INFLATION

New claims for jobless benefits fell to their lowest level in nearly two years, but a sharp pullback in manufacturing activity in New York state added to evidence of a slowing economic recovery.

The Bank of Japan revised up its economic forecast for the current fiscal year on Thursday but reiterated that it will keep monetary policy easy, with deflation likely to persist at least until early 2011. The central bank kept interest rates at 0.1 percent and held off on new policy initiatives as widely expected, in a unanimous vote.

The Bank of Japan revised up its economic forecast for the current fiscal year on Thursday but reiterated that it will keep monetary policy easy, with deflation likely to persist at least until early 2011. The central bank kept interest rates at 0.1 percent and held off on new policy initiatives as widely expected, in a unanimous vote.

Sales at U.S. retailers fell for a second straight month in June and businesses wary of ebbing demand barely raised inventories in May, more evidence the economic recovery has slowed in recent months.

Yum Brands Inc expects higher labor and commodity costs in the restaurant operator's key China market in the second half of 2010, company executives said on Wednesday.

Recent evidence the economic recovery may be slowing has prompted analysts to scale back their expectations for the pace of growth into next year, a Reuters poll showed.

Kansas City Federal Reserve President Thomas Hoenig on Wednesday said that the U.S. economy will continue to recover, but it will take time to reach the Fed's targets for minimal unemployment and inflation.

The Australian Dollar climbed to its highest level in 3 weeks overnight as equities bounced upon expectations US corporate earnings will beat estimates.

The euro rose on Tuesday after a smooth Greek treasury bill auction helped ease some concerns about Europe's debt crisis and took some of the sting out of another credit rating downgrade for Portugal. A strong start to U.S. corporate earnings season also boosted general appetite for risk, traders said, while data showing the U.S. trade deficit widened unexpectedly in May weighed on the dollar.

Canada's economy created far more jobs than expected in June in a surprising sign of strength after a raft of discouraging data, fueling expectations the central bank will hike interest rates again this month.

The European Central Bank kept its main interest rate on hold at a record low of 1.0 percent for the fourteenth month running on Thursday, as expected by economists.

Gold buying has intensified on the late-June/early July sell offs and capitalising on this fall were the Asian investors, jewelry manufacturers and possibly a few central banks, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital.

CPM, a New York-based commodities analysis firm, has predicted that platinum group metals are set to make a roaring investment option in the coming years.

Signs Switzerland may still face deflation risks mean its central bank could yet resume efforts to curb the Swiss franc's strength, but it is unlikely to step in unless the euro falls below 1.30 francs. Swiss consumer price data on Tuesday showed only a limited pick-up in inflation in June. The Swiss National Bank last month cited subsiding deflation risks as a reason for ending its 15-month campaign to fight excessive franc rises.

Alan Krueger can wax poetic about data -- literally.

Gold erased early gains on Tuesday to tumble to a six-week low as selling precipitated by a sharp rebound in equities pushed the metal through key technical support levels near $1,200 an ounce. Spot gold slipped as low as $1,189.55 an ounce and was bid at $1,192.00 an ounce at 10:09 a.m. EDT (1409 GMT), against $1,206.95 late in New York on Monday. U.S. gold futures for August delivery fell $14.80 an ounce to $1,192.90.

Central banks may be the only remaining line of defense against a scary-but-remote double-dip recession threat.

A key survey of U.S. manufacturing activity fell to its lowest in six months, while contracts for pending sales of previously owned homes plunged a record 30 percent in May, far more than expected,

Asian and European manufacturing output growth cooled further in June, with China hitting its slowest pace in more than a year -- further evidence that the global economic recovery is moderating.

New Bank of Japan board member Yoshihisa Morimoto said on Thursday that it is vital for the central bank to show its resolve to beat deflation, but he stopped short of elaborating on his views on monetary policy.

Japanese business confidence was at its best in two years in the three months to June and big firms revised up capital spending plans, a Bank of Japan survey showed, in a sign the export-driven economic recovery is taking hold.