U.S: Fed's balance sheet at record. The Federal Reserve's total assets rose by to USD2.44 trillion, the fourth record in five weeks, as the central bank bought USD185.6b of US Treasuries between 12 Nov 2010 and 5 Jan 2011 under QE2. (Source: Bloomberg)
Germany: Factory orders in November surge on demand from abroad. Orders, adjusted for seasonal swings and inflation surged 5.2% MoM from October, when they gained 1.6% MoM. From a year earlier, orders climbed 20.6% YoY when adjusted for working days. (Source: Bloomberg)
U.K: Service industries unexpectedly contract in December on winter weather. The gauge fell to 49.7 from 53 in November, the first reading since April 2009 to show the industries shrank, Markit Economics Ltd. and the Chartered Institute of Purchasing and Supply said. Readings above 50 indicate growth. (Source: Bloomberg)
China: Tackling capital flows on of policy agenda in 2011. State Administration on Foreign Exchange (SAFE) said it will "crack down" on hot money and step up monitoring of cross border capital flows this year. (Source: Bloomberg)
Brazil: Sets reserve requirement to stem Real rally. Brazil's central bank set reserve requirements on short dollar positions held by local banks in its third attempt since October to stem a rally in the currency. Starting 4 Apr, banks must deposit 60% of their USD short positions in cash at the central bank after deducting USD3b pr their capital base, whichever is smaller. The new rules have the potential to reduce short positions in the dollar to USD10b from USD16.8b in Dec 2010 as banks seek to avoid paying reserve requirements on currency operations, Aldo Mendes, the central bank's director of monetary policy told reporters in Brasilia. (Source: Bloomberg)
HK: Lawmakers set the city's first statutory minimum wage at HKD28 (USD3.60) per hour as a report showed the wealth of the city's top 40 billionaires jumped 21%. The 40 richest people have USD163b, up from USD135b in 2010, after China's growth bolstered their investments, according to Forbes Magazine. Legislators ratified the government's plan to increase salaries for about 314,600 workers by an average of 17%. (Source: Bloomberg)
Philippines: Moody's raises rating outlook to positive from stable two months after Standard & Poor's lifted its rating on the country's debt. The change in outlook means Moody's is more likely to raise the debt rating. The nation's improved external-payments position has reduced its vulnerability to shocks, the company said in a statement. The rating was kept at Ba3, three levels below investment grade. (Source: Bloomberg)
Australia: Home-building approvals fell in November for the third time in four months, adding to the case for the central bank to keep interest rates unchanged. The number of permits granted to build or renovate houses and apartments dropped 4.2% MoM from October, when they rose a revised 8.3% MoM, the Bureau of Statistics said in Sydney. (Source: Bloomberg)
China: May report USD20.8bn trade gap before Hu, Obama meet
China may report a USD20.8bn trade surplus for December, adding to pressure for Yuan gains nine days before Presidents Hu Jintao and Barack Obama meet to discuss issues including global economic imbalances. The surplus will exceed USD20bn for the sixth time in seven months, taking the full-year total to USD191bn, according to the median estimate in a survey. The customs bureau will release the data 10 Jan 2011. (Bloomberg)
Australia: Floods likely to slow economy, extend RBA rate pause
Northeastern Australia’s worst floods in half a century are likely to slow the nation’s economy and prompt the central bank to refrain from raising interest rates as inundated coal mines reduce export income. Disruption to mining and damage to crops in Queensland will damp national growth by 0.2-percentage point this quarter, according to the median of eight estimates in a Bloomberg survey. The Reserve Bank of Australia, which meets 1 Feb 2011, may discuss what could prove to be a “significant impact” on the economy, board member Donald McGauchie said. (Bloomberg)
Europe: Economic confidence gains more than forecast
European confidence in the economic outlook improved more than economists forecast in December, led by increasing optimism among German manufacturers. An index of executive and consumer sentiment in the Euro region jumped to 106.2 from 105.1 in November, the European Commission in Brussels said. That’s the highest since October 2007. Economists forecast a gain to 105.8, the median of estimates in a survey showed. (Bloomberg)
UK: Service industries unexpectedly contract on winter weather
UK service industries from banks to airlines unexpectedly contracted in December for the first time in more than 1.5 years as winter weather gripped the economy. The gauge fell to 49.7 from 53 in November, the first reading since April 2009 to show the industries shrank, Markit Economics Ltd. and the Chartered Institute of Purchasing and Supply said. Economists forecast 52.8, the median of 18 estimates in a news survey shows. Readings above 50 indicate growth. (Bloomberg)
US: Fewer Americans filed jobless claims over past month
Fewer Americans filed claims for unemployment insurance payments over the past month, indicating the labor market is improving. The average number of applications for jobless benefits over the past four weeks dropped to 410,750, the lowest level since July 2008, Labor Department figures showed. Claims for the week ended 1 Jan 2011 rose by 18,000 to 409,000. (Bloomberg)
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