Economy Highlights today (06th July, 2011)

US - Orders rose 0.8% in May on capital goods

Orders placed with US factories increased in May, indicating manufacturing may rebound from a slowdown in economic growth in the first half of 2011. Bookings for manufacturers’ goods rose 0.8%, less than forecast, after a revised 0.9% decline in April that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Demand for durable goods that are meant to last at least three years increased 2.1%, while unfilled orders climbed the most since September. Manufacturing is showing signs of recovering from parts shortages linked to the earthquake and tsunami in Japan, at the same time commodity costs ebb and growing economies overseas fuel exports. (Bloomberg)


Portugal - Ratings cut to junk by Moody's on financing risk

Portugal’s credit rating was cut to below investment grade by Moody’s Investors Service on concern the country will need to follow Greece in seeking a second bailout. The euro dropped for the first time in seven days. The long-term government bond ratings were lowered to Ba2, or junk, from Baa1, and the outlook is negative. Discussions to involve private investors in a new rescue plan for Greece make it more likely that the European Union will require the same pre-conditions in the case of Portugal, Moody’s said in a statement. (Bloomberg)


Greece - Banks ready to take part in rollover, Venizelos says

Greek banks are willing to roll over their government bonds as part of a European Union rescue plan that will keep the country out of financial markets for three years, Finance Minister Evangelos Venizelos said. “The Greek banks are ready to participate,” he said in an interview with Bloomberg Television in Athens. Greece will meet its goal of achieving a primary surplus next year and in following years, and is targeting EUR1.7bn in revenue from state-asset sales by the end of September, the minister said. He added that he will appoint a new head of the country’s privatization fund by 11 July. (Bloomberg)


Australia - Trade surplus in may widens to seven-month high

Australia’s trade surplus in May was the widest in seven months as the mining industry fueled a recovery from the economy’s worst quarterly contraction in two decades. Exports exceeded imports by AUD2.33bn (USD2.5bn), from a revised AUD1.62bn surplus in April, the Bureau of Statistics said in a report in Sydney. The median estimate in a Bloomberg News survey of 25 economists was for a surplus of AUD1.9bn. Reserve Bank of Australia Governor Glenn Stevens is forecast to hold interest rates at 4.75% for a seventh meeting to help the economy recover from natural disasters at home and abroad. (Bloomberg)


China - Services industries expand as new orders, jobs climb

China’s services industries expanded at the second-fastest pace this year as new orders and employment climbed, supporting growth amid the government’s campaign to cool inflation. A purchasing managers index was 54.1 in June compared with 54.3 in May, HSBC Holdings Plc and Market Economics said. A reading above 50 indicates expansion. “The continuous steady expansion of the service sector, in particular the notable improvement in employment, should lend support to economic growth,” HSBC’s chief China economist Qu Hongbin said in the statement. “This should provide room for Beijing to keep the current tightening measures for another two to three months to slow inflation meaningfully into the fourth quarter.”(Bloomberg)