Economy Highlights

US - Sales of existing houses fall

Sales of previously owned US homes dropped more than forecast in February, sending prices to the lowest level since 2002 and indicating the market is struggling to recover. Purchases decreased 9.6% to a 4.88m annual rate, less than the 5.13m median forecast. The median price fell 5.2% y-o-y. Distressed properties accounted for 39% of sales, and the share of all cash transactions was 33%. Sales fell in all regions in February, led by a 12% drop in the Midwest and a 10% decrease in the South. The median price decreased to USD156,100 last month from USD164,600 in February 2010. The number of previously owned homes on the market rose 3.5% to 3.49m from January. (Bloomberg)


Japan - Quake rebuilding may take five years, according to World Bank

The World Bank says it may take five years for Japan to rebuild after this month’s 9.0-magnitude earthquake and tsunami, which killed at least 8,450 and destroyed thousands of buildings. Taking history as a guide, the World Bank says GDP growth will be negatively affected through mid-2011, after which growth should pick up in subsequent quarters as reconstruction efforts, which could last five years, accelerate. The World Bank cited private estimates for the damage wrought that range from USD122bn to USD235bn. (Bloomberg)


Indonesia - Central bank ?isn't worried' about March to May inflation

Indonesia’s central bank said it isn’t concerned about inflation in March, April and May as pressure on prices eases, signaling it has the scope to extend a pause in raising interest rates. The central bank “isn’t worried” and prices in March may fall because of the harvest season, without further elaboration. Consumer-price growth in February slowed to 6.84% compared with 7.02% in January, allowing Bank Indonesia to avoid raising rates this month even as neighbours from Thailand to India tightened policy to fight inflation. (Bloomberg)


Thailand - Economy has momentum, according to Prime Minister

Thailand’s economy shows ample signs of growth and has fiscal room to counter uncertainties, Prime Minister Abhisit Vejjajiva said following Japan’s earthquake and a rise in global oil prices. He said that export and revenue collection data from January and February suggest there is plenty of momentum for future growth, and that low public debt means the government has “flexibility” to adopt fiscal measures if uncertainties arise.Abhisit has pledged to increase the minimum wage by 25% over two years and intends to boost civil service pay. (Bloomberg)


US - Treasuries advance on Japan's radiation concern, Libyan turmoil

Treasuries gained, with the 10-year note yield touching the lowest level this year, as Japan’s nuclear crisis and Libyan political turmoil encouraged demand for the safety of U.S. government debt. Yields on two-year notes dropped for a fifth week in the longest stretch of decreases since August as a surge in the yen following Japan’s earthquake led Group of Seven nations to intervene in currency markets. The Federal Reserve said the US recovery is gaining strength before a report next week forecast to show the economy expanded faster than earlier estimated.(Bloomberg)