Good morning. Here’s what you need to know.
- Markets in Asia were lower in overnight trading. The Japanese Nikkei 225 fell 1.3%, the Hong Kong Hang Seng was down 2.2%, and the Shanghai Composite fell 5.3%. European markets are lower, with France showing the largest losses, down 1.9%. In the United States, futures point to a negative open.
- Chinese financial stocks fell more than 7% Monday after the People’s Bank of China in a statement placed the onus on large financial institutions to help ease liquidity conditions in the Chinese banking system, which has seen key interbank lending rates soar in recent days. “We believe these statements suggest that the central bank’s policy stance remains tight,” said Nomura’s Zhiwei Zhang. “The decision to put this note on its website suggests the PBoC wants to reiterate its policy stance.”
- Fears over withdrawal of Federal Reserve monetary stimulus continue to haunt markets. Overnight, gold fell from $1296 an ounce at Sunday’s open to a low of $1277 before rebounding to current levels around $1281, down 0.8%. Meanwhile, after breaching 2.5% on Friday, the yield on the 10-year U.S. Treasury note is up to 2.59% this morning, the highest level since August 2011.
- The German IFO business sentiment index advanced to 105.9 in June from 105.7 in May, right in line with consensus estimates. The sub-index assessing current conditions fell to 109.4 from 110.0, but the economic outlook sub-index climbed to 102.5 from 101.6.
- In a speech, Bank for International Settlements general manager Jaime Caruana said that “monetary policy has done its part,” asserting that “recovery now calls for a different policy mix – with more emphasis on strengthening economic flexibility and dynamism and stabilizing public finances.” The BIS is known as the central bank for central banks.
- Iran’s currency is up more than 15% against the U.S. dollar since the election of moderate cleric Hassan Rowhani as the nation’s head of state over a week ago. Traders said the rial was trading under 30,000 to the dollar versus levels around 35,000 a week ago.
- In order to better align its economy with the rest of the world, Saudi Arabia will shift its weekend to Friday and Saturday from Thursday and Friday. The country will adopt this starting on June 29.
- NSA leaker Edward Snowden is on the run. It is unclear where he is now. However, experts speculate he may be on his way to Cuba, Equador, or Venezuela.
- At 10:30 AM ET, the Dallas Federal Reserve releases its monthly report on regional manufacturing conditions. Economists predict the report’s headline index rose to -1.0 from last month’s -10.5 reading, suggesting further deterioration in regional conditions in June, though at a much-reduced pace from the previous month. Follow the data LIVE on Business Insider >
- Dallas Fed President Richard Fisher delivers a speech in London today at 12:30 PM ET. Fisher’s speech is one of 7 speeches by Federal Reserve presidents and board members this week. Market participants will be listening closely for comments related to the timeline for tapering stimulus that Fed Chairman Ben Bernanke laid out at last week’s FOMC press conference.
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