Bloomberg:
- PBOC Shines Light on Risks in $8 Trillion Shadow Loan Market. China’s central bank is expanding the fight to monitor and control risks emerging in the burgeoning market for loosely-regulated shadow lending. The People’s Bank of China has started collecting data from the murky world of online financing, in which firms make loans for everything from weddings to mining projects. It’s a growing part of a shadow banking market that ballooned 30 percent last year to 53 trillion yuan ($8.1 trillion), or four-fifths the size of the economy, Moody’s Investors Service data show. The PBOC also wants to make trading in some commercial loans transparent by building an exchange for transactions, according to local media reports. The PBOC has switched gears from stimulating growth in an easing cycle that started late 2014 to clamping down on the financial and debt risks that threaten to derail a tenuous stabilization in the world’s second-largest economy. The monetary authority is taking on an expanded role among watchdogs as top leaders plan an overhaul of the nation’s regulatory structure. "The central bank feels the urgency to improve oversight," said Lu Zhengwei, chief economist at Industrial Bank Co. in Shanghai. "Online financing remains in the shadows, but an increasing number of the public who are more vulnerable to defaults than institutional investors are joining for the sake of high returns."
- Yuan on Verge of Five-Year Low as Fed Concern, Economy Take Toll. (video) The yuan drew close to eclipsing the lows reached during January’s turmoil as factory data failed to damp concern about the economic outlook and speculation mounted that the Federal Reserve is preparing to raise interest rates. The Chinese currency fell 0.05 percent to 6.5815 a dollar as of 5:11 p.m. in Shanghai, about 0.2 percent away from its five-year low in January. The exchange rate dropped as much as 0.25 percent on Wednesday, but pulled back amid talk of state support as well as a surge in the euro. Manufacturing gauges released Wednesday showed activity remained subdued in May, after April economic data trailed estimates. Investors are now predicting a 53 percent chance the Fed will raise interest rates at its July meeting, up from 26 percent a month ago. The U.S. and China will hold their annual economic meeting next week.
- Macau Casino Revenue Falls More Than Estimates on Tighter Rules. Macau’s gaming revenue dropped more than analysts’ estimates in May, as tighter rules affecting gamblers increased the challenges for the city’s casinos including those owned by Galaxy Entertainment Group Ltd. and Wynn Resorts Ltd. Gaming stocks extended losses in Hong Kong. Gross gaming receipts fell 9.6 percent to 18.4 billion patacas ($2.3 billion), completing a two-year decline, according to data from Macau’s Gaming Inspection and Coordination Bureau. That followed a 9.5 percent decrease in April and compares with the median estimate of an 8 percent drop by analysts surveyed by Bloomberg.
- Brexit Backers Promise Immigration Overhaul as Remain Stalls. Campaigners to get Britain out of the European Union promised to implement a points-based immigration policy to limit the number of people entering the U.K. if the country votes to leave the bloc in this month’s referendum. With the June 23 vote just three weeks away, the “Leave” campaign is focusing its fire on immigration, the area where polls show it has an advantage.
- Euro-Area Manufacturing Near Stagnation Signals Slowdown Ahead. Manufacturing in the 19-nation euro area barely grew in May, damping confidence in the strength of the region’s economic recovery, according to Markit Economics. A Purchasing Managers Index slipped to 51.5 from 51.7, the London-based company said on Wednesday. The reading is in line with a May 23 estimate and just above the 50 threshold that divides expansion from contraction. The euro area’s economic health will be under review on Thursday when European Central Bank officials gather in Vienna to set monetary policy. After President Mario Draghi announced a fresh round of stimulus in March and the economy expanded at the fastest pace in a year in the first quarter, analysts predict interest rates and asset purchases will remain unchanged this time.
- Renzi's Bank Rescue Is On Thin Ice. The credibility of Italy's rescue plan for its banking system is being stretched thinner than a strand of vermicelli. Reality is bound to catch up, sooner or later.
- OECD Chief Gurria Says World Recovery Failing to Pick Up in 2016. (video) The Organisation for Economic Cooperation and Development chief Angel Gurria says the global economic recovery won’t pick up this year and will improve only slightly in 2017 as trade fails to revive. The world economy will expand 3 percent in 2016, the same pace as last year, and will only improve “a little” next year, Gurria said in an interview with Bloomberg Television in Paris.
Zero Hedge:
- What A 'Carve-Up' - Economists Fake-Panic Over Brexit.
- July Rate Hike Odds Rise As Beige Book Signals "Tight Job Market", "Modest Growth".
- "Clients Still Don’t Believe The Rally" - Smart Money Sells Stocks For Record 18th Consecutive Week. (graph)
- World's Largest Asset Manager Downgrades Global Equities To Neutral.
Reuters:
- Fed records show dozens of cybersecurity breaches. The U.S. Federal Reserve detected more than 50 cyber breaches between 2011 and 2015, with several incidents described internally as "espionage," according to Fed records. The central bank's staff suspected hackers or spies in many of the incidents, the records show. The Fed's computer systems play a critical role in global banking and hold confidential information on discussions about monetary policy that drives financial markets. The cybersecurity reports, obtained by Reuters through a Freedom of Information Act request, were heavily redacted by Fed officials to keep secret the central bank's security procedures.
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