US - Pending sales of US existing homes increased 8.2% in May
The number of contracts to buy previously owned US homes rose almost three times as much as forecast as falling prices made properties more affordable. The surprising 8.2% increase in the index of pending home resales from April followed a revised 11% drop the prior month, the National Association of Realtors said yesterday in Washington. While the measure of contract signings has been volatile this year, last month’s index level is 0.1 point lower than the January figure, indicating residential real estate has made little headway. Foreclosures, unemployment at 9.1% and stringent loan terms are holding back demand even as a decline in home prices attracts some buyers. (Bloomberg)
UK - Mortgage approvals increased less than forecast in May
UK mortgage approvals rose less than economists forecast in May, underlining the fragility of the housing market as the economy struggles to gain momentum. Lenders granted 45,940 loans to buy homes, compared with 45,447 the previous month, the Bank of England said today in London. The figures reflect the weakness of consumer confidence as accelerating inflation reduces Britons’ spending power at the fastest pace since the 1970s and concerns about job security mount. Banks are also curbing lending as they rebuild their balance sheets. (Bloomberg)
EU - June economic confidence drops to lowest in 8 months
European confidence in the economic outlook dropped to the lowest in eight months in June as policy makers struggled to craft a second bailout package for Greece. An index of executive and consumer sentiment in the 17- nation euro region fell to 105.1 from 105.5 in May, the European Commission in Brussels said yesterday. That’s the lowest since October.(Bloomberg)
EU - Greek austerity plan approved by 155 votes to 138 votes
Greek Prime Minister George Papandreou won approval of his EUR78bn package of budget cuts and asset sales, key to receiving further international financial aid. A total of 155 lawmakers in the 300-strong chamber supported the law and 138 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV yesterday. (Bloomberg)
Japan - Factory output rises at the fastest pace since 1953
Japan’s industrial production rose at the fastest pace in more than 50 years, led by carmakers as they restored operations at plants after a record earthquake and tsunami on 11 March. Factory output increased 5.7% in May from April, the biggest gain since 1953, the Trade Ministry said in Tokyo yesterday. Output in the transportation industry advanced 36% from the previous month as automakers including Toyota Motor Corp. and Nissan Motor Co. restarted production lines. (Bloomberg)
Thursday, June 30, 2011
Wednesday, June 29, 2011
Economy Highlights
US - Consumer confidence falls to seven-month low
Consumer confidence dropped to a seven-month low in June as Americans grew concerned about the outlook for jobs and wages. The Conference Board’s sentiment index decreased to 58.5 from a revised 61.7 in May that was higher than previously estimated, figures from the New York-based private research group showed today. Home prices fell in the year ended in April by the most in 17 months, another report showed. Unemployment hovering around 9%, deterioration in the housing market and a drop in share prices may restrain Americans’ sentiment, raising the risk that the biggest part of the economy will stagnate. The Federal Reserve last week kept in place record monetary stimulus to help nurture the expansion through what it views is a “temporary” slowdown. (Bloomberg)
South Korea - Current-account surplus widens to 7-month high
South Korea’s current-account surplus widened to seven-month high in May as car and steelmakers boosted overseas shipments and dividend payments to foreign shareholders shrank. The surplus was USD2.26bn, compared with a revised USD1.28bn in April, the Bank of Korea said. The current account is the broadest measure of trade, tracking goods, services and investment income. South Korea’s exports have climbed at a double-digit pace since November 2009 and hit a record in April even as the won appreciated. A slowdown in US growth and the fallout from Europe’s sovereign debt crisis risk weighing on shipments. (Bloomberg)
Greece - Police fire tear gas as strike overshadows budget vote
Greek police fired tear gas to disperse protesters in the center of Athens as labor unions shut down government services before a vote on austerity measures that may determine if the nation can avoid a default. Lawmakers debated Prime Minister George Papandreou’s five-year plan of budget cuts and asset sales for a second day before a vote today at 2 pm Athens time. A crowd estimated by police to number 20,000 thronged outside Parliament in protests that descended into violence as riot police fired tear gas in battles with hooded youths who smashed windows at a McDonald’s Corp restaurant and set two vans on fire. The vote today will be Papandreou’s second survival test in a week and has to succeed for the cash-strapped nation to tap a fifth loan payment from last year’s EUR 110bn (USD157bn) rescue. Failure to pass the government’s EUR 78bn plan may lead to the euro area’s first sovereign default.
UK - Economy expanded 0.5% in first quarter, led by exports
Exports returned the British economy to growth in the first quarter as soaring food and energy costs eroded household incomes and curbed consumer spending. Gross domestic product rose 0.5% from the fourth quarter, the same as previously estimated, the Office for National Statistics said. The pace of growth from a year earlier was revised to 1.6% from 1.8%. Concern about economic growth is taking precedence over inflation as rising prices and government budget cuts put Britain on course for the biggest squeeze on living standards since the 1970s. The Bank of England kept its key interest rate at a record low this month and some officials said more bond purchases may be needed if weakness persists. (Bloomberg)
Japan - Considers JPY230bn plan for nuclear assistance
Japan’s government is considering about JPY 230bn (USD2.8bn) in outlays for aid to Tokyo Electric Power Co. and radiation monitoring in its planned extra budget, according to a draft outline prepared by the Finance Ministry. Prime Minister Naoto Kan’s government has yet to release details of the JPY 2trn supplementary budget, which will need parliamentary approval. Officials will apply JPY 1.8trn in tax revenue left over from the last fiscal year to help fund the package, according to the document, a copy of which was obtained by Bloomberg News. The spending would be aimed at a nuclear crisis that remains unresolved more than three months after Japan’s record earthquake and ensuing tsunami crippled Tokyo Electric’s Fukushima Dai-Ichi reactor north of Tokyo. (Bloomberg)
Consumer confidence dropped to a seven-month low in June as Americans grew concerned about the outlook for jobs and wages. The Conference Board’s sentiment index decreased to 58.5 from a revised 61.7 in May that was higher than previously estimated, figures from the New York-based private research group showed today. Home prices fell in the year ended in April by the most in 17 months, another report showed. Unemployment hovering around 9%, deterioration in the housing market and a drop in share prices may restrain Americans’ sentiment, raising the risk that the biggest part of the economy will stagnate. The Federal Reserve last week kept in place record monetary stimulus to help nurture the expansion through what it views is a “temporary” slowdown. (Bloomberg)
South Korea - Current-account surplus widens to 7-month high
South Korea’s current-account surplus widened to seven-month high in May as car and steelmakers boosted overseas shipments and dividend payments to foreign shareholders shrank. The surplus was USD2.26bn, compared with a revised USD1.28bn in April, the Bank of Korea said. The current account is the broadest measure of trade, tracking goods, services and investment income. South Korea’s exports have climbed at a double-digit pace since November 2009 and hit a record in April even as the won appreciated. A slowdown in US growth and the fallout from Europe’s sovereign debt crisis risk weighing on shipments. (Bloomberg)
Greece - Police fire tear gas as strike overshadows budget vote
Greek police fired tear gas to disperse protesters in the center of Athens as labor unions shut down government services before a vote on austerity measures that may determine if the nation can avoid a default. Lawmakers debated Prime Minister George Papandreou’s five-year plan of budget cuts and asset sales for a second day before a vote today at 2 pm Athens time. A crowd estimated by police to number 20,000 thronged outside Parliament in protests that descended into violence as riot police fired tear gas in battles with hooded youths who smashed windows at a McDonald’s Corp restaurant and set two vans on fire. The vote today will be Papandreou’s second survival test in a week and has to succeed for the cash-strapped nation to tap a fifth loan payment from last year’s EUR 110bn (USD157bn) rescue. Failure to pass the government’s EUR 78bn plan may lead to the euro area’s first sovereign default.
UK - Economy expanded 0.5% in first quarter, led by exports
Exports returned the British economy to growth in the first quarter as soaring food and energy costs eroded household incomes and curbed consumer spending. Gross domestic product rose 0.5% from the fourth quarter, the same as previously estimated, the Office for National Statistics said. The pace of growth from a year earlier was revised to 1.6% from 1.8%. Concern about economic growth is taking precedence over inflation as rising prices and government budget cuts put Britain on course for the biggest squeeze on living standards since the 1970s. The Bank of England kept its key interest rate at a record low this month and some officials said more bond purchases may be needed if weakness persists. (Bloomberg)
Japan - Considers JPY230bn plan for nuclear assistance
Japan’s government is considering about JPY 230bn (USD2.8bn) in outlays for aid to Tokyo Electric Power Co. and radiation monitoring in its planned extra budget, according to a draft outline prepared by the Finance Ministry. Prime Minister Naoto Kan’s government has yet to release details of the JPY 2trn supplementary budget, which will need parliamentary approval. Officials will apply JPY 1.8trn in tax revenue left over from the last fiscal year to help fund the package, according to the document, a copy of which was obtained by Bloomberg News. The spending would be aimed at a nuclear crisis that remains unresolved more than three months after Japan’s record earthquake and ensuing tsunami crippled Tokyo Electric’s Fukushima Dai-Ichi reactor north of Tokyo. (Bloomberg)
Tuesday, June 28, 2011
Economy Highlights
US - Obama targets USD72bn business tax break
Barack Obama’s proposal to end a business tax break worth USD72bn is among the tensions the president may confront as he meets today with Senate Minority Leader Mitch McConnell in an effort to revive bipartisan talks over reducing the debt. Ending the so-called last-in-first-out, or LIFO, provision, a method of accounting for inventory costs, was among options offered by White House officials for raising USD400bn in revenue over 10 years during seven weeks of negotiations led by Vice President Joe Biden, three persons familiar with the issue said on the condition of anonymity because they weren’t authorized to comment publicly. (Bloomberg)
US - Fed seen purchasing USD300bn in Treasuries after QE2
The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its USD2.86trn balance sheet to keep interest rates low. While the USD600bn purchase program, known as QE2, winds down, the Fed said 22 June that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as USD300bn of government debt over the next 12 months without adding money to the financial system. (Bloomberg)
US - Consumer spending in US unexpectedly stagnated in May as prices climbed
Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back. Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3% gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.1% gain. Prices excluding food and energy rose more than forecast. (Bloomberg)
US - Fed seen buying USD300bn in Treasuries in year after QE2
The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends last week, as the central bank uses its USD2.86 trillion balance sheet to keep interest rates low. While the USD600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as USD300 billion of government debt over the next 12 months without adding money to the financial system. (Bloomberg)
US - Spending, manufacturing probably slowed
Consumer spending probably climbed at the slowest pace in almost a year and manufacturing cooled as dimmer job prospects and elevated commodity costs weighed on the US expansion, economists said reports will show. Purchases rose 0.1% in May, the smallest gain since June 2010, according to the median estimate of 63 economists in a Bloomberg News survey. The disaster in Japan also held back American factories this month, a survey of purchasing managers may show. The highest gasoline prices since 2008 and unemployment hovering around 9% caused households to pare spending, which may temper demand at factories already contending with higher input expenses and supply chain disruptions. (Bloomberg)
Barack Obama’s proposal to end a business tax break worth USD72bn is among the tensions the president may confront as he meets today with Senate Minority Leader Mitch McConnell in an effort to revive bipartisan talks over reducing the debt. Ending the so-called last-in-first-out, or LIFO, provision, a method of accounting for inventory costs, was among options offered by White House officials for raising USD400bn in revenue over 10 years during seven weeks of negotiations led by Vice President Joe Biden, three persons familiar with the issue said on the condition of anonymity because they weren’t authorized to comment publicly. (Bloomberg)
US - Fed seen purchasing USD300bn in Treasuries after QE2
The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its USD2.86trn balance sheet to keep interest rates low. While the USD600bn purchase program, known as QE2, winds down, the Fed said 22 June that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as USD300bn of government debt over the next 12 months without adding money to the financial system. (Bloomberg)
US - Consumer spending in US unexpectedly stagnated in May as prices climbed
Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back. Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3% gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.1% gain. Prices excluding food and energy rose more than forecast. (Bloomberg)
US - Fed seen buying USD300bn in Treasuries in year after QE2
The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends last week, as the central bank uses its USD2.86 trillion balance sheet to keep interest rates low. While the USD600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as USD300 billion of government debt over the next 12 months without adding money to the financial system. (Bloomberg)
US - Spending, manufacturing probably slowed
Consumer spending probably climbed at the slowest pace in almost a year and manufacturing cooled as dimmer job prospects and elevated commodity costs weighed on the US expansion, economists said reports will show. Purchases rose 0.1% in May, the smallest gain since June 2010, according to the median estimate of 63 economists in a Bloomberg News survey. The disaster in Japan also held back American factories this month, a survey of purchasing managers may show. The highest gasoline prices since 2008 and unemployment hovering around 9% caused households to pare spending, which may temper demand at factories already contending with higher input expenses and supply chain disruptions. (Bloomberg)
Thursday, June 23, 2011
Economy Highlights (23-06-2011)
US - Fed to maintain record stimulus after ending bond purchases
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing USD600bn of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said yesterday. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower. (Bloomberg)
US - Bernanke sees small impact on US banks of a Greek default
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on US banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments. “We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if Greece defaulted,” Bernanke said to reporters yesterday. “The answer is that the effects are very small.” Bernanke and Fed Governor Daniel Tarullo have led sweeping changes in the central bank’s approach to supervision, establishing the Large Institution Supervision Coordinating Committee. Bernanke said the Fed has also kept “a close eye” on money-market mutual funds, which hold dollar liabilities issued by European banks to fund their holdings of dollar assets. (Bloomberg)
EU - Greece vote turns spotlight back on German-ECB 'Cage Match'
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a EUR12bn (USD17bn) loan payment, which hinges on support from European leaders and on Greece’s ability to push through UER78bn in additional budget cuts next week. The Frankfurt-based central bank and German Chancellor Angela Merkel’s government have clashed over the role of private creditors in the Greek rescue, with the ECB resisting Germany’s calls to require investor participation. (Bloomberg)
China - Housing boom spreads to smaller cities, posing dilemma
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Efforts to rein in property prices have been focused on the nation’s largest urban areas, leaving less affluent cities such as Urumqi in the northwest and northeastern Dandong with surging home values as developers increased building there. That raises challenges for a government that last week escalated its fight against inflation by raising bank reserve requirements for the ninth time since October. (Bloomberg)
US - Existing-home sales fell in May to six-month low
Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing USD600bn of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said yesterday. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower. (Bloomberg)
US - Bernanke sees small impact on US banks of a Greek default
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on US banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments. “We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if Greece defaulted,” Bernanke said to reporters yesterday. “The answer is that the effects are very small.” Bernanke and Fed Governor Daniel Tarullo have led sweeping changes in the central bank’s approach to supervision, establishing the Large Institution Supervision Coordinating Committee. Bernanke said the Fed has also kept “a close eye” on money-market mutual funds, which hold dollar liabilities issued by European banks to fund their holdings of dollar assets. (Bloomberg)
EU - Greece vote turns spotlight back on German-ECB 'Cage Match'
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a EUR12bn (USD17bn) loan payment, which hinges on support from European leaders and on Greece’s ability to push through UER78bn in additional budget cuts next week. The Frankfurt-based central bank and German Chancellor Angela Merkel’s government have clashed over the role of private creditors in the Greek rescue, with the ECB resisting Germany’s calls to require investor participation. (Bloomberg)
China - Housing boom spreads to smaller cities, posing dilemma
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Efforts to rein in property prices have been focused on the nation’s largest urban areas, leaving less affluent cities such as Urumqi in the northwest and northeastern Dandong with surging home values as developers increased building there. That raises challenges for a government that last week escalated its fight against inflation by raising bank reserve requirements for the ninth time since October. (Bloomberg)
US - Existing-home sales fell in May to six-month low
Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)
Wednesday, June 22, 2011
Economy Highlights
US - Existing-home sales fell in May to six-month low
Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)
Greece - Papandreou wins Greek confidence vote, boosts rescue chances
Greek Prime Minister George Papandreou won a vote of confidence, bolstering his new government’s chances of pushing through austerity measures to secure further international financial aid for the country. A total of 155 lawmakers supported the motion in the 300-seat parliament in Athens early this morning, with 143 voting against, the speaker, Filippos Petsalnikos, said. Papandreou reshuffled his Cabinet and sought the approval of the chamber after fending off a revolt within his socialist Pasok party last week. After the vote, police used tear gas to disperse crowds protesting Papandreou’s budget cuts. (Bloomberg)
Malaysia - Minimum wage bill tabled
A bill that will pave the way for the implementation of minimum wages was tabled at the Dewan Rakyat for the first and second reading yesterday. The National Wages Consultative Council Bill 2011, tabled by Deputy Human Resources Minister Datuk Maznah Mazlan, seeks to replace the Wages Council Act 1947 and set up a National Wages Consultative Council to conduct studies on minimum wage. The council will also make recommendations to the government on minimum wages according to sectors, types of employment and regions. Prime Minister Datuk Seri Najib Razak said he hoped to have the minimum wage policy in place by year-end if Parliament passed the bill. Once the bill is passed, the council can make recommendations through the minister on coverage, commencement and implementation of recommended minimum wage rates. (NST)
Malaysia - Car sales impacted by amended Act
Worried about the possibility of trickling cash flow, a rise in booking cancellations and longer lead time for completion of sales, many stakeholders in the automotive sector say the recent amendments to the Hire-Purchase Act 1967 (HPA) will hurt the car retail trade. Already, there are complaints of a slowdown in sales. Under the amendments, effective 15 June, all used vehicles for sale will undergo Puspakom’s 18-point inspection to ensure their roadworthiness. Another issue of contention was the 1% maximum booking fee (based on the total selling price) mandated by the amended Act, which requires car sellers to refund customers 90% of the booking fee if the deal falls through. (StarBiz)
IMF - Lipsky says IMF not negotiating new Greek bailout program
The International Monetary Fund isn’t negotiating a second rescue package for Greece while it weighs whether to approve the next payment of the country’s initial program, acting IMF head John Lipsky said. “We are not negotiating a new program,” Lipsky said. “There always exists that possibility, but there has been no request by the Greek authorities to negotiate such a new program. We are concentrated today on the existing program and what is needed to put it back on track and to therefore allow the next disbursement.” Greece was due to receive the fifth payment of its original EUR 110 bn (USD157.5bn) rescue this month. Under the original bailout, Greece was due to return to markets and sell about EUR 30 bn in bonds next year. The country remains shut out of markets and the IMF has called on the EU to come up with a plan to close that funding gap before it will release its funds. (Bloomberg)
Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)
Greece - Papandreou wins Greek confidence vote, boosts rescue chances
Greek Prime Minister George Papandreou won a vote of confidence, bolstering his new government’s chances of pushing through austerity measures to secure further international financial aid for the country. A total of 155 lawmakers supported the motion in the 300-seat parliament in Athens early this morning, with 143 voting against, the speaker, Filippos Petsalnikos, said. Papandreou reshuffled his Cabinet and sought the approval of the chamber after fending off a revolt within his socialist Pasok party last week. After the vote, police used tear gas to disperse crowds protesting Papandreou’s budget cuts. (Bloomberg)
Malaysia - Minimum wage bill tabled
A bill that will pave the way for the implementation of minimum wages was tabled at the Dewan Rakyat for the first and second reading yesterday. The National Wages Consultative Council Bill 2011, tabled by Deputy Human Resources Minister Datuk Maznah Mazlan, seeks to replace the Wages Council Act 1947 and set up a National Wages Consultative Council to conduct studies on minimum wage. The council will also make recommendations to the government on minimum wages according to sectors, types of employment and regions. Prime Minister Datuk Seri Najib Razak said he hoped to have the minimum wage policy in place by year-end if Parliament passed the bill. Once the bill is passed, the council can make recommendations through the minister on coverage, commencement and implementation of recommended minimum wage rates. (NST)
Malaysia - Car sales impacted by amended Act
Worried about the possibility of trickling cash flow, a rise in booking cancellations and longer lead time for completion of sales, many stakeholders in the automotive sector say the recent amendments to the Hire-Purchase Act 1967 (HPA) will hurt the car retail trade. Already, there are complaints of a slowdown in sales. Under the amendments, effective 15 June, all used vehicles for sale will undergo Puspakom’s 18-point inspection to ensure their roadworthiness. Another issue of contention was the 1% maximum booking fee (based on the total selling price) mandated by the amended Act, which requires car sellers to refund customers 90% of the booking fee if the deal falls through. (StarBiz)
IMF - Lipsky says IMF not negotiating new Greek bailout program
The International Monetary Fund isn’t negotiating a second rescue package for Greece while it weighs whether to approve the next payment of the country’s initial program, acting IMF head John Lipsky said. “We are not negotiating a new program,” Lipsky said. “There always exists that possibility, but there has been no request by the Greek authorities to negotiate such a new program. We are concentrated today on the existing program and what is needed to put it back on track and to therefore allow the next disbursement.” Greece was due to receive the fifth payment of its original EUR 110 bn (USD157.5bn) rescue this month. Under the original bailout, Greece was due to return to markets and sell about EUR 30 bn in bonds next year. The country remains shut out of markets and the IMF has called on the EU to come up with a plan to close that funding gap before it will release its funds. (Bloomberg)
Monday, June 20, 2011
Economy Highlights
US - Leading indicators rise in sign of growth rebound
The index of US leading indicators rose more than forecast in May after declining for the first time in almost a year, a sign economic growth may pick up by the end of 2011. The Conference Board’s gauge of the outlook for the next three to six months rose 0.8% after a revised 0.4% drop in April, the New York-based research group said. Another report showed consumer sentiment dropped more than forecast in June. (Bloomberg)
UK - Facing larger deficit because of weak economy
The Office for Budget Responsibility, Britain’s independent fiscal watchdog, said in March the government’s fiscal shortfall will be GBP368bn (USD596bn) between 2011 and 2016, GBP46bn more than Osborne predicted in October, as it lowered its 2011 growth estimate. The economy stagnated in the six months through March, while consumer spending slumped the most in almost two years in the first quarter. Surveys of manufacturing and services growth published earlier this month by Markit Economics Ltd. indicate economic growth this quarter may not exceed 0.3%. (Bloomberg)
Japan - Yen heading to new high on no intervention as fed rates on hold
As the Yen rallies to levels that prompted the Group of Seven to weaken the currency in March, traders are forecasting more gains, even as Japan falls into its third recession in a decade. Three months ago, the Yen soared as much as 8.5% in less than a week on speculation insurance companies would repatriate assets to pay for damages from the record earthquake and tsunami in northeastern Japan that triggered the worst nuclear disaster in 25 years. Now, politicians and central bankers are focused more on the slowdown in US growth, Europe’s sovereign-debt crisis and uprisings in the Middle East. (Bloomberg)
India - Signals slower pace of rate increases on global risks
India’s central bank signaled it may slow the most aggressive monetary tightening among Asia’s major economies as risks to global growth threaten to undermine consumer demand. Asian nations such as China and the Philippines refrained from boosting interest rates this week, pausing to gauge the strength of the global economy. The Reserve Bank of India said lead indicators suggest growth moderated in advanced and emerging countries, and uncertainty about the resolution of Europe’s sovereign debt crisis has “increased.” (Bloomberg)
China - Existing home market cools in May amid government curbs
China’s effort to cool home prices is damping the market for existing homes, with prices in May falling from the previous month in 23 of 70 cities measured. That’s more than the 16 cities that posted declines in April, data from the National Bureau of Statistics posted to its website June 18 showed. Existing home prices in Beijing fell 0.2% from April while those in Shanghai increased 0.2%. The price of new homes, typically sold by developers, rose last month in 67 of the 70 cities monitored. (Bloomberg)
The index of US leading indicators rose more than forecast in May after declining for the first time in almost a year, a sign economic growth may pick up by the end of 2011. The Conference Board’s gauge of the outlook for the next three to six months rose 0.8% after a revised 0.4% drop in April, the New York-based research group said. Another report showed consumer sentiment dropped more than forecast in June. (Bloomberg)
UK - Facing larger deficit because of weak economy
The Office for Budget Responsibility, Britain’s independent fiscal watchdog, said in March the government’s fiscal shortfall will be GBP368bn (USD596bn) between 2011 and 2016, GBP46bn more than Osborne predicted in October, as it lowered its 2011 growth estimate. The economy stagnated in the six months through March, while consumer spending slumped the most in almost two years in the first quarter. Surveys of manufacturing and services growth published earlier this month by Markit Economics Ltd. indicate economic growth this quarter may not exceed 0.3%. (Bloomberg)
Japan - Yen heading to new high on no intervention as fed rates on hold
As the Yen rallies to levels that prompted the Group of Seven to weaken the currency in March, traders are forecasting more gains, even as Japan falls into its third recession in a decade. Three months ago, the Yen soared as much as 8.5% in less than a week on speculation insurance companies would repatriate assets to pay for damages from the record earthquake and tsunami in northeastern Japan that triggered the worst nuclear disaster in 25 years. Now, politicians and central bankers are focused more on the slowdown in US growth, Europe’s sovereign-debt crisis and uprisings in the Middle East. (Bloomberg)
India - Signals slower pace of rate increases on global risks
India’s central bank signaled it may slow the most aggressive monetary tightening among Asia’s major economies as risks to global growth threaten to undermine consumer demand. Asian nations such as China and the Philippines refrained from boosting interest rates this week, pausing to gauge the strength of the global economy. The Reserve Bank of India said lead indicators suggest growth moderated in advanced and emerging countries, and uncertainty about the resolution of Europe’s sovereign debt crisis has “increased.” (Bloomberg)
China - Existing home market cools in May amid government curbs
China’s effort to cool home prices is damping the market for existing homes, with prices in May falling from the previous month in 23 of 70 cities measured. That’s more than the 16 cities that posted declines in April, data from the National Bureau of Statistics posted to its website June 18 showed. Existing home prices in Beijing fell 0.2% from April while those in Shanghai increased 0.2%. The price of new homes, typically sold by developers, rose last month in 67 of the 70 cities monitored. (Bloomberg)
Friday, June 17, 2011
Economy Highlights
US - Confidence eroding among factories, consumers
Manufacturing in the Philadelphia region unexpectedly contracted in June and Americans’ views on the economy’s outlook soured, signaling an erosion of confidence in the expansion. The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. (Bloomberg)
US - Housing starts increased more than forecast in May
Housing starts in the US increased more than forecast in May, led by a jump in the West as other parts of the country languished. Work began on 560,000 houses at an annual pace, up 3.5% from the prior month. Building permits, a sign of future construction, also increased. (Bloomberg)
UK - Retail sales drop more than forecast on fuel, job fears
UK retail sales dropped more than economists forecast in May as higher fuel costs and concern about employment prospects restrained consumer spending. Sales fell 1.4% from April, when they rose 1.1%, boosted by warm weather and an extra public holiday. (Bloomberg)
India - Raises rates for 10th time since 2010 to tame prices
India’s central bank raised interest rates for the 10th time since the start of 2010, extending the longest streak of monetary tightening in a decade after inflation accelerated. The Reserve Bank of India increased the repurchase rate to 7.5% from 7.25%. (Bloomberg)
Asia - Housing boom stalls as tightening puts brakes on prices
From Mumbai to Melbourne, Asia’s property boom is stalling as the world’s highest interest rates and government efforts to curb prices take hold. In China’s biggest cities, growth slowed in April after the government stepped up property measures. In India and Australia, prices are falling after the steepest interest rate increases. In the financial hubs of Hong Kong and Singapore, price growth is moderating after increased deposit requirements and land releases. (Financial Daily)
Manufacturing in the Philadelphia region unexpectedly contracted in June and Americans’ views on the economy’s outlook soured, signaling an erosion of confidence in the expansion. The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. (Bloomberg)
US - Housing starts increased more than forecast in May
Housing starts in the US increased more than forecast in May, led by a jump in the West as other parts of the country languished. Work began on 560,000 houses at an annual pace, up 3.5% from the prior month. Building permits, a sign of future construction, also increased. (Bloomberg)
UK - Retail sales drop more than forecast on fuel, job fears
UK retail sales dropped more than economists forecast in May as higher fuel costs and concern about employment prospects restrained consumer spending. Sales fell 1.4% from April, when they rose 1.1%, boosted by warm weather and an extra public holiday. (Bloomberg)
India - Raises rates for 10th time since 2010 to tame prices
India’s central bank raised interest rates for the 10th time since the start of 2010, extending the longest streak of monetary tightening in a decade after inflation accelerated. The Reserve Bank of India increased the repurchase rate to 7.5% from 7.25%. (Bloomberg)
Asia - Housing boom stalls as tightening puts brakes on prices
From Mumbai to Melbourne, Asia’s property boom is stalling as the world’s highest interest rates and government efforts to curb prices take hold. In China’s biggest cities, growth slowed in April after the government stepped up property measures. In India and Australia, prices are falling after the steepest interest rate increases. In the financial hubs of Hong Kong and Singapore, price growth is moderating after increased deposit requirements and land releases. (Financial Daily)
Monday, June 6, 2011
Economy Highlights
US - Trade gap probably widened in April
The US trade deficit probably widened in April to a 10-month high, reflecting higher crude oil costs that have since retreated, economists said before a report this week. The gap expanded to USD48.9bn from the USD48.2 bn shortfall in March, according to the median of 61 estimates in a survey ahead of the Commerce Department’s 9 June report. Other figures may show prices of goods from abroad decreased in May by the most in almost a year, showing the surge in commodity costs is fading. (Bloomberg)
EU - Preparing new Greek rescue after aid payout approved
European Union officials will focus on preparing a new aid package for Greece that includes a “voluntary” role for investors after the EU and the International Monetary Fund approved the fifth installment of Greece’s EUR110bn (USD161bn) bailout. (Bloomberg)
Egypt - IMF agrees to USD3bn Egypt lpan for Post-Mubarak transition
Egypt and a visiting International Monetary Fund mission agreed to a USD3bn loan as the North African country seeks to fund its widening budget deficit after a popular revolt earlier this year. The 12-month loan is part of wider international support pledges for Egypt, where the turmoil that accompanied the uprising that led to the ouster of President Hosni Mubarak has hurt revenue from tourism and industrial output. (Bloomberg)
Australia - La Nina - triggered flood bill to total AUD12bn
Australia ’ s bill from floods that devastated the nation’s northeast earlier this year climbed 33% to AUD12bn (USD13bn), with resources and agriculture the hardest hit, the government said. “Lost commodity production is likely to be around AUD9bn and damage to crops more than AUD2bn,” Treasurer Wayne Swan said. “ We’ve seen economic data that clearly reflects the destruction. ” (Bloomberg)
Portugal - Social Democrats win vote, oust socialist Socrates
Portugal ’ s opposition Social Democrats ousted the ruling Socialists in elections, putting Pedro Passos Coelho in charge of enforcing austerity measures mandated by a EUR78bn (USD114bn) bailout. Coelho, who unseated Prime Minister Jose Socrates, said he would seek to forge a governing majority with the third - place People ’ s Party to enact budget cuts that risk worsening an economic slump and 12.4% unemployment rate. With 99% of districts reporting, the two parties won a combined 129 seats in the 230 - member parliament. (Bloomberg)
The US trade deficit probably widened in April to a 10-month high, reflecting higher crude oil costs that have since retreated, economists said before a report this week. The gap expanded to USD48.9bn from the USD48.2 bn shortfall in March, according to the median of 61 estimates in a survey ahead of the Commerce Department’s 9 June report. Other figures may show prices of goods from abroad decreased in May by the most in almost a year, showing the surge in commodity costs is fading. (Bloomberg)
EU - Preparing new Greek rescue after aid payout approved
European Union officials will focus on preparing a new aid package for Greece that includes a “voluntary” role for investors after the EU and the International Monetary Fund approved the fifth installment of Greece’s EUR110bn (USD161bn) bailout. (Bloomberg)
Egypt - IMF agrees to USD3bn Egypt lpan for Post-Mubarak transition
Egypt and a visiting International Monetary Fund mission agreed to a USD3bn loan as the North African country seeks to fund its widening budget deficit after a popular revolt earlier this year. The 12-month loan is part of wider international support pledges for Egypt, where the turmoil that accompanied the uprising that led to the ouster of President Hosni Mubarak has hurt revenue from tourism and industrial output. (Bloomberg)
Australia - La Nina - triggered flood bill to total AUD12bn
Australia ’ s bill from floods that devastated the nation’s northeast earlier this year climbed 33% to AUD12bn (USD13bn), with resources and agriculture the hardest hit, the government said. “Lost commodity production is likely to be around AUD9bn and damage to crops more than AUD2bn,” Treasurer Wayne Swan said. “ We’ve seen economic data that clearly reflects the destruction. ” (Bloomberg)
Portugal - Social Democrats win vote, oust socialist Socrates
Portugal ’ s opposition Social Democrats ousted the ruling Socialists in elections, putting Pedro Passos Coelho in charge of enforcing austerity measures mandated by a EUR78bn (USD114bn) bailout. Coelho, who unseated Prime Minister Jose Socrates, said he would seek to forge a governing majority with the third - place People ’ s Party to enact budget cuts that risk worsening an economic slump and 12.4% unemployment rate. With 99% of districts reporting, the two parties won a combined 129 seats in the 230 - member parliament. (Bloomberg)
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