Singapore: May revise growth after Dec dip in manufacturing
Singapore's economic growth for 2010 may be revised slightly downwards after December manufacturing data came in below forecasts, economists said. Singapore's industrial output fell a seasonally adjusted 11.8% in December from November, hurt by a drop in pharmaceutical production which tends to be highly volatile on a month-to-month basis. (BT) Japan: Deficit expansion may lead to record bond sales The Japanese government’s prediction of wider budget deficits for the next three years may boost bond sales just as waning domestic demand drives yields higher. Yields on benchmark 10-year bonds rose 0.02 percentage points to 1.24%, and are up from a seven-year low of 0.82% in October. The government projected a combined shortfall of JPY155.5trn (USD1.9trn) through the three years ending March 2015. (Bloomberg)
China: Rate increases ‘necessary,’ Central Bank adviser Li says
China needs to extend interest rate increases and allow the yuan to gain by about 5% annually to combat inflation and avoid fuelling asset bubbles, said Li Daokui, a central bank monetary policy committee member. The People’s Bank of China has raised benchmark lending rates twice by a quarter-point since October to 5.81%. Consumer prices rose 3.3% in 2010, breaching a government target of 3%. (Bloomberg)
US: Sales of new homes in US rise more than forecast
Purchases of new houses in the US rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired. Sales climbed 18% to a 329,000 annual pace, figures from the Commerce Department showed. The percentage gain was the biggest since 1992, and was led by a record 72% jump in the West. (Bloomberg)
US: Fed maintains stimulus, seeking faster job gains
Federal Reserve policy makers maintained plans to buy USD600bn of Treasuries through June, indicating the accelerating recovery still needs stimulus to produce a bigger reduction in unemployment. The expansion is “continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said in its statement after a two-day meeting in Washington. (Bloomberg)
Germany: Import prices rose at the fastest annual pace in more than 29 years in December, driven by soaring costs for commodities such as energy and metal. Import-price inflation accelerated to 12% YoY, the highest rate since October 1981, from 10% YoY in November. (Source: Bloomberg)
Spain: Says some savings banks may need 10% capital. Spain will impose a core capital requirement of as much as 10% on lenders that don't have private investors and depend on wholesale funding, Finance Minister Elena Salgado said. The target exceeds the 8% minimum capital requirement she set two days ago and follows a slump in bonds and financial shares that followed the Jan. 24 announcement. (Source: Bloomberg)
Belgium: Faces rating cut as political crisis deepens. Belgium's political crisis escalated as the mediator charged with jump-starting stalled coalition talks gave up the job, putting the debt-laden nation's credit rating at risk. King Albert II accepted Johan Vande Lanotte's resignation and will start consulting with political party leaders, the royal palace in Brussels said in a statement. Vande Lanotte had undertaken a reconciliation mission after seven- party coalition talks broke down in September, leaving Belgium with a caretaker government and without a 2011 budget more than seven months after an inconclusive election. (Source: Bloomberg)
S. Korea: Posts current-account surplus for 10th month in December as demand for the nation's exports of cars and electronics products weathered an appreciation in the won. The surplus was USD 2.11b, compared with a revised USD 1.93b in November. (Source: Bloomberg)
Singapore: Industrial production rose at the slowest pace in four months as electronics and pharmaceutical manufacturers capped output amid easing orders. Manufacturing, which accounts for about a quarter of the economy, climbed 9% YoY in December after a revised 40.5% YoY increase in November, the Economic Development Board said in a statement. (Source: Bloomberg)
Singapore: Expects inflation to ease in second half after accelerating in the early part of the year. The Monetary Authority of Singapore said "headline inflation is expected to be higher over the next few months, mainly due to the recent surge" in car-permit and global food prices. "However, we expect it to moderate in the second half." (Source: Bloomberg)
Thailand: Interest rate needs to rise, central bank says. The Bank of Thailand needs to boost borrowing costs again to damp quickening inflation and may use capital controls if needed, Governor Prasarn Trairatvorakul said. The bank this year "needs to continue to raise the key interest rate further to bring monetary policy to a normal level in line with economic conditions," Prasarn said at a news conference in Bangkok. Inflation is the key risk, though not so serious that rates have to go up quickly, he said. (Source: Bloomberg)
U.S: Confidence increases more than forecast in January, reaching an eight-month high, as the outlook for jobs brightened. The Conference Board's sentiment index increased to 60.6 from 53.3 the prior month, figures from the New York-based private research group showed. (Source: Bloomberg)
U.S: Home prices declined 1.6% YoY in November, signaling housing has yet to join the U.S. rebound. The S&P/Case-Shiller index of home values in 20 cities fell 1.6% YoY, the biggest 12-month decrease since December 2009. (Source: Bloomberg)
U.K: 4Q10 GDP unexpectedly shrinks as construction slumped and the coldest December in a century hampered services and retailing. Gross domestic product fell 0.5% QoQ after increasing 0.7% QoQ in the previous quarter. From a year earlier, the economy expanded 1.7% YoY. (Source: Bloomberg)
France: Consumer spending on manufactured goods gained in December as the last month of a government-auto subsidy boosted sales. Spending rose 0.6% MoM from November, when it increased a revised 2.7% MoM. Spending advanced 0.4% YoY. (Source: Bloomberg)
Spain: Debt costs fall at auction as deficit shrinks. Spain sold EUR 2.2b (USD 3b) of Treasury bills and its borrowing costs fell as the central government said the budget deficit narrowed to within its target last year. The Bank of Spain said the country sold three-month bills at an average yield of 0.98%, compared with 1.804% the last time securities of the same maturity were auctioned on Dec. 21. It sold six-month bills at 1.801%, compared with 2.597% at the December auction. (Source: Bloomberg)
Japan: Bank of Japan raised its growth forecasts for the year through March and predicted faster inflation as strength in overseas demand bolsters exports and pushes up commodity prices. "The economy will probably emerge from its slump soon and return to a moderate recovery path, although I cannot say for sure whether it will happen in the first quarter," Governor Masaaki Shirakawa said at a press conference after his board raised its growth forecast to 3.3% from 2.1%. "The economy is headed in a desirable direction," where it can achieve stable prices and sustainable growth, he said. (Source: Bloomberg)
India: Central bank increased the benchmark interest rate to a two-year high and signaled further gain in borrowing costs as it raised the inflation forecast. Governor Duvvuri Subbarao lifted the repurchase rate to 6.5% from 6.25%, according to a statement from the Reserve Bank of India in Mumbai. (Source: Bloomberg)
S. Korea: Economic growth slowed in 4Q10 after industrial production moderated. Gross domestic product rose 0.5% QoQ in the three months through December from the previous quarter, when it advanced 0.7% QoQ. GDP increased 4.8% YoY. (Source: Bloomberg)
Australia: CPI advanced last quarter at the slowest pace in almost two years as a stronger currency lowered costs for household appliances, clothing and cars from abroad. The consumer price index rose 0.4% QoQ from the July-September period, when it increased 0.7% QoQ. Prices were 2.7% YoY, the smallest gain in a year. (Source: Bloomberg)
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