarter, according to a survey from National Australia Bank out Thursday. That was below the 11 point reading recorded in the first quarter of 2011. “This outcome is likely to reflect the impact of the high Australian dollar, continued cautiousness of households and concerns about the global outlook on sentiment,” said the survey. The survey’s current business conditions indicator reached 3 points, up from 2 points in the first quarter.  http://www.foxbusiness.com/2011/07/20/australia-business-confidence-falls-to-6-pts-nab/#ixzz1SiHcAT5d

USAtoday.com
Sales of existing homes, including single-family homes, condominiums and townhouses, dropped 0.8% in June from May and 8.8% below June last year, when sales were boosted by federal tax credits, the National Association of Realtors reported Wednesday. The results were worse than forecast, underscoring that a variety of factors are weighing on the market, including the recent deterioration in the pace of the U.S. economic recovery. http://www.usatoday.com/money/economy/housing/2011-07-20-existing-home-sales-fall_n.htm

BBC.co.uk
Chinese state oil company CNOOC has agreed to buy Canadian oil sands producer OPTI for $2.1bn (£1.3bn). The deal – which must be approved by regulators – is the latest move by state-run Chinese firms to buy stakes in North American oil producers. Canada’s Alberta province is believed to have the third-largest reserves of oil in the world.  http://www.bbc.co.uk/news/business-14214771

Telegraph.co.uk
Inflation will peak higher and sooner than thought, but the UK’s weak economy means the Bank of England policymakers look even further away from raising interest rates, minutes for their latest meeting show. Rising utility and food bills have prompted the Bank’s Monetary Policy Committee (MPC) to raise its expectations for inflation as measured on the consumer prices index (CPI) gauge, according to the record of its July gathering. http://www.telegraph.co.uk/finance/economics/8649691/Inflation-spike-looms-but-bank-rate-not-on-cards-Bank-minutes-show.html

The UK banking sector is gearing up for a collision with Europe’s top financial regulator after it set out harsh new rules for the industry that could see banks fined as much as 10pc of their entire annual turnover if they don’t comply. Banks will be forced to hold more capital of a higher quality as part of the package of reforms, which will hand the EU sweeping powers to intervene in the financial system to prevent a future crisis. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8651166/UK-banks-set-to-clash-with-EU-over-tough-new-capital-rules.html

Britain must do more to stimulate an economy which is at a “near standstill”, according to the Organisation for Economic Co-operation and Development (OECD).  “Economic recoveries tend to be feeble after financial crises,” Pier Carlo Padoan, chief economist at the influential think-tank, wrote in Prospect magazine. “This is certainly the case in Britain.”  While he saw the Government’s planned spending cuts – £81bn over four years – as “appropriate”, he said more could be done to improve the UK’s prospects.  http://www.telegraph.co.uk/finance/economics/8650688/UK-economy-at-near-standstill-OECD-says.html

Mortgage lending rose to its highest level for nearly a year last month as landlord activity in the buy-to-let market picked up, figures showed on Wednesday. Gross mortgage lending totalled £12.8bn in June, up 16pc on the £10.8bn lent in May, and the highest in a month since July 2010, although the total was 3pc lower than June a year ago, said the Council of Mortgage Lenders (CML). Over the last three months, mortgage advances rose by 11pc to £33.5bn compared with the first quarter but was 3pc lower than the comparable three months in 2010. http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8650119/Mortgage-lending-jumps-as-buy-to-let-picks-up.html

Smh.com.au
Hopes of a resolution to the US debt impasse buoyed crude markets in Asia as traders awaited euro-zone crisis talks aimed at preventing a Greek financial meltdown, analysts said. New York’s main contract, West Texas Intermediate (WTI) light, sweet crude for September delivery, rose 28 cents to $US98.68 a barrel on its first trading day. Brent North Sea crude for delivery in September edged up nine cents to $US118.24.  http://www.smh.com.au/business/markets/crude-prices-gain-in-asia-20110721-1hpgr.html#ixzz1SiK0DuKa

Theglobeandmail.com
The debt crises gripping Europe and the United States have prompted the world’s biggest investors to broaden their search for havens in global bonds – and Canada is rising to the top of their list. Amid festering uncertainty in Europe and the United States, Canada is among a small list of sovereign debt issuers to benefit, as central banks, pension funds and other big money managers diversify their holdings away from some of the traditional foundations of global money markets – the U.S., the euro zone and Japan. http://www.theglobeandmail.com/globe-investor/foreign-investors-seek-haven-in-canada/article2104277/

Bank of Canada Governor Mark Carney is pledging a cautious approach to raising interest rates. The central banker said in a forecast Wednesday that the recovery is picking up steam, and a key measure of inflation will reach his 2-per-cent target much sooner than expected. But he quashed expectations for an aggressive tightening campaign, saying global risks like Europe’s debt crisis have intensified, and the strong dollar is holding back exporters’ sales prospects. http://www.theglobeandmail.com/report-on-business/economy/carney-vows-caution-on-raising-interest-rates/article2103426/

Xinhuanet.com
China’s top land authority said Wednesday that land supply for the nation’s affordable housing went up 24 percent in the first half of the year from the same period in 2010. The Ministry of Land and Resources announced that land supply during the period for affordable housing reached 16,477 hectares. To address the living issue of low and middle-income people in urban areas, the government plans to construct 10 million affordable housing units this year http://news.xinhuanet.com/english2010/china/2011-07/21/c_13998408.htm

Central China’s Hunan Province, a major rice grower in the country, has established an index on the production cost and sales price of rice, the first of its kind in China. The index gives a detailed calculation of the production cost as well as wholesale and retail prices of rice in the province since Jan. 2010, according to the Hunan Commodity Price Bureau, which manages the index. Experts say the rice index will help China, as one of the world’s major rice producers, setting rice prices on the international market. http://news.xinhuanet.com/english2010/business/2011-07/20/c_13998085.htm

Finnish Prime Minister Jyrki Katainen said on Wednesday that his country will not compromise in demanding guarantees for any new Greek bailout loan. According to Finnish media reports, Katainen said that the European economic situation is extremely difficult. Despite the seriousness of the situation, he stressed that Finland remains inflexible on the guarantees demanded for a new Greek bailout loan. http://news.xinhuanet.com/english2010/business/2011-07/21/c_13998524.htm

Thehindu.com
The common man will get no respite from rising prices for another six months, with the Government today saying that inflation, currently hovering above 9 per cent, will continue to remain high till December. “We expect moderation in inflation only in the last months of this year. Headline WPI monthly inflation is likely to remain relatively ‘sticky’ and persistently high between August-December, 2011…,” a Finance Ministry note said. Inflation stood at 9.44 per cent in June, much above the Reserve Bank of India’s comfort level of 5-6 per cent. http://www.thehindubusinessline.com/industry-and-economy/economy/article2276443.ece

Economictimes.com
India broke into the club of top 20 exporters of goods and reclaimed its position among top 10 services exporters in 2010, moving up two notches in both categories from 2009 in a display of resilience to the economic downturn that continues to cast its shadow on the US and the EU. The ‘World Trade Report 2011′ of the WTO, released on Wednesday, said trade in goods rebounded to grow by 14.5% in volume terms in 2010 after shrinking 12% in 2009. However, it projected the growth to moderate to 6.5% in 2011. http://economictimes.indiatimes.com/news/economy/indicators/india-regaining-status-as-trading-powerhouse-report/articleshow/9305190.cms

Finance minister Pranab Mukherjee is hopeful of India’s economy expanding 8.5% in the current fiscal despite a difficult external environment. His optimism is in stark contrast to the independent assessments that peg India’s growth at around 8%. His assessment of the economy: There had been a demand depression for some time which reflected in some month’s performance. But over a longer period, infrastructure development is taking place. National highways are expanding. Other road projects too are expanding. Power generation capacity has improved. The government has cleared coal mining projects, which should step up investments. http://economictimes.indiatimes.com/news/economy/indicators/why-finance-minister-pranab-mukherjee-thinks-indian-economy-is-fine/articleshow/9305347.cms

Yonhapnews.co.kr
China ranked the world’s No. 2 in terms of merger and acquisition (M&A) deals last year, spurred by increasing Chinese interest in acquiring foreign firms, an industry group said Thursday. The value of total M&A deals struck by Chinese companies amounted to US$169.6 billion in 2010, more than double the $65.3 billion in the previous year, Beijing-based China Enterprise Federation said. http://english.yonhapnews.co.kr/business/2011/07/21/20/0503000000AEN20110721004000320F.HTML

South Korean manufacturers’ capacity to repay debt improved in 2010 on the economic recovery, but smaller firms’ performance and cash flows were far weaker than those of large companies, the central bank said Thursday. The ratio of a manufacturer’s operating cash flow to short-term borrowing and interest reached 67.8 percent last year, up from 65.2 percent the previous year, according to a survey of 6,778 manufacturers conducted by the Bank of Korea (BOK). http://english.yonhapnews.co.kr/business/2011/07/21/7/0501000000AEN20110721003900320F.HTML

Themoscowtimes.com
The government approved on Wednesday the purchase by France’s Total of a stake in a major Arctic natural gas project, Yamal LNG, clearing another hurdle for its development. It appears that Total will buy the 20.5 percent interest from Novatek, the Russian gas producer that already owns 51 percent in the project and has the option to buy the remaining 49 percent from the other current shareholders.  Prime Minister Vladimir Putin referred to the French company as “our long-time, good and reliable partner” before the special foreign investment commission, which he chairs, backed the deal.  http://www.themoscowtimes.com/business/article/total-gets-yamal-buy-approval/440856.html#ixzz1SiN2JhU6

Car producers are on track to turn out 1.7 million units this year, making 2011 a record year for Russian car production, according to analysts at PricewaterhouseCoopers.Russian brands and foreign carmakers operating in Russia sold a combined 750,000 vehicles in the first half of 2011, the company said Wednesday, citing figures from the Association of European Businesses. Including imports, the total number of units sold grew 57 percent to 1.16 million, up from 740,000 in the same period last year. In dollar terms, sales of new cars and light vehicles surged 85 percent to $27.2 billion in the first half of 2011, the firm said Wednesday.  http://www.themoscowtimes.com/business/article/pwc-sees-record-car-sales-year/440861.html#ixzz1SiNCRTlA

Fin24.com
Annual growth in South Africa’s retail sales was flat in May and inflation quickened more than expected in June, highlighting the dilemma the Reserve Bank is facing in containing inflation without hurting an already-weak recovery.  The South African Reserve Bank (Sarb) is largely expected to leave the repo rate unchanged at 5.5% on Thursday, when the focus will be on any clues policymakers give about when rates will start rising from 30-year lows after 650 basis points’ worth of reductions between December 2008 to the end of 2010. http://www.fin24.com/Economy/Rising-inflation-poses-dilemma-for-Sarb-20110720

 


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