Markets Live: Stocks claw back losses 5:00pm: The European Central Bank is "ready to act" if need be to aid the eurozone economy and recent signs of market stabilisation mean that its interest rates are becoming a more effective tool again. Speaking at a farewell conference for Bank of Israel governor Stanley Fischer in Jerusalem, Draghi said there were numerous measures the ECB could and would deploy if needed. The euro fell after his comments, which broadly reiterated the bank's commitment at last month's policy meeting to take action if necessary. Draghi said the calming effect of the ECB's government bond purchase program on markets as well as economic reform had eased the emergency settings which have undermined its ability to affect costs of borrowing for companies and households. "We have been able to regain better control of monetary conditions in the euro area economy, which is very important for providing the appropriate monetary policy impulse to the economy," Draghi said in a speech. 4:39pm: So was the Reserve Bank trying to talk the Australian dollar down through its June minutes today? RBS senior currency strategist Greg Gibbs says the RBA's board members would have "chosen their wording carefully in the hope that it might cause the currency to weaken." 4:14pm: Japan's Nikkei has closed minimally lower after another bumpy session, as nervous investors fretted about a trimming of US monetary stimulus in the run up to a Federal Reserve policy meeting. The Nikkei slipped 0.2 per cent to 13,007.28 points after trading as high as 13,139.48 earlier. Meanwhile, European stock index futures are pointing to a lower start. Futures for the Euro STOXX 50, Germany's DAX and France's CAC were down 0.3-0.4 per cent. Futures on Britain's FTSE 100 were flat. Wall Street futures are 0.1 per cent higher. 4:07pm: The Australian dollar has been struggling this afternoon, holding just above 95 US cents after the currency got the cold shoulder in minutes of the Reserve Bank of Australia's June policy meeting. Already under pressure, the Aussie fell as far as 95.00 US cents after the minutes showed board members thought it is possible that the currency would depreciate further over time as the country's terms of trade declined. It was knocked hard overnight after an FT report said the Fed was likely to signal it would slow the pace of asset purchases in September (see blog post at 10.55am). While the author of the FT report later tweeted that it was just an opinion piece and he did not have any inside information, the speed of the move showed just how sensitive markets are to any hint of a pullback in stimulus. All eyes are now on whether Fed chairman Ben Bernanke manages to calm market nerves after the June 18-19 policy meeting. If successful, traders said the Aussie could be in for a swift bounce as the market will be forced to cover extremely short positions. Under those circumstances, the Aussie dollar could probably put on a couple of cents to 98.00 US cents. We could see a move up to that level if we see a further short covering move," said Ray Attrill, currency strategist at NAB. 3:45pm: Holden will ask its Adelaide workforce to take a pay cut to help its assembly plant remain viable. The company says it costs $3750 more per car to build vehicles in Australia compared with elsewhere in the world. ""Our manufacturing costs are simply too high,"" managing director Mike Devereux says. ""Australia is certainly one of the most expensive places in the world to build things." Any changes to wages and conditions will require a vote by the workforce. Holden recently announced plans to axe 400 jobs at its Adelaide vehicle assembly operations and a further 100 at its product development facility in Melbourne in the face of tough market conditions. 3:31pm: The region's share markets are trading mixed ahead of the Federal Reserve meeting: Japan (Nikkei): -0.6% Hong Kong: -0.7% Shanghai: flat Taiwan: +0.3% Korea: +0.6% India: -0.1% Singapore: +1.3% New Zealand: +0.3% ""We will see continuous volatility amid concern the Federal Reserve will soon taper stimulus,"" says Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank. ""A withdrawal would be an issue for companies seeking financing. The Chinese government isn't bent on growing credit. It's quite tough as they attempt to reduce the housing bubble and excess capacity in other industries."" 3:16pm: The surprisingly fast rise on Chinese house prices (+6%) came despite tougher government curbs and is constraining the ability of policy makers to ease credit in response to weakening economic growth. The central bank today refrained from adding cash to the financial system and money-market rates reached the highest level in seven years this month, a liquidity squeeze that Fitch Ratings says may accelerate a banking crisis. ""The government is in a dilemma right now,"" said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura. ""It's difficult for China to tighten the property market, while it also needs to bolster the economy, which has a strong reliance on property."" 2:42pm: The missed growth forecast aside, the RBA minutes are relatively upbeat - but there is an intriguing warning on Japan, says Michael Pascoe: The day before the release of the March quarter national accounts, the Reserve Bank mandarins told their board to expect growth "at close to, or a little below, trend pace." That forecast turned to have been too optimistic, more optimistic than most of the private sector prognosticators, but the RBA is big enough to admit the miss in the board minutes released today. The missed forecast aside, the minutes are relatively upbeat: our trading partners growing at close to average pace and expected to pick up gradually, exports growing, the dollar easing, more signs of a pick-up in housing on the way and no surprises in the federal budget. All up, in those circumstances, it was reasonable to leave rates unchanged, albeit with the now-usual caveat of the bank being ready and able to loosen monetary policy further if necessary. Which leaves the most intriguing paragraph in the minutes for consideration: a warning that Abeconomics could have a sudden a perhaps large impact on our dollar and bond markets. 2:26pm: Developer Lend Lease has tried to reassure investors its earnings will grow this financial year despite a restructure to deal with a slowing construction market. The company's shares dropped 7.5 per cent on Monday after it said construction earnings were affected by a slowdown and announced a streamlining of its Australian construction business that is likely to involve job cuts. Today, the company said its overall earnings in the year to June 30 would meet analyst expectations. ""Lend Lease confirms it is on track to deliver a solid result in line with market expectations for FY13,"" it said in a statement. ""This is based on a range of published analyst earnings expectations which converge on $540-$550 million and the published Bloomberg median of $547 million."" Lend Lease made a net profit of $501.4 million in the 2011-12 financial year. The company operates property and construction businesses across the world. Despite the statement on its overall earnings, Lend Lease shares are still down another 1.6 per cent at $8.515. 2:19pm: Rare earths miner Lynas Corporation has dropped defamation action against a Malaysian green group. In April last year, Lynas initiated legal proceedings against Save Malaysia Stop Lynas. Two months later, independent media website Free Malaysia Today apologised for running stories sympathetic to the activists, who opposed plans for a processing plant. Lynas Corporation chief executive Eric Noyrez on Tuesday said solicitors had been instructed to discontinue legal action against the activist group. ""There is no value in continuing disputes with members of our local community,"" he said in a statement. ""Therefore, Lynas intends to instruct its solicitors to discontinue its defamation claim against the Save Malaysia Stop Lynas group."" Still, Mr Noyrez said the green group's comments had created fear, ahead of the plant starting operations in November 2012. Lynas shares fell 2.3 per cent to 43 cents in afternoon trade. 1:51pm: Papers will be filed in court next week claiming ANZ Bank New Zealand has been charging excessive fees to its customers. The Fair Play on Fees campaign, which attracted more than 25,000 registrations when it was launched in March, says the case will claim repayment of default fees charged by both ANZ and its former subsidiary National Bank over the past six years. They include fees for unarranged overdrafts or rejected payments, as well as late payment or exceeding a credit limit on credit cards. ""ANZ has overcharged hundreds of millions of dollars over the past six years,"" Fair Play on Fees lawyer Andrew Hooker said. ""Their customers have come to us in droves, with over 11,000 signing up in the past three months. We expect thousands more to join them over the next week."" Locally, ANZ shares are down 1.3 per cent to $28.08. 1:39pm: Here's a slightly scary lunchtime read: China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead. The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing. There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling. 1:27pm: Low interest rates and an upswing in the property market have resulted in the NSW state government budgeting to receive a record $5 billion in stamp duties in the year ahead, with the strong market expected to continue over the next three years. The government is expecting revenues from stamp duties to top $6.2 billion in the four-year forward estimates period, reflecting its optimism in the outlook for a continued turnaround in the property market. Low interest rates and a strong momentum in sales activity towards the end of the financial year have fuelled part of the government's optimism about the near-term outlook for revenues here. This will help drive the expected rise in the state government's overall tax revenues to $23.4 billion for 2013/14 - up from the $21.8 billion expected for 2012/13. 1:16pm: US President Barack Obama said Federal Reserve Chairman Ben Bernanke has stayed in his post "longer than he wanted," one of the clearest signals the central bank chief will leave when his current term expires next year. "Ben Bernanke's done an outstanding job," Obama said, when asked about nominating him for another term subject to Senate approval. He's already stayed a lot longer than he wanted or he was supposed to. Bernanke was initially nominated to the post by former President George W. Bush. Obama asked Bernanke to serve another term as chairman, which he began on February 1, 2010. The 59-year-old former Princeton University professor and Great Depression scholar also served on Bush's Council of Economic Advisers. Using extraordinary powers, Bernanke took the assets of troubled financial firms Bear Stearns and American International Group onto the Fed's balance sheet and rolled out several emergency lending facilities to pump cash into a banking system where confidence had been shattered by the bankruptcy of Lehman Brothers in September 2008. 1:09pm: By the midday break, the Nikkei slipped 0.7 per cent to 12,941.80 after trading as high as 13,139.48. It climbed 2.7 per cent on Monday, lifting the index out of a bear market. "There was no reason to be bullish this morning, other than a couple of reverse trades," a Tokyo-based trader said. Volatility is ongoing and we will have this kind of days until the (upper house) election in July ... People are also looking at the FOMC. 12:58pm: The state government has lifted the payroll tax threshold while removing indexation - meaning more small business owners will be subject to the tax in coming years. In today's state budget the O'Farrell government raised the threshold at which businesses begin paying the tax from $689,000 to $750,000. The government also said it will stop indexing the threshold from July 1, which means more businesses will have to pay the tax in future years. The one-off increase to the tax threshold means about 1300 small businesses that would otherwise have had to pay the tax will be exempt, the government said. Sweden's Riksbank is among central banks snapping up Australia's government bonds as the nation's currency leads global declines, lifting demand at an auction to a four-month high. Buyers bid for 5.36 times the April 2015 securities offered on June 14, the strongest demand at auction since February 15, government data show. That compares with an average bid-to-cover ratio of 3.66 this year. The Australian currency dropped 8.6 per cent this quarter to 95.13, the biggest drop among 31 major peers. Sweden's central bank said June 4 it is adding Australian bonds to its reserves and Russia last month indicated it bought more than $5 billion of assets in the currency in 2012, drawn by the highest yields among nations with AAA grades from all three major rating companies. The purchases may be limiting declines in the Aussie as fund managers sell the nation's assets amid concern about a peak in mining investment and a slowdown in China, the country's largest trading partner. "Central banks and sovereign wealth funds tend to be sticky money," said Sally Auld, interest-rate strategist at JPMorgan. You would expect that the decline in the currency actually brings out good demand for Aussie bonds at some point and we have seen buying from central banks over the last couple of weeks. 12:33pm: China's new home prices rose in almost all cities in May, led by major centers, as the government's latest property measures failed to deter buyers. Prices climbed from a year earlier in 69 of the 70 cities tracked by the government, the National Bureau of Statistics said in a statement today. The southern business city of Guangzhou posted the biggest gain with prices rising 15 per cent from a year earlier. Beijing prices climbed 12 per cent, while they advanced 10 per cent in Shanghai. All three cities had their biggest advance since the government changed its methodology for the data in January 2011. The government in March stepped up a three-year campaign to cool home prices, with Beijing issuing the toughest measures among 35 provincial cities. The country will widen property tax trials, which have only been imposed in Shanghai and Chongqing, the State Council said in a statement posted on the central government's website on May 24. The only decline in new home prices last month was in the eastern city of Wenzhou, where they fell 3.6 per cent from a year earlier, according to the data. 12:30pm: ANZ foreign exchange strategist Andrew Salter said the immediate fall in the Australian dollar suggested another interest rate cut was more likely before the December quarter. ""While it may be in the fourth quarter, this statement suggests the risk is probably earlier,"" he said. ""Traditionally, the exchange rate has reflected lower interest rates. ""Because policy is being very closely tied, at the moment, to the exchange rate and its depreciation, we're getting an even closer correlation than normal."" 12:24pm: Tiger Resources says it expects to produce more than its targeted amount of copper in concentrate at its Kipoi Copper Project in the Democratic Republic of Congo (DRC) this year. The ASX-listed company said the Kipoi project was on track to exceed its production target of 37,000 tonnes of copper in concentrate, and was now expecting this year's total production to reach 43,000 tonnes from an earlier estimate of 41,000 tonnes. ""The Company's guidance for average operating cash costs for 2013 of $0.48 per pound of copper produced is maintained,"" Tiger Resources added in a statement. Shares are up 2.5 per cent to 20.5 cents. The DRC's plans to ban exports of copper and cobalt concentrate by July or August to try and force miners to built smelters and refineries within the African country has pushed down the share prices of DRC-focused copper producers such as Tiger Resources. 12:17pm: The RBA minutes show board members have been watching the moves of financial markets keenly, with most movements driven by the uncertainty surrounding the long-term effects of the Bank of Japan's and UD Fed's monetary policy. Despite a sharp fall in late May and early June, the Japanese market remained around 50 per cent higher than in November 2012 at the time the Japanese elections were announced. Equity markets elsewhere had generally showed small gains over the past month. However, the Australian equity market had declined, with share prices for some companies falling in response to profit warnings. Share prices of Australian banks had retraced the significant increases recorded earlier in the month, which had followed their positive earnings reports. Read the minutes 11:39am: The Reserve Bank of Australia may not have cut the cash rate at its June meeting but has indicated it is prepared to cut further even though the Australian dollar is falling. Between the May and June meetings, the Australian dollar fell seven per cent against a surging US dollar but the RBA considers it to still be too high. The high Australian dollar, which has been above 100 US cents for most of the past 12 months, has been a drag on much of the non-mining sectors of the Australian economy. ""The exchange rate had depreciated noticeably, though it remained at a high level considering the decline in export prices that had taken place over the past year and a half,"" the RBA minutes released today. ""It was possible that the exchange rate would depreciate further over time, as the terms of trade declined, which would help foster a rebalancing of growth in the economy."" 11:28am: UGL has secured $120 million in new contracts across its global property services business, DTZ. The wins include a three-year property management deal to advise Rolls-Royce, the world's second-largest maker of aircraft engines, on the management of its real estate across 20 countries in Europe, the Middle East and Africa. UGL has also locked in an extension to its global service contract with American chemicals giant DuPont, with DTZ to act as a transaction adviser on projects in Europe, the Middle East, Africa, the Americas and Asia Pacific regions. It has also won a five-year contract to deliver facilities management services to the Aspire Zone, located in Doha, Qatar. Occupying a 250-hectare site, the Aspire Zone project is one of the largest sporting complexes in the Middle East. It has also been appointed joint leasing agent by Charter Hall Office Trust to lease 1 Martin Place, Sydney, Australia. UGL shares are up 1.5 per cent to $6.69. 11:20am: Target has all but run up the white flag and offered to settle its long running court battle with US cosmetics giant Estee Lauder over its sale of allegedly counterfeit MAC make-up last year. In the Federal Court this morning Target made an offer to Make-Up Art Cosmetics, a subsidiary owned by Estee Lauder, to settle the case brought against it when it was discovered that Target was selling what was claimed to be fake MAC products. In courts issued in court, Target has offered to hand over all promotional, marketing and advertising material related to its sale of MAC still in its possession, including catalogues, brochures and signage. 10:55am: In a sign of just how jittery the markets are ahead of Wednesday's Fed meeting, a sudden 100-point slump in the Dow in late trade overnight has been pegged to an FT column by influential economics editor Robin Harding suggesting that Ben Bernanke is likely to signal the long-anticipated tapering of Fed stimulus. The market recovered somewhat after Harding tweeted that he was pleased his column was being read: Quickly adding: It's not the first time a Fed watcher has moved the markets in recent weeks. Harding's colleague over at the Wall Street Journal, Jon Hilsenrath, sparked a similar reaction mid-May when he mapped the Fed's exit from stimulus. Which is maybe why he was a bit more cautious in his most recent piece, saying the Fed was worried investors were getting ahead of themselves in their anticipation of tapering. Dow Jones Industrial reacts yesterday. 10:41am: China's plan to set up markets to trade emissions will make it second only to Europe in efforts to put a price on pumping carbon into the atmosphere. For cities choking on the nation's smog, expect little relief. Seven pilot carbon-trading programs are scheduled to start this year, with the first opening today in Shenzhen, followed by Beijing, Shanghai, Guangdong, Tianjin, Chongqing and Hubei. They are set to regulate 800 million to 1 billion tons of emissions by 2015 in the world's biggest cap-and-trade program after Europe's, according to Bloomberg New Energy Finance. China's National Development and Reform Commission will oversee emission exchanges in a country that the World Bank says has 16 of the world's most-polluted 20 cities. The commission is better known for setting prices than creating open markets, said Stuart Cerne, managing director at Hong Kong-based environmental business consultant Enecore Carbon.