Monday, April 26, 2010

20100426 0948 Global Economic News.

US new home sales improved in March at the fastest single-month rate in 47 years. Newhome sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February. The gain snapped a four-month streak of declines. This was well ahead of consensus forecasts for March sales to rise to an annual rate of 330,000. (CNN Money)

The cost of the US government's controversial bailout of the financial system could amount to less than a third of what the Obama administration originally expected, Treasury Secretary Timothy Geithner said. "A year ago we estimated that our support for the financial system could cost more than US$500bn or 3.5% of GDP," Geithner wrote. "We now expect that the direct costs of all our interventions will cost less than 1% of GDP." Citing the White House's Fiscal 2011 budget, Geithner estimated losses from the Troubled Asset Relief Program (TARP) at US$117bn. The Congressional Budget Office in March estimated the loss from TARP would be US$109bn. (CNN Money)

The World Bank forecast global economic growth of 3.1% this year, more than the 2.7% it forecast in January, and cautioned that not all risks to the recovery have subsided. For 2011, it predicts the global economy to grow 3.3%, could be “as low as 2.5% or as high as 3.5%.” (Bloomberg)

European industrial orders rose 1.5% mom in February (-1.6% in Jan), led by demand for intermediate goods such as car engines. Economists forecast an increase of 1.0% mom. From a year earlier, February industrial orders jumped 12.2% (7.5% in Jan). (Bloomberg)

The UK gross domestic product rose 0.2% qoq in 1Q (0.4% in 4Q09). Economists had projected for a 0.4% increase. Prime Minister Gordon Brown said that the economy still needs stimulus to avoid a “double-dip recession” and that Conservative leader David Cameron’s plans to cut spending this year are a “risk” to growth. (Bloomberg)

China’s industrial production is outpacing the trend rate by the most since 1998, adding to concern the world’s third-largest economy may be overheating. The industrial output gap, which gauges actual production against so-called potential, widened to 3.06% in March. (Bloomberg)

China’s central bank governor, Zhou Xiaochuan
, said the country will keep its “proactive” fiscal measures and maintain its “relatively easy” monetary policy as the global economic recovery remains tentative. China will continue with “stable and relatively rapid” growth this year, while balancing “inflation expectations,” Zhou said. The primary risks to the global economy come from developed countries and he urged developed nations to “restore fiscal discipline as quickly as possible” to contain “sovereign risks” and avoid “contagion”. (Malaysian Reserve)

Singapore’s consumer prices rose 1.6% yoy in March (1.0% in Feb), marking the highest level in 12 months amid an economic rebound that has led policy makers to allow the island’s currency to strengthen. On a m-o-m basis, prices rose 0.1% (0.4% in Feb), without adjusting for seasonal factors. Economists had projected the inflation would increase 1.8% yoy and 0.2% mom for March. (Bloomberg)

Thailand’s foreign-exchange reserves rose 1.0% to US$146.2bn billion in the week ended 16 Apr, from US$144.8bn a week earlier. The central bank’s holdings of forward contracts fell 7.4% to US$12.6bn from US$13.6bn a week earlier. (Bloomberg)

Vietnam’s consumer prices climbed 9.2% yoy in April, down from 9.5% in March, as food prices eased and higher interest rates cut into borrowing. Prices rose 0.1% mom, the lowest figure since a decline in monthly inflation in Mar 09. (Bloomberg)

China tightened real-estate financing by requiring developers to submit fund-raising plans for review, stepping up efforts to prevent a property bubble, as the central bank pledged to maintain “proactive” fiscal measures. The China Securities Regulatory Commission has sent financing requests from 41 companies to the Ministry of Land and Resources for reviews of land use compliance. (Bloomberg)

Greece moved toward securing an emergency aid package before debt payments come due in mid-May as Finance Minister George Papaconstantinou warned investors they will “lose their shirts” if they bet the cash-strapped nation will default. Papaconstantinou said money will be available “rather soon” and his country wouldn’t restructure its debt. IMF Managing Director Dominique Strauss-Kahn said talks will end “in time to meet Greece’s needs.” (Bloomberg)

Greece on Friday called for activation of a financial life-line of as much as €45bn this year. The request came a day after the yield on the country’s benchmark 2-year note topped 11%, and Moody’s Investor’s Service lowered Greece’s creditworthiness by one notch to A3. (Malaysia Reserve)

Protesters in Thailand readied themselves for a military offensive on the Bangkok business district they have shut down for 23 days after Prime Minister Abhisit Vejjajiva called off peace talks and pledged to disperse them. “We aim to return the site to the public,” Abhisit said in a nationally televised address yesterday with army chief Anupong Paojinda at his side. “We shouldn’t set the precedent that threatening and using force will lead to political gains.” (Bloomberg)

World Bank member countries reached a preliminary agreement on a 3.13% shift in voting power to give emerging and developing nations greater influence in the global institution. This would increase the votes of the developing world to 47.19%. (Financial Daily)

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