Germany concedes on Greek debt deal Bonds rally as Merkel and Sarkozy agree to voluntary rollover.
Greek Crisis Eases for Now German Chancellor Merkel, after weeks of brinksmanship over Greece, gave ground, improving the chances that the struggling country will avoid a messy debt default this year that could threaten the stability of the euro currency area.
Moody’s Puts Italy’s Rating on Watch Moody’s placed Italy on notice, warning that its sovereign rating may be imperiled by a weak economy and rising interest rates.
The Conference Board reported that its Leading Economic Indicators index rose 0.8% last month following a 0.4% April decline, initially reported as -0.3%. The breadth of increase among the components, measured by the 1-month diffusion index, increased sharply to 85%. A wider interest rate yield spread, higher building permits, higher consumer expectations and a higher money supply made the largest contributions to the May increase. Quicker vendor delivery speeds made the only negative contribution.
The so-called Misery Index, adding together unemployment and inflation rates, is at a 28-year high, hitting 12.7 in May, according to Capital Economics. Fittingly, on Friday, the University of Michigan’s early June consumer-sentiment index dropped below 72 for the first time in seven months. Anyone hoping for that second-half bounce in spending should pray falling gasoline prices offer households some relief.
ISI’s auto dealer survey suggests June vehicle sales of just 11.0m.
The Ted Spread reflects no panic.
IMF Cuts Global Growth Forecast The International Monetary Fund slightly lowered its estimate for global growth for this year to 4.3%, and said Europe’s debt crisis and unexpectedly weak growth in the U.S. pose greater dangers to the global recovery than originally forecast. The IMF revised down U.S. growth for the year by 0.3 percentage point to 2.5% and lowered next year’s growth to 2.7%.
In the ten years ending 2009, Labor Department figures show people in the bottom fifth of U.S. by income spent an average of 8.8% of their after-tax pay on gasoline and motor oil. People in the top fifth spent 2.1%.