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Good morning. Here’s what you need to know.
- Markets in Asia traded mostly lower overnight, with Hong Kong’s Hang Seng down 1.3 per cent. Shares in Europe are also in the red as U.S. futures point to a flat open.
- Chinese manufacturing weakened for another month, with flash PMI falling to 48.1 in June from a revised 48.4 in May. Manufacturers in the country reported the sharpest decline in new export orders in more than three years.
- The newly formed Greek coalition government has agreed to seek a two year delay on meeting fiscal targets, Reuters reports. The government is also hoping to extend unemployment benefits while restricting layoffs. Meanwhile, Martin Wolf says hopes for a Federal Union in Europe are doomed >
- Spain sold €2.2 billion in two-year notes, above expectations for a smaller €2 billion sale. Yields fell to 4.706 per cent on the shorter-term debt from highs seen days earlier, but were more than double the 2.069 per cent recorded in a March auction. BofA: The Spanish bond market will collapse without ECB intervention >
- rumours hit this morning that Moody’s could downgrade a number of U.K. banks after markets close in the U.S. The report, from Sky News, indicates RBS, Barclays, HSBC and Goldman Sachs, could be on the list. Mike Mayo reveals the one possible surprise in the downgrades >
- U.K. retail sales grew 1.4 per cent sequentially in May, topping projections by 20 basis points. Fuel sales led the jump with a 6.2 per cent gain, while clothing and shoe purchases advanced 3.4 per cent.
- German manufacturing slowed to its lowest pace in three years, with flash manufacturing PMI declining to 44.7 in May. France logged some improvement during the month, with a flash reading of manufacturing rising to 45.3 from 44.7 a month earlier. A figure below 50 indicates contraction.
- Crude prices fell below $80 for the first time since October in overnight London trade. WTI August contracts slipped as low as $79.92 a barrel before paring some losses.
- Air France will lay off as many as 5,120 people by December of 2013 as it tries to cut its losses and shed debt. The French carrier said it would push early retirement and part time working. Here are 10 big companies at risk of bankruptcy >
- Attorney General Eric Holder was found in contempt of Congress by the House Oversight Committee yesterday over his refusal to turn over documents related to the Fast and Furious gun-running scandal. The 23-17 vote fell along party lines.
- Lawmakers are pushing for an overhaul of the IPO process after Facebook shares declined by as much as 30 per cent in its first month of trade. In a letter, Representative Darrell Issa told SEC Chairman Mary Schapiro that investment banks are able to “dictate pricing while only indirectly considering market supply-and-demand.” Here are two gigantic IPOs that did worse than Facebook >
- Economic announcements in the U.S. kick off at 8:30 a.m. with initial unemployment claims. Claims missed expectations, falling to 387,000 from a revised 389,000 a week earlier. The Philadelphia Federal Reserve will release its monthly reading of business activity at 10:00 a.m. Economists see the headline index increasing to 0 from -5.8 in May. Also at 10:00 are existing home sales, which are seen declining to 4.57 million. Follow it all live on Money Game >
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