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IMF says Spanish recession 'may end soon'

Spain's biting recession may end soon but the outlook is tough and Madrid must do more to battle the country's unacceptably high unemployment rate, the IMF warned Wednesday. Spain's economy, still reeling from a 2008 property market crash, fell into a double-dip recession in 2011 and the unemployment rate has since soared to more than 27 percent. Prime Minister Mariano Rajoy's conservative government has pursued an austerity policy even in the face of mass protests in the streets, but it now says the recession is close to bottoming out.

IMF says Spain making progress, warns on jobs and banks

By Julien Toyer MADRID (Reuters) - Spain has made strong progress in fixing its economy but needs to do more to put millions back to work and shield its fragile banks from recession, the International Monetary Fund said on Wednesday. Echoing European Commission recommendations made last month, the IMF said the government should further reform labor laws to make it easier for firms to modify shifts or reduce wages rather than dismiss workers and cut taxes to promote job creation.

Turkey's economy is vulnerable

By Hugo Dixon LONDON, June 17 (Reuters Breakingviews) - Tayyip Erdogan seems to like the concept of "choking" things. At the weekend, Turkey's prime minister sent riot police into an Istanbul park with tear gas and water cannons to clear out the protesters. A week earlier, he had threatened to "choke" an alleged "high-interest-rate lobby" of speculators who wanted to push interest rates up and suffocate the economy.

IMF says Spanish recession 'may end soon'

Spain's biting recession may end soon but the outlook is tough and Madrid must do more to battle the country's unacceptably high unemployment rate, the IMF warned Wednesday. Spain's economy, still reeling from a 2008 property market crash, fell into a double-dip recession in 2011 and the unemployment rate has since soared to more than 27 percent. Prime Minister Mariano Rajoy's conservative government has pursued an austerity policy even in the face of mass protests in the streets, but it now says the recession is close to bottoming out.

From statement to forecasts to news conference, here's what to watch for from the Fed

WASHINGTON - Worry and speculation have consumed investors since Chairman Ben Bernanke spoke to Congress last month about the Federal Reserve's drive to keep long-term interest rates at record lows. On Wednesday, many hope the Fed will settle the confusion. Will the Fed scale back its $85 billion-a-month in bond purchases within "the next few meetings," as Bernanke suggested during his remarks to Congress? Or does the job market remain too weak for the Fed to slow its stimulus, as Bernanke said at another point?

German investors expect timid recovery

German investor sentiment rose slightly in June, on firming hopes for a gradual recovery in Europe's biggest economy in the second half of the year, the ZEW economic institute said on Tuesday. Its closely watched index rose 2.1 points from May to 38.5. This was better than expected by analysts questioned by Dow Jones Newswires, who had forecast an index of 38.1. "The financial market experts are sticking to their assessment: The German economy is likely to gain momentum in the second half of 2013," said ZEW president Clemens Fuest in a statement.

Turkey's economy is vulnerable

By Hugo Dixon LONDON (Reuters) - Tayyip Erdogan seems to like the concept of "choking" things. At the weekend, Turkey's prime minister sent riot police into an Istanbul park with tear gas and water cannons to clear out the protesters. A week earlier, he had threatened to "choke" an alleged "high-interest-rate lobby" of speculators who wanted to push interest rates up and suffocate the economy.

Spain short-term borrowing costs rise in bill auction

Spain's short-term borrowing costs rose sharply Tuesday as the Treasury raised 5.038 billion euros ($6.7 billion) in an auction of six- and 12-month bills, reflecting renewed investor concern over the ability of the recession-hit country to repay its debts. The Treasury sold 1.087 billion euros' worth of six-month bills with an average yield of 0.821 percent, up from 0.492 percent from the last similar auction held on May 14.

China May home prices rise at fastest pace this year

By Xiaoyi Shao and Jonathan Standing BEIJING (Reuters) - China's house prices rose at the fastest pace this year in May from a year earlier, though the pace of gains eased from the previous month, highlighting the dilemma facing the central bank as it balances the need to support the economy against holding down housing inflation.

Financial world looks to Bernanke this week to clarify Fed's timetable on economic stimulus

WASHINGTON - Is the era of ultra-low interest rates nearing an end? When he takes questions this week after a Federal Reserve meeting, Chairman Ben Bernanke will confront investors' fears that rates are headed higher. Financial markets have been gyrating in the 3 1/2 weeks since Bernanke told Congress the Fed might scale back its effort to keep long-term rates at record lows within "the next few meetings"— earlier than many had assumed.
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