A recap of past week .. Gold is at a cheap now :)
So what happened?
o Finance ministers from the Group of Eight nations said the global economy is still ``strong'' after stocks tumbled and interest rates rose around the world. Equities in the U.S.,
o Europe and Asia fell this week on concern central banks will stifle economic growth as they boost interest rates to quell inflation, which Barclays Capital estimates is running globally at its fastest pace in a decade. Ministers including John Snow of the U.S. and Germany's Peer Steinbrueck said ``global growth remains strong and is gradually becoming more broadly based,'' while acknowledging high oil prices and trade gaps threaten expansion, according to a statement released after two days of talks in St. Petersburg.
o U.S. consumer prices rose in May, propelled by higher gasoline costs and giving Federal Reserve policy makers reason to fret over a pickup in inflation, economists expect a report this week to show. Americans paid 0.4 percent more for goods and services last month, after prices rose 0.6 percent in April, a June 14 report from the Labor Department is expected to show. The forecast represents the median estimate of economists surveyed by Bloomberg News. Core prices, which exclude food and energy, probably rose 0.2 percent after a 0.3 percent April increase. Federal Reserve Chairman Ben S.Bernanke last week called recent increases in core prices ``unwelcome developments,'' and said central bankers ``will be vigilant'' to ensure inflation doesn't become entrenched and upend the economy.
o European stocks declined, following their second-worst weekly decline this year, on concern rising interest rates will slow economic and profit growth. ``Stocks are cheap but they are going to become cheaper still,'' said Roger Nightingale, a global strategist at Millennium Global Investments in London. ``This happens in a falling market'' where borrowing costs increase. Anglo American Plc and Rio Tinto Group led mining stocks lower as copper and gold fell. Royal Philips Electronics NV slid after its liquid-crystal display venture cut a profit forecast. The Dow Jones Stoxx 600 Index slipped 0.2 percent to 310.33 at 9:40 a.m. in London. The Stoxx 50 also slid 0.2 percent, and the Euro Stoxx 50 for the 12 nations using the euro lost 0.5 percent.
o Japan's economy grew at an annual 3.1 percent pace in the first quarter, buoyed by the second- biggest increase in corporate spending since 1990. The figure for gross domestic product released by the Cabinet Office in Tokyo today was in line with the 3.2 percent forecast of 20 economists surveyed by Bloomberg News. It was revised from an initial 1.9 percent estimate made on May 19. Increased spending by companies including Matsushita Electric Industrial Co. and Toshiba Corp. will support Japan's recovery from three recessions in 15 years. The expansion will help end more than seven years of deflation and strengthen the central bank's case for raising interest rates from close to zero percent. ``Right now, everything looks go, go, go,'' said Jesper Koll, Merrill Lynch & Co.'s chief economist for Japan. ``This is not an economy that needs zero interest rates.''
o China posted a record monthly trade surplus in May, adding pressure on the government to allow the yuan to rise. The $13 billion surplus topped the $12 billion median estimate of 21 economists in a Bloomberg News survey and widened from $10.5 billion in April. Imports rose 21.7 percent from a year earlier and exports jumped 25.1 percent, the customs bureau said on its Web site today. China's swelling trade surplus is flooding the economy with cash, threatening to fuel inflation and making it more difficult for the central bank to restrict credit growth.The government has ignored calls by the U.S. and the Group of Seven industrialized nations to let its currency strengthen faster. ``China may be resisting international calls for faster appreciation, but the surplus is putting pressure on the government to let the yuan strengthen because of the problems it's causing in the domestic economy,'' said Ben Simpfendorfer, China strategist at Royal Bank of Scotland in Hong Kong.
o Thailand, the world's biggest rubber exporter, may produce 2.7 percent less in 2006 of the material used to make auto tires, the second straight year of decline, as above-average rainfall curbs production. The nation will probably produce about 2.9 million metric tons of natural rubber, compared with 2.98 million tons in 2005, Sang Udomjarumani, chief executive officer of the Bangkok-based International Rubber Consortium Co. Ltd., said yesterday.
o Gold may end the longest slump in two years on concern the U.S. Federal Reserve will fail to curb inflation, boosting the appeal of bullion as a hedge against rising consumer prices. Sixteen of 41 traders, investors and analysts from Sydney to Chicago surveyed by Bloomberg News on June 8 and June 9 advised buying gold, which fell 4.4 percent last week to $612.80 an ounce in New York. Fifteen recommended selling, and 10 were neutral.
o Finance ministers from the Group of Eight nations said the global economy is still ``strong'' after stocks tumbled and interest rates rose around the world. Equities in the U.S.,
o Europe and Asia fell this week on concern central banks will stifle economic growth as they boost interest rates to quell inflation, which Barclays Capital estimates is running globally at its fastest pace in a decade. Ministers including John Snow of the U.S. and Germany's Peer Steinbrueck said ``global growth remains strong and is gradually becoming more broadly based,'' while acknowledging high oil prices and trade gaps threaten expansion, according to a statement released after two days of talks in St. Petersburg.
o U.S. consumer prices rose in May, propelled by higher gasoline costs and giving Federal Reserve policy makers reason to fret over a pickup in inflation, economists expect a report this week to show. Americans paid 0.4 percent more for goods and services last month, after prices rose 0.6 percent in April, a June 14 report from the Labor Department is expected to show. The forecast represents the median estimate of economists surveyed by Bloomberg News. Core prices, which exclude food and energy, probably rose 0.2 percent after a 0.3 percent April increase. Federal Reserve Chairman Ben S.Bernanke last week called recent increases in core prices ``unwelcome developments,'' and said central bankers ``will be vigilant'' to ensure inflation doesn't become entrenched and upend the economy.
o European stocks declined, following their second-worst weekly decline this year, on concern rising interest rates will slow economic and profit growth. ``Stocks are cheap but they are going to become cheaper still,'' said Roger Nightingale, a global strategist at Millennium Global Investments in London. ``This happens in a falling market'' where borrowing costs increase. Anglo American Plc and Rio Tinto Group led mining stocks lower as copper and gold fell. Royal Philips Electronics NV slid after its liquid-crystal display venture cut a profit forecast. The Dow Jones Stoxx 600 Index slipped 0.2 percent to 310.33 at 9:40 a.m. in London. The Stoxx 50 also slid 0.2 percent, and the Euro Stoxx 50 for the 12 nations using the euro lost 0.5 percent.
o Japan's economy grew at an annual 3.1 percent pace in the first quarter, buoyed by the second- biggest increase in corporate spending since 1990. The figure for gross domestic product released by the Cabinet Office in Tokyo today was in line with the 3.2 percent forecast of 20 economists surveyed by Bloomberg News. It was revised from an initial 1.9 percent estimate made on May 19. Increased spending by companies including Matsushita Electric Industrial Co. and Toshiba Corp. will support Japan's recovery from three recessions in 15 years. The expansion will help end more than seven years of deflation and strengthen the central bank's case for raising interest rates from close to zero percent. ``Right now, everything looks go, go, go,'' said Jesper Koll, Merrill Lynch & Co.'s chief economist for Japan. ``This is not an economy that needs zero interest rates.''
o China posted a record monthly trade surplus in May, adding pressure on the government to allow the yuan to rise. The $13 billion surplus topped the $12 billion median estimate of 21 economists in a Bloomberg News survey and widened from $10.5 billion in April. Imports rose 21.7 percent from a year earlier and exports jumped 25.1 percent, the customs bureau said on its Web site today. China's swelling trade surplus is flooding the economy with cash, threatening to fuel inflation and making it more difficult for the central bank to restrict credit growth.The government has ignored calls by the U.S. and the Group of Seven industrialized nations to let its currency strengthen faster. ``China may be resisting international calls for faster appreciation, but the surplus is putting pressure on the government to let the yuan strengthen because of the problems it's causing in the domestic economy,'' said Ben Simpfendorfer, China strategist at Royal Bank of Scotland in Hong Kong.
o Thailand, the world's biggest rubber exporter, may produce 2.7 percent less in 2006 of the material used to make auto tires, the second straight year of decline, as above-average rainfall curbs production. The nation will probably produce about 2.9 million metric tons of natural rubber, compared with 2.98 million tons in 2005, Sang Udomjarumani, chief executive officer of the Bangkok-based International Rubber Consortium Co. Ltd., said yesterday.
o Gold may end the longest slump in two years on concern the U.S. Federal Reserve will fail to curb inflation, boosting the appeal of bullion as a hedge against rising consumer prices. Sixteen of 41 traders, investors and analysts from Sydney to Chicago surveyed by Bloomberg News on June 8 and June 9 advised buying gold, which fell 4.4 percent last week to $612.80 an ounce in New York. Fifteen recommended selling, and 10 were neutral.