What to watch for today
Central bank action. The Bank of England is expected to keep rates steady at 7 am ET as recent data have shown an economic uptick, including a better-than-expected 0.7% increase in industrial output earlier this morning. The Bank of Korea cut rates overnight, as South Korea’s export sector tries to fight off the impact of Abenomics in Japan.
G7 meets to prevent the next Cyprus. Finance ministers and central bank governors meeting in London will concentrate on bank regulation, but at least one attendee doesn’t see why they’re even bothering: “I am really annoyed that I’ve got to give up my weekend for this.”
Bangladesh braces for more chaos. A war crimes tribunal sentenced the deputy head of the Islamist opposition party to death for crimes he allegedly committed during the country’s war of independence, raising fears of more violent street protests in the still-reeling country.
Nokia’s India push. Will a new low-cost phone with “free” Facebook access be enough to challenge Android’s dominance?
Slow day for earnings.Priceline.com and NVIDIA, among others, are due to report.
Congress investigates “other Earths.” The Subcommittee on Space holds a hearing on exoplanets.
While you were sleeping
China’s inflation dilemma. Consumer prices are rising, up by a more-than-expected 2.4% in April from a year ago, but factory prices are falling. Rising food costs were the biggest consumer price driver.
The decline of Europe. The European Central Bank cut its euro zone growth forecast from 0% to -0.4% for 2013 in its monthly bulletin. Analysts nevertheless except the ECB to refrain from further rate cuts until 2015.
Pakistani pre-election violence. Gunmen kidnapped the son of a former prime minister at a campaign rally.
Sony returned to profitability for the first time since 2008 thanks to cost cuts and the weak yen, then went and ruined it by forecasting further declines in its consumer electronics unit.
Australian hiring picked up. The country’s jobless rate fell to 5.5% in April, as the economy added more than 50,00 jobs, about five times what was expected. The strong numbers lessen the likelihood of another central bank rate cut soon.
Microsoft bid for Nook? The software maker is reported to be offering $1 billion for the digital assets of its Nook Media e-book joint venture with Barnes & Noble.
Quartz obsession interlude
Simone Foxman on why Slovenia is not the next Cyprus. ”On the surface, it’s easy to compare Slovenia to Cyprus; both are small countries with problematic banking systems, and worrying about tiny economies bringing down the euro zone at the very least seems ridiculous. But their problems are quite distinct; Cyprus’s bloated financial system was closely tied to Greece, Greek sovereign debt, and investment in the Greek economy, and was crushed when the country defaulted. Slovenia’s problems look far more like the children of an asset bubble, particularly in construction.” Read more here.
Matters of debate
Go to your happy place. Brazilians are happy despite the macro-level struggles of their economy, because the middle class is growing.
America runs on debt. In the short term it’s a good thing to see borrowing picking up (paywall).
The market doesn’t know everything. “All economists tend to imbue a set of values that tends to glorify the market and demonize public action.”
Ignore forecasts. They are nothing but professional-sounding predictions and guesses.
*Shrugs* The Dow is above 15,000 and it still doesn’t matter.
We should just call them bonds. US junk bonds—known euphemistically as “high-yield”—are now returning a ridiculously low sub-5% yield.
The underside of the tracks. In India, some kids go to school under a railway bridge every day.
Merçi maman, good on ya. Europe is the best place for moms, along with Australia.
Attack of the monster rodents. Giant swamp rats are devouring Louisiana.
Our best wishes for a productive day. Please send any news, comments, suggestions, and professional-sounding guesses and hunches to firstname.lastname@example.org. You can follow us on Twitter here for updates during the day.