“U.K. retail sales fell the most in 16 months in May as demand for food and drink declined, according to an index by the Confederation of British Industry.

A gauge of annual sales growth dropped to minus 11, the lowest since January 2012, from minus 1 in April, the London-based lobby group said today. Economists had forecast an increase to 3, according to the median of 12 estimates in a Bloomberg News survey. Retailers expect the volume of sales to return to growth in June, the report showed.

Higher energy prices and weak wage growth have helped to curb consumer spending. Data earlier this month showed that expenditure by households rose just 0.1 percent in the first quarter, the least since the third quarter of 2011.

“Most sub-sectors reported flat or falling sales over the year, with only furniture and carpets and recreational goods seeing strong growth,” the CBI said. Still, “a narrow balance of retailers again expect the overall business situation to improve over the next three months, with three quarters expecting conditions to remain stable.”

A gauge of the volume of orders placed with suppliers dropped to minus 25 in May from minus 12 in April. A measure of sales volumes for the time of year rose to minus 17 from minus 27. A three-month moving average of sales slipped to minus 6 from minus 4….”

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“The Organization for Economic Cooperation and Development cut its economic forecast forItaly for the second time this month as weak household demand extends the longest recession in more than two decades.

Italy’s gross domestic product will contract 1.8 percent this year before rising 0.4 percent in 2014, the Paris-based OECD said today in its Global Economic Outlook. That compares with a 1.5 percent decline for 2013 and growth of 0.5 percent in 2014 forecast in a May 2 survey on Italy, which revised its November predictions.

The country’s recession “will continue throughout 2013 as the effects of fiscal tightening and restrictive conditions bear down on economic activity,” the OECD said in today’s report. “Employment and hours worked will continue to fall, constraining household budget and consumption spending.”

Italy slipped into recession in the final quarter of 2011. The austerity policies of former Prime Minister Mario Monti, which helped bring the budget deficit within the European Union limit, deepened the slump in the EU’s third-biggest economy and pushed the jobless rate to the highest in almost 20 years.

“With employment likely to decline in 2013-14 and with the household saving rate having fallen significantly over the past few years, not much growth in consumer demand can be expected,” the OECD said today.

Household Demand….”

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“German unemployment rose more than four times as much as economists estimated in May as the euro area’s sovereign debt crisis and a long winter took their toll on Europe’s largest economy.

The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million, the Nuremberg-based Federal Labor Agency said today. That’s the fourth straight monthly gain. Economists predicted an increase of 5,000, according to the median of 35 estimates in aBloomberg News survey. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent….”

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“The Organization for Economic Cooperation and Development forecasts global economic growth will accelerate in 2014 with both the U.S. and Japan continuing to outpace the euro area.

“The global economy is moving forward and it is doing so at multiple speeds,” OECD Chief Economist Pier Carlo Padoan said today in the Paris-based organization’s semi-annual Economic Outlook. Differing monetary and fiscal choices across the major developed economies are driving regional divergence with “each path carrying its own mix of risks,” he said.

Global central banks are continuing to try to bolster their economies, with the Federal Reserve buying $85 billion of debt a month and the Bank of Japan unveiling unprecedented stimulus last month. In the euro region, where the European Central Bank cut its benchmark rate to a record low this month, the OECD said “more can be done through further non-conventional measures.”

The OECD sees U.S. gross domestic product rising 1.9 percent this year and 2.8 percent in 2014, while Japan’s will increase 1.6 percent and 1.4 percent. The euro-area economy will shrink 0.6 percent this year before expanding 1.1 percent next, according to the report.

In a separate release today, German unemployment rose more than economists forecast in May as the euro-region debt crisis and a long winter took their toll on Europe’s largest economy. The number of people out of work climbed 21,000 to 2.96 million. Economists predicted an increase of 5,000, according to the median of 35 estimates in a Bloomberg News survey.

Some Optimism…”

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“European stocks fell, after the Stoxx Europe 600 Index rallied the most in a month, on concern that the Federal Reserve will reduce debt purchases as the economy strengthens. U.S. stock-index futures dropped, while Asian shares advanced.

PSA Peugeot Citroen declined 2.3 percent following a French newspaper report that Europe’s second-biggest automaker may sell new shares to raise cash. Evraz Plc fell to a record low after Stoxx Ltd. said it will delete the commodity producer from its benchmark Stoxx 600 next month. Hennes & Mauritz AB dropped 2.2 percent as Goldman Sachs Group Inc. recommended investors sell the shares.

The Stoxx 600 retreated 1.4 percent to 304.08 at 12:41 p.m. in London. The equity benchmark is still heading for a 2.5 percent advance in May, its 12th monthly gain and longest streak since 1997. It has rallied 8.7 percent so far this year, bolstered by central-bank monetary stimulus. Futures on the Standard & Poor’s 500 Index lost 0.6 percent today, while the MSCI Asia Pacific Index added 0.5 percent.

“My biggest worry is that central banks will lose their credibility, and that the Fed in particular, which has embarked on this huge quantitative-easing program, will lose the faith of investors,” Kevin Adams, who helps oversee about 69 billion pounds ($104 billion) at Henderson Global Investors in London, told Mark Barton and Anna Edwards on Bloomberg Television.

Treasuries and bonds around the world fell on concern the Fed will trim its debt purchases. The yield on U.S 10-year bonds increased three basis points to 2.19 percent in London, the highest since April 2012, after earlier reaching 2.23 percent, Bloomberg data show.

Fed Purchases…”

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“SoftBank Corp. (9984)’s $20.1 billion takeover of Sprint Nextel Corp. (S), the third-largest U.S. wireless carrier, got national-security clearance from U.S. officials.

Softbank was notified yesterday by the Committee on Foreign Investment in the U.S. that it has completed its investigation of the proposed transaction and found no unresolved national-security issues, according to a statement today. The deal is expected to close July 1, Softbank said.

Dish Network Corp. (DISH), which has made a $25.5 billion counteroffer for Sprint, has said allowing SoftBank to control a U.S. phone network would compromise national security. SoftBank uses some network gear made by Chinese manufacturers, and Sprint’s joint-venture partner Clearwire Corp. (CLWR) has Huawei Technologies Co. equipment in part of its network. Both carriers have said they plan to discontinue purchases and dismantle network equipment provided by Chinese companies.

“It’s positive for SoftBank’s share price as Dish has criticized this,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. which oversees the equivalent of $4.8 billion. “One political barrier is cleared and it’s a plus for SoftBank.”

Shares Rise…”

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“Australia’s central bank may need to cut record-low interest rates at least two more times as mining investment peaks and slowing growth in China damps exports, said Pacific Investment Management Co., manager of the world’s biggest bond fund.

With resources investment providing 60 percent of Australian economic growth last year, policy makers need to act to support other sources of domestic demand, Sydney-based portfolio managers Adam Bowe and Robert Mead said today. The Aussie dollar is still high enough to restrict the economy even after dropping to a 1 1/2-year low, they said.

“Australian and global policy rates are reconverging and the risks are that there are more rate cuts to come rather than less,” Bowe said today in a phone interview. “The single cut currently being priced in by the markets looks like it won’t be sufficient unless the exchange rate suffers a more meaningful correction than the current decline.”

The Reserve Bank of Australia indicated weak inflation gives it scope for further reductions after cutting its benchmark rate to 2.75 percent this month. Non-mining industries are struggling to take up the slack in the economy, damped by a currency that is more than 20 percent overvalued on a purchasing power basis. The government last week said the resources-investment boom may be at its peak as A$150 billion ($144 billion) of projects have been scrapped or delayed.

Aussie Plunges….”

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“Australia’s dollar fell to the lowest since October 2011 versus its U.S. peer after the 10-year yield spread between the two countries’ debt narrowed to the least in more than four years on signs the American economy is improving.

Local bonds fell, with the 10-year rate climbing to a 2-month high, after U.S. Treasury benchmark yields rose to the most since April 2012. The Aussie weakened to a more-than four-year low against its New Zealand counterpart. Pacific Investment Management Co., which runs the world’s biggest bond fund, said it expects further interest rate cuts by the Reserve Bank of Australia as mining investment cools.

“The diminishing yield differential is one argument for the Aussie’s move lower,” said Michael Turner, a debt strategist at Royal Bank of Canada in Sydney. “There certainly seems to be some downside risk to growth in Australia. The risk is skewed for more easing by the RBA.”

The Australian dollar touched 95.36 U.S. cents, the weakest since October 2011, before trading at 95.38 at 3:53 p.m. in Sydney, 0.8 percent below yesterday’s close. It fell 0.6 percent to NZ$1.1840 after earlier dropping to NZ$1.1837, the lowest since January 2009. The Aussie weakened 0.8 percent to 97.78 yen. New Zealand’s dollar slid 0.2 percent to 80.57 U.S. cents and lost 0.3 percent to 82.45 yen.

Australia’s 10-year bond yield rose 15 basis points or 0.15 percentage point to 3.47 percent, after touching 3.5 percent, the highest since March 27. The U.S. Treasury 10-year yield rose to 2.23 percent today, a level unseen since April 2012. The spread between the two narrowed to 116 basis points yesterday, the least since November 2008.

U.S Economy….”

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“The Dollar Index rose for a second day before U.S. data tomorrow on first-quarter growth amid speculation the Federal Reserve will curb monetary stimulus.

The Australian dollar fell to the weakest level since October 2011 after the International Monetary Fund cut its growth forecast for China. A gauge of Asian currencies touched an almost eight-month low on concern investors will repatriate funds from emerging markets back to the U.S.

“The dollar is strong,” said Marito Ueda, the senior managing director at FX Prime Corp. (8711), a currency-margin company in Tokyo. “The U.S. economy is steadily recovering, and a reduction in monetary easing appears to be coming into view.”

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against currencies of six major U.S. trading partners, added 0.3 percent to 84.349 at 6:50 a.m. inLondon. It reached 84.498 on May 23, the most since July 2010.

The dollar was little changed at $1.2845 per euro after rising 0.6 percent yesterday. The yen traded at 131.57 per euro from 131.59 and was little changed at 102.42 per dollar. The Aussie fell 0.8 percent to 95.40 U.S. cents, after dropping to 95.36, the weakest since Oct. 5, 2011.

The U.S. Commerce Department is likely to say tomorrow the world’s biggest economy grew at an annualized 2.5 percent pace in the first quarter, according to the median forecast of economists surveyed by Bloomberg News. It would be unchanged from the preliminary reading released last month.

U.S. Growth

U.S. real gross domestic product will probably expand 2 percent this year, compared with a 0.5 percent contraction in the euro region, a separate poll of economists shows. Japan’s economy is estimated to grow 1.4 percent…..”

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“The International Monetary Fund lowered its forecasts for China’s growth and said making “decisive” policy changes would put the economy on a more sustainable path.

Expansion will be about 7.75 percent this year and next, David Lipton, first deputy managing director of the IMF, said today at a press briefing in Beijing after concluding an annual review of China. In April, the IMF forecast growth of 8 percent this year and 8.2 percent expansion in 2014.

Lipton warned of risks from a record expansion of credit, with the revised outlook following an unexpected slowdown in the first quarter. Premier Li Keqiang, who took office in March, is planning policy changes that would open up more of the economy to private investment and alter a household-registration system that impedes urbanization.

“While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path,” Lipton said.

At the same time, Lipton said China’s current monetary and fiscal policies are “appropriate” and the IMF isn’t suggesting China restrict credit now.

Lipton spoke after meeting with leaders including vice premiersWang Qishan and Ma Kai, People’s Bank of China GovernorZhou Xiaochuan, Finance Minister Lou Jiwei and Liu He, a vice chairman of the National Development and Reform Commission, according to the IMF.

Analyst Surveys…”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

“Have your summer vacation all booked? Hoping to ignore your phone for a while, feeling safe in your investments and secure in the knowledge that the world’s financial authorities aren’t planning any surprises just yet?

Think again.

U.S. Federal Reserve Chairman Ben Bernanke made it clear in congressional testimony last week that the central bank could very well entertain a change in policy sooner than many had predicted. That would mean providing less stimulus to the economy by cutting back on its bond buying program.

The result was an unsettling bout of volatility, with Treasury yields jumping while stocks slid, as investors feared the Fed’s support might start to recede.

And that means this could be a summer when investors may find the waves are not only on the beach.

While Fed-watchers are hard pressed to see a turning point at the bank’s June policy meeting, there are plenty of other spots this summer when the Fed could start to prepare markets for change.

Besides the June meeting, there is a policy meeting in July and the release of minutes from both those meetings that will follow. There are three Fridays where monthly jobs data will be released, and plenty of inflation readings and other, lesser economic datapoints.

And of course, there are other potential flashpoints. Will an heir to Bernanke emerge? Will the annual monetary policy symposium in Jackson Hole, Wyoming, this August matter without Ben Bernanke?

Here’s what to watch for this summer on the Fed front:

FED MEETINGS AND MINUTES….”

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“With the Standard & Poor’s 500 Index having risen 16 percent so far this year, investors may be tempted to opt for the few stocks that have missed out on the party.

But hunting for bargains in this environment could be more trouble than it’s worth, experts tell The Wall Street Journal.

“I don’t believe the laggards are going to arise from the dead any time soon,” Kim Forrest, a senior equity analyst at Fort Pitt Capital Group, told the newspaper.

All but 40 of the stocks in the S&P 500 have gained so far in 2013, indicating the underperformers are unlikely to catch up soon, experts say.

Just because a company has a low share price doesn’t mean its stock is a good buy. The low share price may simply be a reflection of the company’s problems.

So in an effort to avoid overpaying for a pedigree, you may just be purchasing just a dog….”

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“U.S. securities regulators are turning back toward Main Street, renewing their focus on accounting fraud and other financial-disclosure failings.

Such cases were long a staple of the Securities and Exchange Commission’s enforcement efforts, leading to more than 25% of civil-enforcement actions filed by the agency in its 2003 to 2005 financial years. The financial crisis shifted attention and money elsewhere. In the year ended last September, accounting fraud and financial-disclosure problems made up just 11% of SEC enforcement actions.

But as the volume of crisis-related cases ebbs, top SEC officials are expected to announce soon a broad shuffling of resources in the agency’s enforcement division that will include an increased focus on accounting fraud, according to people close to the agency.

The decision to hunt for wrongdoing by Main Street, as well as Wall Street, puts America’s corporations in the SEC’s cross hairs.

The move is led by SEC Chairman Mary Jo White and co-enforcement chiefs George Canellos and Andrew Ceresney, said the people close to the agency. It isn’t clear how much money or manpower will be devoted to the effort, though the SEC already is developing a computer program to sift language in financial reports for clues that executives might be misstating results, agency officials say….”

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“Valeant Pharmaceuticals Internationalsaid on Monday it agreed to buy Bausch & Lomb from Warburg Pincus for $8.7 billion, a cash deal set to vault the Canadian company into the upper ranks of the global pharmaceutical sector.

The purchase strengthens Valeant’s offerings in ophthalmic pharmaceuticals, contact lenses and lens care products, along with adding ophthalmic surgical devices and instruments to its portfolio.

Valeant shares rose nearly 8 percent in Toronto to C$93.71, touching an all-time high. It had gained 13 percent on Friday following reports a deal was in the works.

The company’s stock has multiplied six times over in about three years, with Valeant racking up some 60 deals since 2008.

Bausch & Lomb is by far Valeant’s biggest acquisition to date, and will place it roughly among the 15 largest global pharmaceutical companies, said Valeant Chief Executive Michael Pearson in an interview with Reuters.

“This is a 160-year old company and brand name. I think we’ll be able to really leverage that,” he said, adding that the deal will boost Valeant’s 2013 earnings.

Talks with Bausch & Lomb have been going on and off for a few years but intensified in recent weeks, Pearson said, adding that opthalmology is attractive for its growth prospects and Bausch & Lomb’s large proportion of sales directly to consumers is also appealing.

Laval, Quebec-based Valeant plans to keep all three of Bausch & Lomb’s segments of contact lenses, pharmaceuticals and surgical instruments, said Pearson, putting to bed some market speculation from Friday that the company may seek to sell the surgical instruments arm.

The Bausch & Lomb deal also gives Valeant the large scale of operations that it lacked in China and emerging markets like the Middle East, Pearson said….”

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TIF, MRK, AAPL, CVX, RCL, CVX, TRLA, VRX, NWS, RCL,

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“(Reuters) – Biotech stocks are so hot that even some of the bulls are starting to find themselves on edge.

An index of biotech drugmakers’ shares has climbed nearly 50 percent in the past 12 months to all-time highs as the industry starts to launch drugs developed by identifying genes associated with disease – a revolution made possible by decoding the first human genome more than 10 years ago.

The rise at such a fast pace is triggering the inevitable talk of a bubble, especially when investors are reminded that more than 90 percent of experimental drugs that reach mid-stage testing in humans do not make it past that point.

“Genetic information is providing a big opportunity for new drug development,” said Rajiv Kaul, portfolio manager of Fidelity Investments Select Biotechnology Portfolio, in Boston. “There are exciting new opportunities, but you also need to be careful because most drugs fail.”

Compared with a year ago, the Nasdaq Biotech Index, which is weighted by market cap, is up 45 percent, the dollar-weighted Arca Biotech Index has risen 35 percent, and the Pharmaceutical Index of large U.S. and European drugmakers’ shares has increased 32 percent. Over the same period, the S&P 500 Index has gained 25 percent…..”

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“LONDON (Reuters) – AstraZeneca is to buy Omthera Pharmaceuticals for as much as $443 million to build up its cardiovascular drug business, a priority area for Britain’s second-biggest drugmaker.

The acquisition of the U.S.-based specialist in fish oil-derived medicine underscores a drive by newChief Executive Pascal Soriot to revive AstraZeneca’s fortunes through a series of bolt-on deals.

It is his second purchase in the cardiovascular field, following the acquisition last month of AlphaCore Pharma, a small early-stage U.S. biotechnology company.

The latest transaction pitches AstraZeneca into competition with rivals including GlaxoSmithKlinethat already sell heart-friendly fish oil drugs.

Omthera’s leading drug has already completed final-stage clinical tests and has the potential to be combined with AstraZeneca’s blockbuster cholesterol fighter Crestor. Helvea analyst Odile Rundquist said the deal was “a good move as it perfectly complements AstraZeneca’s cardiovascular portfolio”.

AstraZeneca’s sales and profits are falling as older medicines lose patent protection and the company badly needs new products to replace former big sellers like the antipsychotic Seroquel, which lost exclusivity last year.

AstraZeneca said on Tuesday it had entered into a definitive agreement to buy Omthera for $12.70 per share, or approximately $323 million, a premium of 88 percent to Omthera’s closing price on Friday.

In addition, Omthera shareholders will get “contingent value rights” (CVRs) of up to approximately $4.70 per share, or $120 million in total, depending on the success of Omthera’s experimental drug Epanova, for treating patients with very high triglycerides, a type of blood fat that is bad for the heart…..”

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“NEW YORK (AP) — Tiffany & Co. says its first-quarter net income rose 3 percent as sales improved across all regions.

The high-end jewelry company known for its blue boxes earned $83.6 million, or 65 cents per share, for the period ended April 30. That’s up from $81.5 million, or 64 cents per share, a year ago.

Excluding costs tied to staff and occupancy cuts, earnings were 70 cents per share. This easily beat the 53 cents per share analyst expected…..”

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