China to Suspend Bank Lending Rules in Order to Accommodate Growth

“China delayed tightening bank capital rules to the beginning of next year, signaling support for loan growth as policy makers seek to arrest a slowdown in the world’s second-largest economy.

New draft rules from the China Banking Regulatory Commission aim to set “reasonable” schedules for banks to meet capital targets in a way that helps “maintain appropriate credit growth,” the government said on its website yesterday, without giving a deadline for compliance. The rules, announced in August, had been set to go into effect on Jan. 1, 2012.”

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The Aussie dollar is up on strong employment  numbers and yesterday’s strong GDP data. Of course the speculation of world easing helps too.

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The Euro is firmly above the 1.25 mark as bond auctions across the pond go off well.

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“Oil rose in New York after China cut benchmark lending and deposit rates for the first time since 2008, while policy makers in the U.S. and Europe indicated they may take steps to boost their economies.

West Texas Intermediate futures gained as much as 1.8 percent, reversing earlier declines after the People’s Bank of China said on its website that the benchmark one-year deposit rate will drop by 0.25 percentage points from tomorrow. Federal Reserve Vice Chairman Janet Yellensaid the U.S. remains vulnerable to setbacks that may warrant additional monetary stimulus. European Central Bank President Mario Draghi said officials are ready to act as the euro area’s outlook worsens.”

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An insider revealed after a meeting yesterday that both Bernanke and Geithner were very worried about Europe’s debt problems. Among the topics discussed the most important was:

“One of the issues which we talked most was how to deal with the banking sector in Spain or in some other European countries because we should avoid a new banking crisis,” Katainen said. “This is an issue which we are considering right now.”

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World Markets

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Yields for Italy, Spain, France,  and Germany …

Asian stocks climbed, with the benchmark regional gauge heading for its biggest three-day gain this year, as global policy makers signaled they may take steps to stimulate economic growth.

BHP Billiton Ltd. (BHP), the world’s largest mining company, advanced 1.8 percent in Sydney as Australian employment unexpectedly rose in May, driven by hiring amid the nation’s minerals boom. Mitsubishi Corp. (8058), the No. 1 Japanese trading house, rose 1.4 percent and Komatsu Ltd., a mining-equipment maker, gained 1.9 percent in Tokyo as investors bought shares of companies with profits closely tied to economic growth.

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UNLEASH THE CLAM! WE GO HAM!

The dollar was within 0.2 percent of a one-week low against the euro on bets Federal Reserve Chairman Ben S. Bernanke today may signal more stimulus is needed to spur a recovery in the world’s largest economy.

The yen declined versus most of its 16 major counterparts as Asian stocks extended a global rally, damping demand for lower-yielding currencies. The euro remained higher after its biggest gain in three months against the yen yesterday amid speculation the European Central Bank will act to rein in the region’s debt crisis after leaving its benchmark interest rate at a record low. Australia’s dollar rose after data showed the nation’s employers unexpectedly added workers in May.

“The U.S. dollar is certainly susceptible to indications that the Fed is looking at QE3, considering that long positions have been built up to near-record levels,” Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd, said referring to a third round of debt purchases known as quantitative easing. “It’s the rhetoric that really matters for markets.”

The dollar traded at $1.2563 per euro as of 1:06 p.m. in Tokyo after sliding 1 percent to $1.2582 in New York yesterday, when it touched $1.2586, the weakest since May 28. The U.S. currency added 0.2 percent to 79.35 yen. The 17-nation euro was at 99.68 yen from 99.63 yesterday, when it advanced 1.6 percent, its biggest gain since Feb. 24. The Australian dollar strengthened 0.2 percent to 99.50 U.S. cents.

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STIMULUS BIATCH!

China’s stocks rose the most in a week after the government delayed tightening bank capital rules and investors speculated monetary policy will be eased to limit the effects of Europe’s debt crisis on the economy.

Industrial & Commercial Bank of China Ltd. and China Vanke Co. led gains for lenders and developers after regulators postponed stricter rules until the beginning of next year in a move that may bolster loan growth. China Cosco Holdings Co., the biggest shipping company, advanced as European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s outlook worsens. The stock market’s gains were limited before Chinese data this weekend that may show a deepening slowdown in the world’s second’s biggest economy.

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Asian stocks advanced the most in more than two months as oil and copper climbed on speculation policy makers around the world will take steps to revive the slowing economy. The Australian dollar rose to a three-week high after employers unexpectedly added jobs in May.

The MSCI Asia Pacific Index increased 1.5 percent by 1:06 p.m. in Tokyo, rising for a third day and heading for its biggest gain since March 27. The Nikkei 225 Stock Average added 1 percent, while Standard & Poor’s 500 Index futures rose 0.3 percent. Oil gained 0.6 percent in New York and copper rallied 0.6 percent. The Aussie strengthened 0.2 percent against the U.S. currency, while the cost of insuring Australian corporate bonds from default declined the most since Feb. 1.

European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s growth outlook worsens. Federal Reserve Vice Chairman Janet Yellen said the U.S. economy “remains vulnerable to setbacks” and may warrant additional monetary stimulus. Indian Prime Minister Manmohan Singh pledged to revive growth in Asia’s third-largest economy through infrastructure spending. The number of people employed in Australia rose by 38,900 last month, the statistics bureau said.

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Wisconsin Governor Scott Walker said today his victory in yesterday’s recall election sets the stage for Mitt Romney to be competitive in his state in November’s election, while the presumptive Republican presidential nominee saw broader national implications to the result.

“I think he’d acknowledge he’s an underdog, particularly here in Wisconsin,” Walker said of Romney on MSNBC. “But I think anyone looking at the results last night would also acknowledge that it’s now competitive in Wisconsin.”

Romney, speaking at a fundraiser today in San Antonio, Texas, said the Wisconsin vote will “echo” throughout U.S.

“Yesterday was won by the people of Wisconsin doing the right thing and voting for conservative principles,” he said. “I think people recognize we just can’t keep going down the same path that we’re on. It ends up in calamity.”

Walker’s win prompted Democratic and Republican strategists to reassess Wisconsin’s political landscape and the role the state will play in the presidential race. Until earlier this week, target states listed by President Barack Obama’s campaign didn’t include the state, which has voted Democratic in the past six presidential elections, albeit narrowly at times.

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Australiaunexpectedly added workers last month, capping the best January-to-May period of hiring in five years and prompting traders to pare bets on interest-rate cuts as the local dollar stages its strongest rally this year.

The number of people employed rose by 38,900 in May, after a revised 7,000 gain in April that was lower than previously reported, the statistics bureau said in Sydney today. The median estimate was for no change in employment in a Bloomberg News survey of 23 economists. Thejobless rate rose to 5.1 percent from a revised 5 percent in April as participation increased.

The local currency jumped 2.5 percent this week as the jobs data and a gross domestic product report showing the economy expanded 1.3 percent last quarter, more than twice the level forecast, underscore the nation’s resource-fueled growth. Reserve Bank Governor Glenn Stevens cut interest rates by 75 basis points in the past two meetings, to 3.5 percent, to shore up the economy as the outlook in Europe andChina deteriorates.

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Jez Liberty is out with another breakdown of the state of trendfollowing. His analysis covers “over 50 instruments across Equities, Interest Rates, Currencies, Agriculturals, Metals and Energies, from around the world.”

Read the article here.

$HOV shares surged today 25% as it posted its first quarterly profit in 2 years.

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Click here for charts.

This guy is a genius and this is his insight into China’s role in the world economy

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Analysts at ING outline six possible endgames for the Euro Zone.

“Hold the phone, anti-war activists. President Obama says that American troops are done with Operation Iraqi Freedom and their episode in Afghanistan is almost over. Now, though, it looks like the US is calling its operation in Pakistan an actual war.”

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“Spain is warning that Europe‘s single currency will unravel unless its leaders decide within weeks to centralise budget and tax policies in the eurozone and agree on a strategy to pool responsibility for failing banks.

As Spain’s prime minister, Mariano Rajoy, came under mounting international pressure to accept the eurozone’s fourth national bailout in two years, the government in Madrid angrily rejected the demands, insisting that it did not need rescuing. With fears of a euro meltdown having rapidly shifted from Greece to Spain, Rajoy is pleading for a direct eurozone rescue of his country’s banks, to avoid the humiliation attached to requesting a national bailout.”

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