Bloomberg Business
-Stocks: The Stoxx 600 slipped 0.6 percent, after posting is biggest four-day rally since February. The volume of shares changing hands was about 23 percent lower than the 30-day average, with the U.S. market closed for the Independence Day holiday. S&P 500 Index futures gained 0.1 percent. The MSCI Emerging Markets Index rose 0.5 percent to the highest since April. It is up 6.2 percent in five days, the best performance for the period since March 7.The Shanghai Composite Index climbed 1.9 percent. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong rose for a third day, advancing 1 percent, headed for its highest close since June 10, as trading resuming after a holiday on Friday. India’s benchmark rose 0.5 percent.
-Currencies: The Australian, Canadian and New Zealand dollars and the South African rand appreciated at least 0.3 percent, buoyed by the pickup in commodity prices. The British pound was little changed versus the dollar, after Chancellor of the Exchequer George Osborne floated the possibility of a lower corporate tax rate and before Bank of England Governor Mark Carney outlines the available macroprudential tools on Tuesday. The currency tumbled 8.1 percent in June, the most since 2008, as the U.K.’s decision to leave the EU shocked investors and triggered political upheaval in the country. Japan’s yen weakened 0.1 percent to 102.59 per dollar. It declined 0.3 percent last week as BOJ Governor Haruhiko Kuroda said more funds could be injected into the market should they be needed. The haven currency touched 99.02 in the wake of the vote for Brexit, its strongest level since 2014.
-Bonds: The yield on Australia’s 10-year government bonds increased by five basis points to 2 percent, after sinking to a record 1.95 percent in the last session. The nation’s inconclusive vote raises the prospect Prime Minister Malcolm Turnbull’s Liberal-National coalition — or the main opposition Labor Party — will be forced to work with a handful of disparate independent lawmakers in order to stay in power. Ballot counting doesn’t resume until Tuesday. The cost of insuring corporate debt fell for a fifth day, according to data compiled by Bloomberg. The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies was little changed at 79 basis points and the high-yield benchmark decreased six basis points to 344 basis points.
CNN Money
-Don’t trust Chinese economic data? A new source is coming: Chinese Internet giant Baidu is diving into the vast amount of data it collects in an attempt to give the world a clearer picture of the world’s second-largest economy. Baidu is China’s leading search engine and maps provider. Every day, it gathers 25 billion location requests and data points from around 700 million users — that’s roughly half the country’s population. And now, the company is analyzing all that information to devise its own set of macroeconomic indicators. Baidu’s massive user base «represents a good portion of Chinese consumer behavior,» said Wu Haishan, a senior data scientist at the company. «We think the government will also look forward to having other options, a way to look at this from a different angle.»
-Brexit will increase U.K.’s huge debt: This is the Brexit Britain envisioned by U.K. Treasury chief George Osborne, who on Friday abandoned long-held plans to produce a budget surplus by 2020. «We will continue to be tough on the deficit but we must be realistic about achieving a surplus by the end of this decade,» Chancellor of the Exchequer Osborne said. Osborne warned that more austerity would be needed following a shock decision by British voters to leave the European Union. Tax hikes and spending cuts are both on the way, he said. «The referendum result is as expected likely to lead to a significant negative shock for the British economy,» he reiterated Friday. «How we respond will determine the impact on people’s jobs and on economic growth.» Osborne warned ahead of the vote that an emergency budget would be needed to fill a «black hole» of about £30 billion ($42.6 billion) per year if the U.K. left the EU. Critics dismissed the warning, and accused the Treasury official of running a campaign based on fear.
-10 million people just got a 23% raise: India has just made 10 million government workers and pensioners very happy, handing out a bumper 23% increase in pay. The one-off raise, which has been approved by Prime Minister Narendra Modi, will strain India’s government budget but also provide a boost to consumer spending. The move is not without risk, however: Inflation is currently under control at roughly 5%, but more consumer spending could cause price increases to accelerate. An estimated 4.7 million government employees and 5.3 million pensioners stand to benefit from the pay hike, which was recommended by a government commission that is convened once a decade. The hikes, backdated to January 1, take the minimum salary for a government employee from 7,000 rupees ($100) per month to 18,000 ($270) per month. At the other end of the scale, cabinet secretaries and other top employees will be paid 225,000 rupees ($3,300) per month. The increases will cost the central government an estimated $15 billion during the current financial year.