In addition, the Euro is down over 2 cents vs. the US dollar and at a record low vs. the Swiss Franc following weekend elections in Spain and Germany that add to growing doubts about Spain's ability to implement promised austerity programs.
Asia-Pacific Equities
European Equities
Euro at Record Low vs. Swiss Franc
Bloomberg reports Euro Falls to Record Low Versus Franc on Debt Concerns, Spanish Election
The euro touched a record low against the Swiss franc as concern over Europe?s sovereign debt crisis deepened, reducing the appeal of the region?s assets.For more on the elections please see Prime Minister Zapatero?s Socialist Party Routed in Spanish Elections; Antinuclear Greens Surpass Merkel's Party in Local German Vote
The 17-nation currency reached the lowest in a week against the dollar after Spain?s Socialist party suffered its worst electoral defeat in more than 30 years and Standard & Poor?s on May 20 said it may lower Italy?s credit rating. The Dollar Index climbed to its highest in almost seven weeks as declines in Asian stocks spurred demand for safer assets.
Spanish voters punished Prime Minister Jose Luis Rodriguez Zapatero?s party for soaring unemployment and spending cuts that aimed to shield the nation from Europe?s debt crisis. With 99 percent of votes counted, the opposition People?s Party won 38 percent of the vote in municipal elections, compared with 28 percent for the ruling Socialists, the Interior Ministry said.
German Chancellor Angela Merkel?s party slumped to third place in a state election in Bremen and blamed the result on having to shoulder Europe?s debt crisis, as the main opposition Social Democrats were re-elected.
China Manufacturing Index Lowest Level in 10 Months
Bloomberg reports Chinese Manufacturing Index Drops to Lowest Level in 10 Months
A Chinese manufacturing index fell to its lowest level in 10 months, adding to signs that economic growth is cooling after the government raised interest rates and curbed lending to rein in inflation.Economic Slowdown List
The preliminary purchasing managers? index compiled by HSBC Holdings Plc and Markit Economics dropped to 51.1 in May from a final reading of 51.8 in April. A number above 50 indicates expansion.
HSBC?s preliminary manufacturing index, called the Flash PMI, is based on 85 percent to 90 percent of the total responses to its monthly purchasing managers? survey sent to executives in more than 400 manufacturing companies.
New export orders contracted in May and stocks of purchases and finished goods fell at a faster rate, HSBC said. An output gauge declined to a 10-month low, although it remained above the 50 level that divides expansion from contraction, the bank said.
Economic Slowdown in the US: Non-Manufacturing ISM Plunges Below Prediction of All 73 Economists, New Orders Collapse
Economic Slowdown in Europe: Huge Cracks in Global Recovery Thesis; Industrial Production Unexpectedly Drops in Germany, France; UK Weaker than Expected.
Economic Bust in Australia: Near-Record Corporate Bankruptcies, Employment Drops Unexpectedly; Rise in Bad Home Loans; Record Low Property Transactions
Add China to the global slowdown list.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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