Economy Highlights

US - 10-Year yields rise by most in 6 weeks on economic outlook

Treasuries fell, pushing up 10-year note yields the most in six weeks, as economic reports in the US and Europe bolstered speculation the global recovery is building momentum and damped government debt’s refuge appeal. Thirty-year bond yields rose to an eight-month high after European officials pledged to strengthen the safety net for debt-strapped countries and a record sale of US inflation- linked notes drew lower-than-average demand. The Treasury will sell USD99bn of notes next week as the Federal Reserve meets and President Barack Obama gives his State of the Union speech. (Bloomberg)


US - Economy speeds up on spending gain

The economy in US probably grew at a faster pace in the fourth quarter, driven by the biggest gain in consumer spending in four years; economists projected a report this week will show. GDP rose at a 3.5% annual pace, up from a 2.6% rate in the previous three months, according to the median estimate of 67 economists surveyed by Bloomberg News before a 28 Jan Commerce Department Report. Other data may show business investment remained a pillar of the economic rebound, while home prices decreased. (Star Biz)


China - Rural incomes surge in boost for consumption

China’s 10.3% economic growth last year drove the biggest increase in the nation’s rural incomes in a quarter century, bolstering efforts to spur consumption in the world’s most populous nation. In the countryside, per capita net income rose 10.9% to RMB 5,919 (USD898), a statistics bureau report showed. The gain was faster than for urban incomes for the first time since 1997. The report also showed acceleration in retail sales and industrial production at the end of last year. (Bloomberg)


Japan - Set to miss bond sale target, government says

Japanese Prime Minister Naoto Kan is projected to break his fiscal promise of capping bond sales as he struggles to secure revenue, boosting the case for higher taxes to contain the world’s largest public-debt burden. Japan’s new bond sales will expand to JPY 46.7trn (USD563bn) in the year starting April 2012, surpassing Kan’s target of JPY 44.3trn, according to calculations by the Cabinet Office. Breaking his year-old spending pledges may push up government borrowing costs of around 1.2%. (Bloomberg)