Good morning. Here’s what you need to know.
- Asian indices were mixed in overnight trading with the Nikkei up 1.1%. Major European indices are in the red and U.S. stocks are lower.
- The People’s Bank of China has announced a 25 basis points rate hike that will take effect tomorrow. This is the third rate hike this year. See also: 18 facts about China that will blow your mind >
- A top EU politician has criticised Moody’s for downgrading Portuguese sovereign debt to junk status saying it didn’t consider new austerity measures and the need for political consensus when making the downgrade. He even hinted at creating a new EU ratings agency. The yield on 2-year Portuguese bonds has widened to over 17%.
- German factory orders rose 1.8% month-over-month in May beating expectations of a 0.5% fall. On an annualized basis factory orders increased 12.2%. Now here are the hardest working countries in the world >
- The Portuguese downgrade and renewed focus on Italy has thrown off European markets. This morning Germany is down 0.23%, but Spain is off 1.5%, and Italy is down over 2%. Now here is a quick look at the latest odds of default across the Eurozone >
- Amidst talks of rising bad debts in China, Singapore state investor Temasek Holdings has sold a $3.6 billion stake in two of China’s biggest banks. The stake sale in Bank of China, and China Construction bank, was made to raise funds and reduce its exposure to the financial sector.
- Warren Buffett’s Berkshire Hathaway is reported to be part of a bidding group that is in talks to acquire Citigroup’s consumer lending unit for $8 billion. Other bidders in the consortium include private equity Centerbridge Partners LP and Leucadia National Corp.
- ISM non-manufacturing index for June came in at 53.3 just shy of expectations >
- It is being reported that Germany hopes to revive a proposal for a Greek bond swap that would involve exchanging debt against bonds with a longer maturity. Earlier German finance minister Wolfgang Schaeuble had suggested to Euro area finance ministers that maturities on Greek bonds should be extended by seven-years. See: A quick guide to who gets crushed if Greece defaults >
- President Obama has said he will oppose any plans to raise short-term debt ceiling, unless there is some consensus on the long-term deficit solution. The President invited Congressional leaders, including House Majority Leader Eric Cantor and Senate Minority Whip John Kyl, to the White House Thursday to try to reach a deal on deficit reduction and the debt limit. Check out a complete guide to President Obama’s plan to cut the deficit >
- BONUS – Jennifer Aniston is expected to take a one-year hiatus to focus on her relationship with Justin Theroux.