US new home construction skyrocketed 40.9% yoy or 5.8% mom to a seasonallyadjusted annual rate of 672,000 in April. Economists were expecting housing starts to jump to 655,000. Applications for building permits, a gauge of future construction activity, sank unexpectedly. Permits fell to a seasonally adjusted annual rate of 606,000 in April, down 11.5% mom from a revised 685,000 in March. Economists were expecting 680,000 permits. (CNNMoney)
US wholesale prices unexpectedly dropped 0.1% mom in April (+0.7% in Mar), the second decrease in three months, signaling the absence of inflation pressure. Excluding food and fuel, so-called core prices climbed 0.2% mom in April (+0.1% in Mar). Market had expected producer prices to rise 0.1% and core producer prices to rise by 0.1%. (Bloomberg)
The US Securities and Exchange Commission filed proposed rules under which exchanges would halt trading in individual stocks that swing more than 10%. The circuit breakers, proposed jointly with the Financial Industry Regulatory Authority, would be triggered in all markets by gains or declines over five minutes in Standard & Poor’s 500 Index companies, according to an e-mailed statement. During the pilot program that goes until Dec. 10, the agency will also examine risks to investors created by market orders, and consider steps to deter stub quotes. (Bloomberg)
Germany prohibited naked short- selling and speculating on European government bonds with credit-default swaps in an effort to calm the region’s financial markets, sparking anxiety among investors about increasing government regulation. The ban, which took effect at midnight and lasts until March 31, 2011, also applies to the shares of 10 banks and insurers, German financial regulator BaFin said late yesterday in an e-mailed statement. (Bloomberg)
German investor confidence fell in May after Europe’s debt crisis deepened, stoking concern about the euro’s future and rattling financial markets. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations dropped to 45.8 from 53 in April. Economists expected a slide to 47. (Bloomberg)
European finance ministers said Greece’s debt crisis won’t unleash a continent-wide austerity drive with the potential to tip the economy back into a recession and further undercut the euro. Only high-deficit countries including Spain and Portugal will be ordered to make additional deficit cuts, while budget policies will remain untouched in better-off nations such as Germany and Finland. (Bloomberg)
Japan’s consumer sentiment rose to 42 in April (40.9 in Mar), the highest level since October 2007 as the benefits of an export-fueled recovery continued to spread to households. This reading adds to signs that improvements in employment and paychecks are supporting households. (Bloomberg)
Thailand’s government said it is willing to reopen talks on holding an early election to help avoid bloodshed after six days of gun battles in Bangkok that have killed at least 36 people. “We are willing to renegotiate the election,” Korbsak Sabhavasu, the government’s chief negotiator and a former deputy prime minister said in a phone interview today. Thai protest leader Nattawut Saikuar said today his group is willing to accept an offer by the Senate to mediate. (Bloomberg)
Asian countries may benefit from capital controls to help limit inflows that pose a risk to their economies and financial systems, according to the Asian Development Bank. The bank’s Asia Capital Markets Monitor suggested “temporary and targeted” restraints on incoming investment in addition to encouraging outflows. ADB estimates that foreign funds hold about 20% of stocks by value in Asia’s emerging markets. They owned 22.3% of local-currency government bonds in Indonesia, 13.3% in Malaysia and 3.9% in Thailand as of March 31, the report said. (Bloomberg)
European inflation accelerated 1.5% yoy in April (1.4% in Mar), marking the 16-month high as the economy gathered strength. This came in line with the market consensus (1.5%). (Bloomberg)
Exports from the euro area rose a seasonally adjusted 7.5% mom in March, the biggest increase since January 08. Imports rose 10.3%, resulting in a narrow trade surplus of EUR600m in March (EUR3.4bn in Feb). (Bloomberg)
Thailand’s Tourism Minister Chumpol Silapa-Archa said tourist arrivals have slumped 50% after anti-government protests in Bangkok turned violent. Arrivals at Bangkok’s Suvarnabhumi airport have fallen to about 20,000 per day from 30,000 per day, he added. (Bloomberg)
Thailand's anti-government protests, which show no sign of ending, has caused the GDP to go down more than 0.5% so far this year, said Finance Ministry official Ekniti Nitithanprapas. The ministry expects this year's growth to be 4-5% but that forecast will be reviewed next month. Ekniti said when the protest started, it was expected it would only impact the tourism industry. However, he said the unrest is now affecting several sectors including investment by both Thais and foreigners. (Bloomberg)
The Bank of Thailand (BoT) maintained its 2010 economic growth forecast at between 4.3% and 5.8%, saying the deadly political unrest of the past few days is still within its worst-case scenario. “We may adjust the forecast in our next review, depending on the real economic figures,” said Assistant Governor Paiboon Kittisrikangwan. The Monetary Policy Committee will meet on 2 Jun to assess the economy before making a decision on interest rates. (Bloomberg)
Vietnam is targeting annual economic growth of 7.5-8.5% over the 2011-2015 period, according to a development strategy drafted by the Ministry of Planning and Investment. It aims to increase per capita income to about US$2,100 in 2015, a 70% gain from 2010. (Bloomberg)
Crude oil tumbled to a seven-month low in New York as the euro fell against the dollar on concern European nations will struggle to meet austerity requirements. Crude oil for June delivery fell 67 cents, or 1%, to US$69.41 a barrel, the lowest settlement since 29 Sept. The contract rose as much as 3.5% to US$72.52. (Bloomberg)
Bank of England Governor Mervyn King downplayed the threat of inflation after consumer prices jumped at the fastest annual pace since 2008, saying the surge is “temporary” and masks slack in the British economy. Inflation accelerated to 3.7% in April (3.4 in Mar). Economists had projected it would increase 3.5% in April. King expressed that there is “substantial” spare capacity in the economy, though policy makers are “very conscious” of price risks. (Bloomberg)
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