In Luxembourg this morning the Eurogroup meets for a second day of crucial talks to thrash out another bailout for Greece, which needs an estimated 90-120bn to avoid bankruptcy that would bring down the Euro.
CHINA’s efforts to cool home prices is damping the market for existing homes, with prices in May falling from the previous month in 23 of 70 cities measured. Authorities in China and Hong Kong are stepping up property curbs amid concern that prices are becoming unaffordable. China on the 14th June ordered banks to hold more money as reserves for the sixth time in 2011 as it fights to contain inflation.
EUROPEAN benchmark indices are expected to fall this morning, resuming their seven week slide, after euro zone finance ministers delayed a final decision on emergency loans to debt-stricken Greece. Hong Kong shares failed to hold onto early gains today as property counters slid on fears of more government measures to curb prices, while Shanghai markets extended their weak run towards a nine-month low on tight liquidity conditions.
THE EURO fell against the dollar for the first time in three days as calls for new elections in Greece dimmed prospects for austerity measures. The 17 nation euro declined for a fourth day versus the yen. The greenback strengthened against 14 of 16 major peers as investors bought safer assets. Japan’s currency weakened against the dollar after a report showed its exports fell more than forecast.
OIL declined for the second day on speculation a weakening global economy and Greece’s debt crisis will lead to lower fuel demand. “The major influence continues to be the European situation,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. “There is this tone of a global slowing in the economy. The data continues to be soft out of the U.S.”.
EVEN a 5th consecutive year of record global corn harvests will fail to meet demand for food, fuel and livestock feed, reducing world stockpiles to the lowest in two generations. Corn purchases are accelerating as droughts and floods limit output in everything from soybeans to wheat, driving the S&P Agriculture Index of eight commodities 60% higher in 12 months. China, the world’s second biggest consumer after the U.S. will use 47% more than a decade ago, adding an amount greater than the entire crop of Brazil.