Chinese loans and Japanese machinery orders fall, Greek credit rating cut

The week's economic reports started on a negative note.

China reported a fall in new loans for May. From AFP/CNA:

New loans issued by Chinese banks fell sharply in May from the previous month, the central bank said Monday, in a sign Beijing's efforts to stem a flood of credit in the economy are bearing fruit.

The country's banks handed out 551.6 billion yuan (US$85.14 billion) in loans in May compared with 739.6 billion yuan in April -- and 100.5 billion yuan less than a year earlier, the People's Bank of China said in a statement...

The broadest measure of money washing around the economy, M2, rose 15.1 per cent at the end of May compared with 15.3 per cent at the end of April, the central bank said, in another sign of slowing credit.

Data from Japan was also negative. Again from AFP/CNA:

Japan's core private-sector machinery orders, a leading indicator of corporate capital spending, posted a surprise decline of 3.3 per cent in April, government data showed on Monday.

The negative core data, which exclude volatile demand from power companies and for ships, followed a revised 1.0 per cent gain in March and missed forecasts for a 1.2 per cent increase, according to a Dow Jones Newswires poll.

And Greece's credit rating has been downgraded again. Bloomberg reports:

Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history.

The move to CCC from B reflects “our view that there is a significantly higher likelihood of one or more defaults,” S&P said in a statement yesterday. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”