Japan warns that economic recovery is on 'pause'

The Japanese Government said today that for the first time in the past two months, the country's economic recovery appears to be "on hold" amid weak exports and concern about the yen's strength. In its monthly economic survey, the Government indicates that economic activity "appears to have recently gone on hiatus" and that exports, composed mainly of electronic products and machinery, "have weakened lately." This is the first negative economic assessment made by the government since February 2009 and first used the term "hold" since July 2008, two months before the bankruptcy of Lehman Brothers, according to the local agency Kyodo. The negative review is due in part to the slowdown in the Chinese economy, Japan's largest trading partner, which has hurt other Asian nations and has affected the demand for Nippon, said an official spokesperson to present the study and the Japan economy recorvery. Thus, Japanese exports mainly consist of electronic products, machinery and motor, "have weakened lately," the spokesman added.
Japan economy recorvery
Last August, Japan's trade surplus fell for the first time in the past 15 months amid a slowdown in the pace of exports, which grew 15.8% YoY but fell more than 5% from the previous month and the Japan economy recorvery.. Moreover, "the latest data clearly show that industrial production (Japan) has worsened," the spokesman said, referring to falls sustained in the last three months and the prospects of reductions also in September and October. He also warned that the prolonged slowdown in exports and the fall in production could be reflected in the results as capital spending Nipponese companies, as well as lead to a reduction in working hours, resulting in lower wages and the Japan economy recorvery..  In the report, the Government is confident that the pause in the recovery is temporary and that the economy can continue to grow, supported by appropriate stimulation and the recovery of some foreign economies. But he added that risks remain and urged the Bank of Japan (BOJ) to "continue supporting the economy with an appropriate and flexible monetary policy."

Japan economy
The economic report was released amid concerns about a stronger yen, which is at its highest level in 15 years against the dollar despite the Japan government intervention in currency markets last month and the Japan economy recorvery.. The Japanese currency was trading today at around 81.38 against the dollar units, well below the average of 89.66 units were then determined by the major exporting companies Nipponese. Japan came in the second quarter of 2009 from its worst recession after World War II.

Morgan Stanley reported earnings slightly higher than expected

The U.S. bank Morgan Stanley on Wednesday reported a 54 percent increase in quarterly revenue, slightly surpassing market expectations.
Morgan Stanley reported aernings and  revenues of 8,000 million dollars, while analysts had expected U.S. $ 7.926 million, according to Reuters Thomson I / B / E / S.
The bank posted a profit of $ 1.09 per share, including special items.

 

Morgan Stanley profit

The entity's shares rose 2.4 percent in pre-market opening.

Specialists predict that global economy will slow

The global economy will slow in the coming months as China and the United States reduce its rate of expansion and governments around the world are trying to sort out their finances, polls showed on Wednesday, Reuters More than 600 economists.
However, it is expected that several Asian economies such as India and South Korea have better performance than expected this year than was thought a few months ago, which highlights the disparity of global economic recovery from the financial crisis and deep recession.

Reuters polls produced around the world in recent days show cuts to projected U.S. growth in coming quarters and expect the Fed will not raise interest rates until next year.

But at a general level, economists are still optimistic about the global outlook. The estimate for global growth was revised upward to 4.2 percent this year and 4.0 percent for 2011, slightly better than the estimate in a survey made three months ago.

Analysts also agree that the quarter just ended was a stronger expansion than expected, so the slowdown in the second half of the year could have a painful contrast, even when things pick up again in 2011.
"Globally, things are slowing but (...) the slowdown comes from what appears to be stronger levels of growth during the second quarter than many expected," said Dominic Wilson, director of macroeconomic research at Goldman Sachs in New York.

"The more complex issue is how far to trust a higher than expected growth outside the United States," he said.

The result is made known at a time when U.S. companies begin their season with solid earnings reports reports.

The probability of seeing a slowdown in growth coupled with benign inflation levels, implying that major central banks that interest rates remain at record lows, as the U.S. Federal Reserve and European Central Bank will keep them free changes until next year.

However, many central banks and have raised, such as South Korea, Canada, Sweden and New Zealand, and is likely to tighten policy again this year, perhaps several times in some cases.
In China, the third largest world economy, growth is expected to cool gradually as the Government withdraws its economic stimulus package implemented during the crisis. Despite this, its economy would see a 10 percent expansion this year and 9.0 percent in 2011.

However, there have been clear signs of a slowdown in global growth, especially in the last round of indices for the purchasing managers in the private sector, both for manufacturing to the service sector.
High unemployment remains one of the greatest risks to the recovery around the developed world, putting pressure on family budgets, weakened by the financial crisis and now face higher taxes in several countries.

According to the survey, the U.S. unemployment rate averaged 9 percent or more in every quarter except one, the horizon of the forecasts. Is expected to fall by 8.7 percent in the last three months of next year.

Unemployment is expected to remain around 10 percent in the euro area as well, where many governments have adopted austerity measures put under pressure to the labor market if the private sector is not strong enough.

Spain: VAT tax rises to reduce the deficit

The increased value added tax (VAT) took effect on Thursday in Spain, as part of government efforts to limit the public deficit, while the Spanish economy for weeks is under scrutiny of the institutions and markets financial, to doubt its soundness.

VAT increased by two points, from 16% to 18%, prices of many products such as appliances, leisure products and alcoholic beverages.

From 7% to 8% in food, soft drinks, hotels and catering.

Products called "first necessity" (rice, eggs, bread, fruits and vegetables) are not affected by the increase.

This increase in the VAT comes into force to coincide with the first day of summer settlements, through which traders expect to delay the first negative effects on sales.

The VAT hike was announced in September by the Socialist government of José Luis Rodríguez Zapatero and approved by parliament in December.

The measure, along with others taken by the government, will help solve the "grave and tremendous" deficit problem that has now Spain and credibility with the markets, said Thursday on the radio RNE Secretary of State for Finance, Charles Ocaña.

The government approved in May a harsh austerity plan 15,000 million for 2010-2011 and with it hopes to reduce the public deficit, which reached 11.2% of GDP in 2009 to 3% in 2013.

The VAT increase will have a "limited" in the pockets of the Spanish, according to Ocaña.

According to Spanish media, representing an average annual increase of 300 to 350 euros in the family expenditure.

Car construction companies fear a negative impact and anticipated an average reduction of 30% of sales in the second half, due to a combined effect between this increase and the end of subsidies from the government, which helped to increase sales in the first half .

Wall St falls apart in the worst quarter since the collapse of Lehman

U.S. stocks fell on Wednesday at the end of a disappointing second quarter, in another low volume session as investors found little reason to be at risk to conflicting economic data.

Wednesday's session ended like many others during the quarter, with a last-minute sell-off due to buying interest waned and investors sold the worst performers in the worst quarter since the crisis hit market the collapse of Lehman Brothers."He removed all the garbage on the side of the boat," said Peter Kenny, managing director at Knight Equity Markets.

"If I had a little extra boost, they would be able to sell these things a little more expensive and would not have this kind of pressure at the end of the day," he said.The Dow Jones industrial average fell 96.28 points, or 0.98 percent to 9774.02 points. The Standard & Poor's 500 lost 10.53 points, or 1.01 percent to 1030.71 points.

The Nasdaq Composite fell 25.94 points, or 1.21 percent to 2109.24 points.

In the second quarter, the Dow Jones lost 10 percent, while the S & P 500 and Nasdaq is down about 12 percent due to concerns about sovereign debt in Europe and the sustainability of economic recovery in United States .

The S & P fell below the 1,040 points it had held since February, which come in a technical correction to the low suggesting that there could be a further decline in the next five months.

Technology shares were among the hardest hit, in a session in which the roles of Google Inc shed 2.1 percent to $ 444.95, and Apple Inc lost 1.8 percent, to 251 , $ 53.

Data published on Wednesday showed business activity in the Midwest grew slightly more than expected in June, but a report showed weakness in private sector employment, a critical part of economic recovery.

The index of oil services sector of Philadelphia was among the few that stood out, with an increase of 0.02 percent, helped by an increase of 1.8 percent in the shares of Baker Hughes Inc, to $ 41.57.

The index has fallen 20.3 percent in the quarter, and 22.4 percent from BP Plc's oil spill in the Gulf of Mexico.

Ireland officially out of recession in the first quarter

Ireland officially out of recession in the first quarter of 2010, when its economy grew for the first time after two years of contraction, according to official figures announced on Wednesday.

The Irish economy grew by 2.7% over the previous quarter of 2009 and shrank by 0.7% in the first quarter of 2009, said the Central Statistical Office (CSO) of Ireland.

Ireland, which has long been the leader of the euro area growth, was the first country in the bloc into recession in early 2008, after the credit crisis prick a housing bubble.

Among developed countries, Ireland was one of the hardest hit during the crisis and his record falls recorded Gross Domestic Product (GDP) in 2008 and 2009.

China and Taiwan sign historic trade agreement

China and Taiwan on Tuesday signed an historic trade agreement will strengthen economic ties between the mainland and the island, separated for 60 years, and would bring them politically.

The economic cooperation framework agreement (TDCA), signed in Chongqing (southwest China), could unlock the massive business opportunities between the two parties is currently very limited, and is the fruit of two years of negotiations.

"This signing marks a turning point in economic relations between the two parties. It is also a major step forward for both the general trend in regional economic integration and globalization", said Taiwan's chief negotiator, Chiang Pin-kung .
The ACCE only talks about trade and customs duties, but some in Taiwan, especially the opposition, fear for progress towards a dangerous political era on the island and pave the way for reunification.

"This could make the island a step closer to the continent (...) To the extent that Taipei will become more dependent economically, their political choices are reduced," he said Yang Yung-ming, a political science specialist at the University Taipei's Soochow.

On Saturday, tens of thousands of people marched in the streets of Taipei to protest against this agreement, convened by the Democratic Progressive Party (independence), and defend democracy have been economically prosperous.

Taiwan is de facto independent since the arrival of the Communists to power in Beijing in 1949, although China believes that this island belongs to them and intends to reintegrate in the mother country, if necessary using force.

Bilateral relations have improved considerably since 2008, when Ma Ying-jeou, favorable to a rapprochement with Beijing, was elected president of Taiwan.

In late 2008, the two parties had already taken a historic step in opening its first direct flight connections daily.

"The tension of the past became peace. The confrontation turned into cooperation," he said on Monday Chiang Pin-kung.

The ACCE provides preferential customs duties for 539 Taiwanese products, from petrochemicals to automotive parts, which represent 16% of the island's exports to mainland China.

Similar measures shall apply to 267 Chinese products.

The improving economic climate in Portugal and falls consumer confidence

The economic sentiment indicator improved in Portugal in June and reached the highest value since September 2008, while consumer confidence fell in the same month, as reported today by the National Institute of Statistics Luso.

The INE said the economic sentiment indicator stood at 0.1 percent in June, and extended, thus continuing the recovery that began in May 2009.

For its part, the indicator of consumer confidence fell to -38.3 points in May to negative 40.1 points in June, the lowest value since a year ago.
Also expectations about economic developments in the country declined "expressly" in the past seven months, and the prospects for saving the profile observed negative lasted since November.

The Japanese economy deflated and become doubts about his recovery

The industrial production and domestic consumption in Japan fell in May while unemployment rose, suggesting that the economic recovery of the archipelago may slow due to the problems of global demand.

Industrial production fell 0.1% in May over April, said Tuesday the Japanese Ministry of Economy, Trade and Industry, after two months of rises. However, annual measure, this indicator remains solid increase of 20.2%.
Indeed, Japan's economy was revived in the second half of 2009 after one year recession, the longest since World War II.
"These figures clearly indicate that the recovery is slowing down," said economist Hiroshi Watanabe, Daiwa Institute of Education.

However, Watanabe said the economy will fall into a "new recession," noting that the Japanese government expected increases in industrial production in June (+0.4%) and July (+1%).
"But the pace of recovery will be slow to make a temporary pause, as exports were reduced by the global economic slowdown due to factors like China's decision to tighten monetary policy and lower deficits in Europe "he said.

The second largest economy saw strong growth of 5% annual pace in the first quarter thanks to strong exports to Asia and emerging countries, especially China.

But the Japanese domestic demand fails to take off, as evidenced by the further decline of 0.7% in the consumption of households recorded in May last year and announced Tuesday by the Ministry of Internal Affairs.

Purchases of appliances and furniture, one of the main drivers of consumption for months thanks to government incentives, deflated, falling 9.3% in annual pace.

Another concern is the rise in unemployment, which rose to 5.2% in May versus 5.1% in April, with 3.47 million job seekers.

According to the Ministry of Health, Labour and Social Affairs, this figure is not so bad, because in May there were 50 vacancies for every 100 claims against 48 in April.

In order to Yoshiki Shinke, an economist at the research institute, Dai-ichi Life, labor market conditions "have not materially altered."

Some analysts have noted that some people discouraged during the recession have returned to find work, which could explain the increase in official unemployment rate.

European shares rise after four sessions of losses

European stocks ended the four sessions of losses and closed higher on Monday, driven by banking stocks and a good thing for U.S. consumption, but failed to rise above a key technical level. The FTSEurofirst 300 index of top European shares rose 1.3 percent to 1026.68 points, while the Euro Stoxx 50 index rose 1.5 percent to 2668.67 points. Shares of Barclays, Deutsche Bank and BNP Paribas rose between 1.5 and 3.6 per cent, thanks to the Group of 20 relaxed the deadlines for complying with new rules of capital. Shares of Standard Chartered broke the trend, falling 1.8 percent after the lender said the recent economic uncertainty, hurt his business. Spending by U.S. consumers rose slightly in May, but something more than expected, although the savings of people peaked in eight months, suggesting that the recovery is on firm. "This week could be pretty good after the decline that we saw last week. People will continue to focus on data, especially in the price index for housing at Standard & Poor's / Case Shiller tomorrow (Tuesday) and the creation non-agricultural employment in the United States on Friday, "said Heino Ruland, strategist at Ruland Research. But the Euro STOXX 50 index failed to close on a key technical level, in a sign that the shares could resume their recent fall. "We are still trading below the 200 day moving average (the Euro STOXX 50), reflecting the weakness of the rebound. If the markets go that level the impetus for the market seem more solid," said Mike Lenhoff, chief strategist Brewin Dolphin. Among the individual increases, Telenor shares gained 4.9 percent after Merrill Lynch BofA raised its rating to "buy 'from' neutral ', noting that the telecommunications company is exposed to the best trends. (By Harpreet Bhal

G-20 currency more flexible and calls for more social spending to emerging

"We pledge to take coordinated actions to sustain growth, create jobs and achieve stronger growth, sustainable and balanced," says the draft statement.
TORONTO, June 27 .- The emerging countries with surpluses should take to loosen its currency reform, strengthen social spending and increase spending in infrastructure, according to the final report of the summit of the G20.

"We pledge to take coordinated actions to sustain growth, create jobs and achieve stronger growth, sustainable and balanced," says the draft statement.But these actions "will be different and tailored to national circumstances", recognizes the leaders of industrial and emerging countries.

In the case of emerging surplus in their current accounts, these reforms "adjusted" should serve to "increase the flexibility of the exchange rate", to "strengthen social safety nets" and "increase spending on infrastructure."

This statement comes a week after China announced its intention to loosen its exchange rate regime, taking off the yuan of trading unchanged against the dollar maintaining for nearly two years since.

France will review the taxes of the richest woman in Europe

The fiscal problems of Liliane Bettencourt, heir to the cosmetics group L'Oreal, have reached Labour Minister Eric Woerth, who is in charge of a crucial state pension reform is one of the greatest talents of the cabinet of French President Nicolas Sarkozy.
PARIS, June 27 .- France will conduct a complete review of tax returns of the wealthiest women in Europe, Liliane Bettencourt, today announced the budget minister, while a financial scandal of the heiress affect the Government.

Fiscal problems Bettencourt, heir to the cosmetics group L'Oreal, have reached Labour Minister Eric Woerth, who is in charge of a crucial state pension reform is one of the greatest talents of the cabinet of French President Nicolas Sarkozy .

Woerth's wife Bettencourt used to help manage their accounts and the minister has been accused of a conflict of interest by not ordering an investigation into taxes on multimillion old when he was budget minister, between 2007 and March 2010.

His successor in the Ministry of Budget, Francois Baroin, said the investigation would be conducted now, after one of his advisers Bettencourt told reporters that he had discovered an old bank account in Switzerland that had not been declared to the tax.

"The tax authorities will investigate all their revenues following revelations of his counsel," Baroin to Europe 1 radio.

"Get to the bottom of this.'ll Take the world to find what and where is (...) the law is equal for all and will be applied with force," he said.

Bettencourt, 87, has an estimated wealth well above the 10.000 billion euros (12.400 billion), which is managed by a team of experts.

The heiress has already said it will cooperate with the inquiry and that there were suggestions that he had broken the law knowingly.

The story came to the fore this week, after the French press published the transcript of conversations between Bettencourt and his advisers, who were secretly recorded by his butler.

Newspapers said those talks referred to shares in the Seychelles and Switzerland.

The butler made the recordings for Bettencourt's estranged daughter, who accused a photographer to take advantage of the "fragility" of his mother and deceive to strip it of 1,000 million euros. Bettencourt both the photographer and deny the accusations.

That case will go to trial next week, but the impact of family feud extended beyond the court and Woerth left fighting for his political career.

Recognized as one of the most competent ministers in the Government, Woerth received from the hands of Sarkozy's mission to reform the pension system, crucial par save the state's finances.

Opposition politicians have questioned the permanence of Woerth in a sensitive position due to his wife's connection with the ownership of Bettencourt and his own failure to investigate the heiress.

U.S. Congress agrees to historical financial reform

U.S. lawmakers forged a historic reform of financial regulation at dawn on Friday, which is a great local victory to President Barack Obama just before a global summit on the theme.

In a marathon session of more than 21 hours, lawmakers agreed to rewrite the rules of the market that will put pressure on Wall Street profits and will charge more supervisación and tighter restrictions.

The reform has yet to obtain final approval of both houses of Congress before Obama can sign it into law, which gives Wall Street one last chance to deploy his army of negotiators in Congress.
Quick approval was expected and the reform could go to Obama for signature on 4 July.

The project really has become heavier during his year of comings and goings in Congress. Drilled Democrats a wave of public disgust with the industry itself was granted big bonuses while much of the country was suffering a deep recession caused by their actions.

"We are concerned about great wealth. I worry that the great wealth have a corrupting influence, but it is satisfying to know that when public opinion is involved, will succeed," said Rep. Barney Frank, who headed the panel.

In the last hour of the meeting, lawmakers reached agreement on the most controversial sections of the project, which restrict derivatives intermediation of banks and limit their operations in an effort to protect the deposits riskier activities supported by taxpayers .

But industry won significant concessions that could loosen the rope.

The most comprehensive rewrite financial laws since the 1930s seeks to avoid a repetition of the financial crisis from 2007 to 2009, the recession and led to taxpayer bailouts of financial giants desperate.

Financial institutions will have to pay 19,000 million dollars to cover their costs.

"There is no way to see this law as a positive for the financial sector," wrote Jaret Seiberg, an analyst at Capital Concept, who nevertheless said it could have been much worse.

OPERATIONS OF RISKY LIMITS

The compromise allows banks to continue operations with exchange rates and interest rates, which represent the bulk of the direct derivatives market of 615 billion dollars.

Banks could also participate in exchanges of gold and silver and derivatives designed to cover its own risks.

They would have to separate the brokering activities engaged in agricultural trade, energy and metals, equity swaps and debt swaps unregulated certificates.

Lawmakers resolved another controversial point of the project around midnight, when they agreed that banks should face restrictions on their risky intermediation.

The project will dramatically transform the U.S. financial landscape.

Creates a new consumer protection authority and gives regulators new powers to control troubled financial companies before they can harm the economy.

While leaving intact the patched patchwork of federal regulators who failed to stop the last crisis, establishing an interagency council to monitor systemic risks to stability.

The project also requires much of the direct derivatives market, worsening the financial crisis and led to the bailout of insurer AIG by 182 000 million dollars, more accountable channels such as settlement agencies and markets.

The larger banks will have to raise more capital that will eventually help them deal with other crises.

The credit rating agencies like Moody's Corp, could see its business models in vertical positions by regulators who want to resolve conflicts of interest.

The credit card issuers such as Bank of America, are likely to reduce transaction fees charged to merchants who use their cards.

Shares of HSBC and energy led the Hang Seng relapse

Hong Kong's stock market closed today with a drop of 0.59 percent in the benchmark index on a negative day for the financial and energy shares, and in which the main component, HSBC Holdings, suffered the largest declines.

The Hang Seng fell 123.12 integers, to close at 20733.49.

The trading volume contracted again and stood at 47.786 million Hong Kong dollars, equivalent to approximately 6,100 million dollars, about 5000 million euros.

Two of the four sub-indices ended lower, with the financial which suffered further decline, by subtracting 0.80 percent, equivalent to 252.83 points and stay at 31347.69.

The commercial and industrial sub-index closed at 11166.52 points (after dropping 0.64%, 71.55 units), whereas the service ended in 40921.19 (0.28% climbing, 116.13 units) , and real estate stood at 26600.50 (up 0.08%, 20.31 whole).

Among the components of the financial sector, HSBC lost 1.51 percent, to $ 75.25 in Hong Kong. It also ended down Bank of East Asia (1.19% to 29.10) and China Life (1.11% to 35.50).

Among the signatures of the industrial and commercial sector, CNOOC fell 1.89 percent, to $ 13.52 in Hong Kong. Securities also fell PetroChina (1.10%, to 9) and China Unicom (0.97% to 10.26).

Three of the four service components finished higher, with China at the head Res Power (1.54% to 17.14).

In the property sector, Hang Lung Properties added 0.82 percent, to $ 30.90 in Hong Kong. The Bull also ended Sino Land (0.70% to 14.40), while China Overseas lost 0.76 percent to 15.76.

The Hang Seng China Enterprises Index, which groups major Chinese state, a decrease of 84.43 points, equivalent to 0.70 percent, which stood at 11935.95 integers.

China removes export incentives included 406 steel products

China announced the first elimination of export incentives from global crisis broke out in 2008, which will affect 406 products from steel to corn starch, Chinese media reported Monday.
The Ministry of Finance and State Administration of Taxation announced the end of the tax refund of such exports as of July 15 after its introduction in September 2008 to cushion the impact of the crisis and economic recession in some sectors.

This is the second bad news this week for Chinese exporters, after Saturday's Bank of China (PBOC, central) to announce a more flexible yuan could lead to a slight revaluation of Chinese currency and, consequently, affect exporters with lower margins.
However, many of the affected exports are key products of the steel industry, but also non-ferrous metals, silver powder, ethanol, corn starch, pesticides, pharmaceuticals, chemicals, plastics, rubber and glass.

These products enjoyed a rebate of between 5 and 17 per cent and most of it is raw materials or goods whose production requires high energy consumption, so the decision is in line with those announced by Beijing's efforts protect the environment.

In the steel sector will be affected at least 48 products that enjoyed a tax return of 9 percent.

Analysts say Beijing's decision was expected after its exports increased for seven consecutive months in his recovery from the crisis.
But it has caused nervousness among the mills, because one of the affected products, rolled steel, was a 25 per cent of the sector's exports in the first four months of the year and affect the larger companies.

The Chinese steel industry, which suffers from overcapacity, has undergone a series of measures against unfair competition or anti-dumping "by the United States, so that the elimination of export incentives to ditch voltages face to the G20 summit this weekend in Toronto (Canada).

European stocks boosted by positive pass mining

European shares turned positive on Wednesday, led by the mining sector, after announcing that the Prime Minister of Australia, Kevin Rudd, would give a press conference.
At 1217 GMT, the pan-European index FTSEurofirst 300 was up 0.1 percent to 1052.05 points.

The European index STOXX 600 raw materials climbed 0.5 percent.
The Australian Government is faced with mining companies for a proposal to raise royalties in the industry.

LatAm Shares plunge as weak U.S. housing data

Latin American stocks fell on Tuesday, by an unexpected drop in sales of U.S. homes that had been added to concerns about a possible loss of momentum in the global economic recovery. Investors seized upon as safe assets such as Treasuries United States, provoking a fall of 0.81 percent of the MSCI Latin American stock index to 3928.35 points. Brazil was the best performing market in the region and its benchmark stock index closed slightly lower, supported by optimistic outlook for the steel mills.

Juan Jose Resendiz, head of research at Arka in Mexico City, said that risk aversion is growing and that when the Treasury 10-year 3.20 per cent exceeded the stock market fell. Sales of second hand houses in the U.S. fell unexpectedly in May, which was a bad sign for a sustained recovery of the world's largest economy.
The United States is Mexico's main trading partner and a key economic influence in Latin America. Brazil's Bovespa index closed down 0.03 percent, while Mexico's IPC index sank 1.25 percent. The Chilean stock index, the IPSA, yielded 0.95 percent, after reaching a record high on Monday.

Analysts are concerned by signs that the U.S. recovery may be moderating. That could add to concerns about the debt crisis of Europe, and the slow movements of China to adjust its money supply growth and cool. After being beaten in April and May, Latin American shares have risen steadily since 20 May, and the MSCI Latin American index on Monday reached a maximum of seven weeks.

Before reversing the gains, the Bovespa reached its highest intraday level since May 10, leaning on the rise in steel shares. It is expected that Brazilian steel mills benefit of a new round of price hikes of some steel products, according to analysts at Banco Bradesco.
The robust growth of Latin America's biggest economy is fueling demand for building materials. CSN's shares rose 0.85 percent, while shares of Usiminas gained 0.89 percent. Shares of state-owned Brazilian energy company Petrobras fell 0.99 percent. In Mexico, America Movil's shares lost more than 1 percent, and the Cemex cement fell 2.28 percent after a surprise drop in home sales in the U.S.

OIL-Market falls below 77 dlrs, yuan effect fades

U.S. crude fell on Tuesday below $ 77 a barrel on the stock down by expectations that a gradual rise of the yuan, the Chinese currency would have a more limited impact on global demand than previously thought.

The Chinese yuan rose on Tuesday after the central bank set the daily mid-point of the currency at its highest against the dollar since a revaluation in July 2005.

The move, which followed an announcement by the Chinese authorities to allow a slow appreciation of the currency, raised hopes that China would import more goods, including raw materials.

But the yuan went down as they advanced business Tuesday, and analysts said the impact of changes would be limited, at least for some time.

"The immediate positive reaction and the euphoria associated with the news of the yuan were definitely exaggerated. So it is logical to see that the markets back yesterday's gains," said Eugen Weinberg, head of commodities at Commerzbank.

"The commodity markets again show they are under the spell and the fate of the markets (stock), which are receding. The weakness of the euro also contributes to the bottom", he added.

Exchanges in Asia and Europe fell on Tuesday. Traders said optimism about China's initiative was gone, and in addition, equity investors took profits from a peak in weeks.

The July contract for U.S. crude, which expires on Tuesday, was down to a low of $ 76.65 a barrel, down $ 1.17, before rebounding slightly, trading at 76.66 at 1000 GMT.

Crude oil for August, which will become the contract for the next month on Wednesday, decreased from 1.21 to 77.40 dollars.

August Brent crude declined $ 1.10 to $ 77.72.

On Tuesday at 4:30 p.m. Eastern Time U.S. (2030 GMT) data are reported weekly crude inventories American Petroleum Institute. A Reuters poll of analysts showed an average expectation of a fall of 1.3 million barrels.

New strike in China affects Toyota supplier

A strike at a parts supplier for Japanese cars in southern China forced Toyota Motor Corp to suspend production at an assembly plant on Tuesday, the latest in a series of interruptions on labor issues in foreign manufacturing in the country.
Since Tuesday morning, is suspended work at the Toyota plant, which has an annual capacity of 360,000 units and which makes models such as Camry and Yaris, said a company spokesman.

"No decision on when production will resume," said Toyota spokeswoman, Ririko Takeuchi.

The auto parts supplier, Denso (Guangzhou Nansha) Co. Ltd, is owned by Japan's Denso Corp, and is affiliated with Toyota Motor Corp.
The strike at the Denso plant, located in the booming Chinese province of Guangdong, is the latest in a series of industrial actions in the country that present a complex challenge for the Communist Party government, which has pledged to improve revenues, but he has fear of protests.

The plant supplies fuel injection equipment and other products to customers such as Toyota and Honda Motor Co and has stopped sending parties since Monday, Denso spokeswoman, Yoko Suga.

Honda spokesman in China, Takayuki Fujii, said that if the cessation of production stood at Denso, also could end the inventory on suppliers of parts for Honda auto factories.
In recent weeks, strikes have broken out in a Honda supplier of locks in Gosei plant that makes parts for Toyota, and in Chongqing Brewery Co Ltd, among others. All have been resolved.

STRIKE will be maintained

The cessation of activities continue for the rest of the week, said a worker in the flat Denso, adding that employees are demanding a salary hike of between 1,100 and 1,300 yuan (161-191 dollars) per month between 1800 and 1,900 yuan.
"We have a good life here, but we believe that our pay should be linked to company performance," said one employee, who declined to be named for fear of reprisals. "The company makes a lot of money and should share the profit," he added.

The direction of the Denso plant was negotiating with the workers' demands for higher salaries and better benefits, Suga said. The firm has about 1,100 employees.

Euro yields since more than one month against the dollar, pound falls

The euro eased from a peak a month against the dollar on Tuesday, the yuan at a low a day after China's pledge to loosen its currency risk encouraged demand, while the pound fell to a session low following the announcement of its new fiscal budget.

The rally Monday at the sight of the euro and the currencies of high risk, including the Australian dollar was sold as investors recognized that a more flexible yuan would not lead to a sharp appreciation of Chinese currency.

"A moderate appreciation of the yuan will not change the situation of China's current account and does not mean the end of global imbalances," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.

"Therefore, no need for a significant impact on the euro / dollar and dollar / yen. There should be a reassessment to have a big impact on," he said.

The midpoint of the yuan was set at 6.7980 per dollar on Tuesday, the highest since its revaluation in July 2005, but the Chinese currency Monday's gains erased by large purchases of dollars from state banks.

At 1134 GMT, the euro was down 0.2 percent at $ 1.2271, after falling to 1.2259. The single currency back from its peak of $ 1.2490 Monday, its highest level since May 24 after failing to pass the $ 1.25 level.

Dealers said the euro would face more losses, but technical analysts argued that the level of short-term support is at $ 1.2253.

The euro reacted little to the index of German Ifo business climate, which rose slightly to its maximum of two years in June.

"The positive surprise Ifo index did not change the negative tone of the market. The fact that the expectations component was bassist did not help to support the single currency," said analysts at Credit Agricole CIB in a note.

The euro was down 0.6 percent against the Japanese currency to 111.29 yen.

The Swiss franc extended gains to a record high against the euro, after the Swiss central bank vice president argued that the institution did not have to intervene in the market for now.

The euro slipped to a low of 1.3618 francs, according to Reuters data.

The pound fell to a session low of $ 1.4692, after the British Finance Minister, George Osborne, announced the first budget the new government, expected to be the tightest in decades because of the promise of reduce the fiscal deficit.

The dollar index was up 0.2 percent to 86.129, rebounding from a one-month low on Monday. Analysts said this suggested further progress in the short term.

But the dollar lost almost 0.3 percent to 90.55 yen.