- Russian Forces Back Off Ukraine Border as Fighting Rages. Russia has pulled back most of its troops from the border with Ukraine, according to a U.S. defense official, as government forces continued a campaign to wipe out separatist rebels in the former Soviet Republic’s east. A “majority of the Russian forces” have been withdrawn from the Ukrainian border, Rear Admiral John Kirby, a Pentagon spokesman, told reporters traveling to Singapore with U.S. Defense Secretary Chuck Hagel. About seven battalions of Russian troops, or “several thousands,” remain, he said. Russia’s withdrawal may be marred by a gas dispute. Talks with Ukraine in Berlin today won’t advance, Ukrainian First Deputy Energy Minister Yuri Zyukov said yesterday.
- Abe Offers Japan’s Support to Southeast Asia on Sea Disputes. Prime Minister Shinzo Abe said Japan would spare no effort in helping Southeast Asian nations secure the seas and pledged strong support for the Philippines and Vietnam in their maritime disputes with China. “Japan will offer its utmost support for the efforts of the countries of Asean as they work to ensure the security of the seas and the skies, and thoroughly maintain freedom of navigation and freedom of overflight,” Abe said in Singapore today, referring to the 10-member Association of Southeast Asian Nations. Abe’s speech to defense officials at the Shangri-La security forum comes at a time of rising tensions over China’s assertiveness in the East and South China Sea.
- Vietnam Prepares Legal Action Against China, Prime Minister Says. Vietnam has prepared evidence for a legal suit challenging China’s claim to waters off the Vietnamese coast and is considering the best time to file it, Prime Minister Nguyen Tan Dung said yesterday in an interview. “We are prepared and ready for legal action,” Dung said, sitting in the prime minister’s compound in Hanoi in front of a bronze bust of Ho Chi Minh, the founder of communist Vietnam. “We are considering the most appropriate timing to take this measure.”
- Brazil Growth Slowed in First Quarter as Investment Fell. Brazil’s economic growth slowed in the first quarter as President Dilma Rousseff, who is up for re-election in October, struggles to rebuild confidence that led to the biggest decline in investment in two years. Gross domestic product increased 0.2 percent in the first quarter, the equivalent to 0.8 percent on an annual basis, down from a revised 0.4 percent in the last three months of 2013. The result was in line with the median estimate of 41 analysts surveyed by Bloomberg. Investment fell 2.1 percent in the quarter.
- Vale Set for Worst Losing Streak Since 2008. Vale SA (VALE5), the world’s largest iron-ore producer, is posting its worst streak of monthly losses in five years as prices for the steel-making ingredient sink. The shares fell 3.2 percent to 25.79 reais at 11:42 a.m. in Sao Paulo today, bringing losses this month to 2.4 percent. The stock is now set for its seventh monthly drop, the longest losing rout since 2008. Brazil’s benchmark Ibovespa gauge is up 0.2 percent this month, its third straight gain. Iron ore sank 4.1 percent today to $91.80 a dry ton and has lost 13 percent in May, a sixth monthly retreat. That’s the longest losing run since the data series began in November 2008. The commodity is down 32 percent this year, entering a bear market in March as the biggest miners raised output, spurring forecasts for a rising global surplus while slowing growth in China capped demand. “The best way to begin to understand Vale’s weakness is to look to China,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $366 billion, said in a telephone interview. “If China were to decelerate further, it’s reasonable to expect pressure on commodities to continue.”
- European Stocks Little Changed for Seventh Weekly Gain. European stocks were little changed, with the Stoxx Europe 600 Index advancing for a seventh week, as a better-than-expected report on U.S. business activity offset consumer-confidence data that missed forecasts. Societe Generale SA slipped 2.2 percent after Les Echos reported that the French bank’s Russian unit posted a decline in first-quarter profit. BNP Paribas SA fell 2.4 percent as a person familiar with the matter said U.S. authorities are seeking more than $10 billion from the bank to settle investigations into dealings with sanctioned countries. Rio Tinto Group and BHP Billiton Ltd. slid as a gauge of commodity producers declined the most on the Stoxx 600. The Stoxx 600 fell 0.1 percent to 344.24 at the close of trading.
- Moody's Warns on EU New Banking Rules. Rating Agency Says Directive Could Leave Stakeholders Vulnerable to Banking Crises. Moody's Investors Service Inc. has become the latest of the three big debt rating firms to warn that new European Union rules could make stakeholders more vulnerable to losses in any future banking crisis. In response to the EU's so-called Bank Recovery and Resolution Directive, under which shareholders, bondholders and some depositors may have to stomach big losses or commit to so-called bail ins to help rescue ailing banks, Moody's has cut its long-term rating outlook on 82 European banks to negative. That means the...
- Shinseki resigns over growing VA scandal. President Obama announced Friday that embattled Veterans Affairs Secretary Eric Shinseki would take the fall for the rapidly growing scandal over veterans' health care, accepting his resignation under pressure from members of both parties. The president announced that Shinseki would resign after they met at the White House and he received an update on an internal review of the problems at the VA. The review showed the problems were not limited to just a few facilities, Obama said, adding: "It's totally unacceptable. Our veterans deserve the best."
- Fast food CEO: Minimum wage hikes closing locations. CKE Restaurants' roots began in California roughly seven decades ago, but you won't see the parent company of Carl's Jr. and Hardee's expanding there much anymore. What's causing what company CEO Andy Puzder describes as "very little growth" in the state? In part it's because "the minimum wage is so high so it's harder to come up with profitable business models," Puzder said in an interview. The state's minimum wage is set to rise to $9 in July, making it among the nation's highest, and $10 by January 2016.
- CEO Confidence Tumbles To 2014 Lows. (graph)
- Don't Mention The "R" Word. (graph)
meps:
- Steel Price Hike in U.S. Heightens Import Threat from China. US flat product producers have successfully implemented at least a proportion of their latest round of proposed increases. However, the upward movements now appear to have stalled. Local supply is slowly returning to normal and the recent hikes, together with expanding domestic delivery lead times, have spurred an interest in imported material.
- Real Slides on Swaps; Bovespa Suffers with GDP. Brazil's real fell the most among Latin American currencies on Friday as investors tried to curb losses related to the expiration of currency swaps next week, while Brazilian stocks suffered with weak economic data and a fall in iron-ore prices.
- Brazil Vehicle Sales Fall 11% Y/Y in May.
- China's Instant Messaging Cos. to Crack Down on Rumors. Tencent's WeChat, NetEase's Yixin and other 5 instant messaging applications vowed to clean up illegal contents after the nation's public security ministry started to crack down on spreading rumors or information of violence, terrorism, pornography and fraud from May 27, citing the companies.
- CBRC Official Says China Property Loan Risk Controllable. China will not relax or offer discounts for property development loans or mortgages, citing an official at China Banking Regulatory Commission. China must "strictly" control risks from property loans, CBRC says in its 2013 annual report issued today.
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