China: New loans, money supply growth slow after tightening
China’s lending and money supply grew by less than economists expected in February, aiding the government’s campaign to rein in prices in the fastest-growing major economy. Banks extended RMB535.6bn of new localcurrency loans last month, compared with the RMB600bn median estimate. M2, the broadest measure of money supply, climbed 15.7% compared with the median forecast of 17%. February’s new loans compared with RMB700bn a year earlier and RMB1.04trn in January. (Bloomberg)
China: Manufacturing surpassed US in 2010
China’s manufacturing sector surpassed that of the US last year to take the world’s No 1 spot, boosted by faster economic growth. China’s manufacturing added almost USD2trn the country’s GDP in 2010, compared with USD1.95trn in the US. That’s the first time China has topped the US since data collection began after World War II. The US ranked first in 2009, with USD1.73trn in value added, a drop of more than 8% from 2008 on an inflation-adjusted basis. China was second, with USD1.69trn, an increase of 11%. (Bloomberg)
Japan: Bank of Japan pumps cash, boosts asset purchases
The Bank of Japan (BOJ) poured a record amount of cash into the financial system and doubled the size of its asset-purchase plan to shield the economy from the effects of the nation’s strongest earthquake on record. The central bank pumped JPY15trn (USD183bn) into money markets to assure financial stability amid a plunge in stocks and surge in credit risk. The BOJ also enlarged a program buying assets from government bonds to exchange-traded funds by JPY5trn. Corporate debt will rise by JPY1.5trn and it will also take on an additional JPY450bn in ETFs and JPY50bn in REITs. (Bloomberg)
India: Inflation rate unexpectedly accelerates
India’s inflation unexpectedly accelerated in February, increasing pressure on the central bank to raise interest rates this week for the eighth time in a year. The wholesale-price index rose 8.31% y-o-y after an 8.23% jump in January. The median forecast was for a 7.8% increase. Manufacturing inflation accelerated to 4.9% in February from 3.8% in January. Fuel inflation quickened to 11.49% last month. (Bloomberg)
UK: Fitch affirms AAA rating on ‘strong’ budget plan
Fitch Ratings said the UK should keep its top credit grade, citing the government’s efforts to reduce the budget deficit and the easing of risks related to the banking industry. Fitch commented that the strong budgetary consolidation effort and declining fiscal risks arising from the UK financial sector support the ‘stable outlook’ on the AAA ratings. Fitch said the “principal risk” to the rating is a weaker-than-expected recovery that forced the government to reassess its fiscal plans and led to additional bank strains. However, it does not currently consider these threats “to be sufficiently material to threaten” the AAA rating. (Bloomberg)
China: Lending and money supply grew by less than economists expected in February, aiding the government's campaign to rein in prices in the fastest-growing major economy. Banks extended CNY 535.6b (USD81.5b) of new local-currency loans last month. M2, the broadest measure of money supply, climbed 15.7% YoY. (Source: Bloomberg)
Japan: Moody's sees risk of hitting fiscal 'tipping point'. Japan may "at some point" reach a fiscal "tipping point" if investors lose confidence in the soundness of government finances and demand a risk premium on the nation's bonds, Moody's Investors Service said. The March 11 earthquake "may have shifted such a potential tipping point a bit forward, unless Japan's political parties are galvanized by the crisis to also address the country's long- term fiscal challenges," Tom Byrne, a senior vice president with Moody's, said in an emailed note. (Source: Bloomberg)
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