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Japan M2 Money Stock Jumps 4.0% In May



The M2 money stock in Japan climbed 4.0 percent on year in May, the Bank of Japan said on Tuesday - coming in at 906.7 trillion yen. That exceeded forecasts for an increase of 3.6 percent, which would have been unchanged from the April reading. The M3 money stock was up 3.3 percent on year to 1,221.3 trillion yen - also beating expectations for 3.0 percent, which also would have been unchanged. The L money stock advanced 4.3 percent on year to 1,610.9 trillion yen after gaining 4.0 percent in the previous month.

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New Zealand May Retail Credit Card Spending Climbs 1.2%



The total number of credit card transaction in the retail industries gained a seasonally adjusted 1.2 percent on month in May, Statistics New Zealand said on Wednesday - worth NZ$4.6 billion. That beat expectations for an increase of 0.9 percent following the 0.7 percent decline in April. The May reading was up NZ$143 million or 3.2 percent compared to the previous year. "Spending rose in five of the six retail industries," business indicators manager Neil Kelly said. "Fuel spending had the largest rise, continuing a recent run of increases, but is still below the levels seen before the price falls of late last year." Overall card transactions climbed 1.4 percent after slipping a downwardly revised 1.2 percent in the previous month (originally -1.1 percent). Transactions in the core retail industries (which exclude the vehicle-related industries) added 0.4 percent following a 0.9 percent fall in April. Trends for the total, retail, and core retail series have generally been rising since these series began in October 2002, the bureau said.

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UK House Price Balance Rises To +34 In May - RICS



House prices in the United Kingdom are expected to move higher over the next three months, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday, with an index score of +34. That touches a nine-month high, and it's up from +32 in April, although it was shy of expectations for +36. The increase in prices was the natural result of the Conservative Party's electoral victory last month, RICS said. "It is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable," RICS chief economist Simon Rubinsohn said.

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Moody's: China Has Made Substantial Progress on Reform and Rebalancing



Moody's Investors Service says that China has made substantial progress on reforming and rebalancing its economy, since the government committed to deep reforms during the third plenary session of the 18th Central Committee of the Communist Party of China in November 2013. "Substantial progress has been made on reform and rebalancing, and the general direction of government policy is supported by important initiatives such as the anti-corruption campaign and the One Belt, One Road strategy," says Michael Taylor, a Moody's Managing Director and Chief Credit Officer for Asia Pacific. "However, there are two main tail risks to the relatively benign scenario that forms our core view, although we do not think either of them is very likely. The first would be an asset price correction in property or equities, and the second would be a rapid and ill-prepared liberalization of the capital account," adds Taylor. Taylor explains that China's reforms and rebalancing of its economy involve balancing the following four factors: 1) The reorientation of the economy away from state-led, capital intensive investment towards private consumption; 2) Lowering the economy's dependence on credit-fuelled growth; 3) The implementation of policies that will allow markets to play a decisive role, to scale back on the government's role in the economy, and to enhance property rights; and 4) Ensuring that short-term growth does not fall substantially below the government's target of around 7%.

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Moody's Investors say Regulatory Costs and a Lack of Liquidity Inhibit the Growth of Europe's structured Finance Market



In a round table discussion, Moody's Investors Service found that the European securitisation market's regulatory capital costs is a barrier to demand, in addition to a lack of liquidity. In a new report published today, the rating agency says investors do not believe the capital treatment of European structured finance instruments reflects their associated risks. "Investors desired change in the capital framework for banks that hold structured finance instruments, which could create more liquidity in the market. The market's growth depends on the arrival of more bank investors, in their view," commented Jean Dornhofer a Moody's Senior Vice President and author of the report. "While investors consider the idea of standardisation - as part of criteria for qualifying securitisation - to be a step forward for the market, they say it should be a second-order objective as it doesn't create demand," she observed. The new report: "Investors Say Regulatory Costs and a Lack of Liquidity Are Barriers to the Growth of European Structured Finance Market," is available on www.moodys.com. Moody's found these investors consider that the regulatory capital treatment of structured finance instruments does not reflect their associated risks. If the current levels of regulatory capital associated with structured finance instruments remain the same, the European structured finance market will not return, according to some investors. Investors say the concept of a qualifying securitisation provides an opportunity to revisit the rules on capital and liquidity treatment of structured finance instruments and align them with instruments of equivalent risk. The discussion revealed that the expansion of the European structured finance market depends on the arrival of more bank investors. A change in the capital framework might help create more liquidity in the structured finance market. Investors consider that banks do not want to invest in instruments that cannot be easily liquidated. Improving the standardisation of capital treatment of structured finance instruments versus other instruments would help increase the investor base, increasing liquidity in the secondary market. The low depth of the secondary market affects the appetite of "real money" investors. Investors said that issuers need to find a broader, active investor base for mezzanine and equity tranches. With spreads tightening, hedge funds may exhibit less demand for subordinated tranches. Moody's report summarises investors' general feedback, rather than the specific view of any individual participant. As the number of participants is not statistically significant, the findings are more anecdotal than scientific. The views expressed are not necessarily Moody's view.

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Canadian dollar slightly changed on weak data, before Fed meeting

The Canadian dollar was moderately changed on Monday as factory sales dropped more than projected and the market awaits Federal Reserve's policy meeting this week. Official figures showed factory sales fell 2.1% in April because of lower sales of food and aerospace products, its third decline in four months. Traders are also expecting Fed's policy statement on Wednesday. The loonie ended at 81.19 US cents from Friday's 81.23 US cents. Markets are disregarding Greece's debt crisis as of the moment “as you really don't know which way things are going," said Benjamin Reitzes, Senior Economist and Foreign Exchange Strategist at BMO Capital Markets.

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Xbox, PlayStation present new games ahead of E3 conference

Videogame console giants Microsoft and Sony vied for attention ahead of the annual E3 conference, giving fans sneak peeks of the latest Xbox and PlayStation games. Microsoft also told gamers that new Xbox One consoles would have "backward compatibility", meaning they will also be able to play games made for the older Xbox 360. Sony told fans a deal with Activision would allow PS4 owners to be the first to play the upcoming "Call of Duty: Black Ops III" this summer.

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US dollar plummets as Fed signals rate hike by end of year



The US dollar slumped on Wednesday as the Federal Reserve implied it might wait until late this year to increase interest rates. Policymakers said it would hike rates when the economy is strong enough to handle it. Also, they lowered the projections from 2.3% to 2.7% range forecast in March to 1.8% to 2.0% this year. The greenback closed at $1.1199 per euro and $1.5640 per British pound. Against the Japanese yen, the dollar ended at ¥124.435. It has to be gentle… It is reiterating everything Fed Chair “Janet Yellen has tried embody in the last couple of years,” said Andrew Wilkinson, Chief Market Strategist at Interactive Brokers LLC.

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US dollar slides to new 1-month lows on calm inflation data





The US dollar skidded to new one-month trough on Friday, as inflation data aggravated the uncertainty over the timing of Federal Reserve's interest rate hikes. A measure of core inflation went up almost 0.1% in May, the smallest increase in five months. The greenback stood at $1.1373 per euro. Against the Japanese yen, the dollar closed at ¥123.080. It seems the US markets were contented with the view this week's FOMC meeting “reduced the chances of more than one rate hike before year end,” said Ray Attrill, Global Co-head of FX Strategy at National Australia Bank.


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US dollar turns in advances on deadlock in Greek talks





The US dollar stabilized on Thursday as debt talks seeking to avert a Greek debt default reached a bump, with the market seemed to shift back to likelihoods of higher interest rates from Greece. The greenback stood at $1.1204 per euro from Tuesday's $1.1135. Against the Japanese yen, the dollar hit ¥123.88 from ¥124.38 earlier. EUR/USD responded less, unlike USD/JPY on underlying positivity an agreement will be closed as it remains intact “amid pessimism over the talks breaking down,” said Junichi Ishikawa, Market Analyst at IG Securities. Meanwhile, European leaders are scheduled to meet in Brussels Thursday.


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