US trade deficit widened in February to US$39.7bn (US$37.0bn in Jan) illustrating the rebound in economic growth. But the closely watched bilateral deficit with China was its lowest in nearly a year. Stronger demand boosted imports by 1.7% to US$182.9bn while exports edged only 0.2% higher to US$143.2bn. Economists had expected the trade deficit to widen in February to around US$38.5bn. (CNBC, Bloomberg)
US small business owners have little confidence in the economy and are in no rush to hire or expand, despite signs the recovery is picking up. The National Federation of Independent Business said its monthly index of small business optimism fell 1.2pts in March to 86.8 and below 90.0 for the 18th consecutive month. That showed little hope for a lower unemployment rate. Small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stock, the survey showed. (CNBC)
US Federal Reserve officials discuss raising for a second time the interest rate charged on emergency loans to banks, according to minutes from a mid-March meeting released on 13 Apr. Some directors wanted another hike in discount rate to 1.0% after the 25bp hike on 18 Feb. (CNBC)
US Treasury Secretary Timothy Geithner said it remains China's decision on whether it will move to a more flexible foreign exchange policy or not, but warned that the US will be aggressive in promoting a more level playing field. (Xinhua)
The International Monetary Fund (IMF) said regulators should consider imposing capital surcharges to discourage financial institutions from evolving in ways that threaten the stability of financial markets. Regulators may find it necessary to weigh “direct preemptive measures,” including constraining the size of certain activities to limit the emergence of “systemically important” firms, it said. (Bloomberg)
The UK trade deficit narrowed more than economists forecast in February as exports jumped the most in seven years on record sales of chemicals. The goods-trade gap was £6.2bn (£8.1bn in Jan), the least since Jun 06. Exports surged 9.5% while imports fell 0.1% in February. Economists forecast for a £7.4bn trade deficit in the month. (Bloomberg)
Bank of Japan (BoJ) Governor Masaaki Shirakawa said the central bank is seeing brighter sign for prices, an indication policy makers may raise their inflation forecasts this month. Improvements in consumer prices typically lag behind the narrowing of the demand gap by a year, he said. BoJ board members will update their forecasts for prices and gross domestic product in their semi-annual outlook report on 30 Apr. (Bloomberg)
China won’t raise benchmark interest rates in the near term. Consumer price gains may slow in April and in coming months, reducing the need for a rate increase, said Xu Lianzhong, an official at the National Development and Reform Commission’s price monitor center. He Keng, deputy director of the finance and economic affairs committee of the National People’s Congress, said rates won’t be raised soon because of uncertainties in China’s growth outlook. (Bloomberg)
President Hu Jintao told the US President Barack Obama that China wouldn’t yield to “external pressure” in deciding when to adjust the yuan. Any currency revaluation by China must be “based on its own economic and social-development needs,” Hu said. (Bloomberg)
Taiwan plans to cut its corporate tax rate for the second time this year as it seeks to lure international investors from regional rivals in Asia, Premier Wu Den-yih said. The government will reduce the rate to 17%, on a par with Singapore, after cutting it to 20% from 1 Jan this year, Wu noted. (Bloomberg)
Philippine’s export increased 42.3% yoy to US$3.57bn in February (42.5% in Jan), marking a 14-year high as the global economic recovery boosted demand for the nation’s electronics goods. That exceeds economists’ estimates for a 39.9% gain. (Bloomberg)
Global oil demand will hit a record high this year, the International Energy Agency (IEA) said. It revised up oil consumption estimate by 100,000 barrels per day (bpd) to 1.67m bpd for 2010 as the world economy recovers from recession. Output from non-OPEC was raised by 220,000 bpd to around 52.0m bpd for 2010 due to higher output by OECD countries. (Financial Daily)
The Organization of the Petroleum Exporting Countries (OPEC) would consider raising crude output if the oil price rose to around US$90-95 a barrel, delegates from the producer group said. It has kept the output policy stable for more than a year, but since mid-2009 many countries have been informally raising supply alongside a recovery in prices. (CNBC)
Singapore is looking to double its export of accountancy services to the region over the next 10 years from 22% now to 50%. The Committee to Develop the Accountancy Sector (CDAS) is also recommending that Singapore raises the sector's contribution to GDP from 0.4% to 1.0% within a decade. The committee has recommended that S$10m be set aside to develop the sector. The market for accounting services in Asia Pacific is estimated to be worth US$38.3bn by 2013. (Channel News Asia)
Asia and Pacific economies are recovering strongly from 2009’s slowdown and should coordinate on unwinding easy policy and freeing up exchange rates, the Asian Development Bank (ADB) said. Developing Asia was set to grow 7.5% in 2010 and 7.3% in 2011, picking up from 5.2% in 2009, it said. (Financial Daily)
The IMF’s board of directors approved a 10-fold increase in the size of a credit line designed to stem financial crises, adding contributors such as China to the US$550bn pool. “This will help ensure that the Fund has access to adequate resources to help members that are vulnerable to financial crises,” IMF Managing Director Dominique Strauss-Kahn said. (Bloomberg)
India’s central bank is likely to raise interest rates next week for the second time to control inflation, said R Gopalan, secretary for financial services in the Ministry of Finance. There is a fear that food inflation might transmit into general inflation, he added. (Malaysian Reserve)
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