China: Leading economic index rises, easing slowdown concern
An indicator of China’s economic outlook rebounded, easing concerns that the government’s campaign to curb inflation and asset bubbles may lead to a sudden slowdown in the world’s second-biggest economy. Premier Wen Jiabao this week vowed to tame inflation he described as a tiger that “once set free will be very difficult to put back into its cage.” The central bank has imposed three increases in interest rates and five adjustments to banks’ reserve requirements since mid-October to rein in liquidity that’s fueling gains in housing and food costs that could threaten social stability. (Financial Daily)
South Korea: Unemployment rate increases to 1-year high
South Korea’s unemployment rate rose to a one-year high in February as jobs in farms, hotels, restaurants, and the retail and wholesale sectors declined. The jobless rate rose to 4% from 3.6% in January, Statistics Korea said, citing seasonally adjusted figures. The median estimate in a Bloomberg News survey of eight economists was for a rate of 3.6%. A further climb may ease pressure on the central bank to extend interest-rate increases if it helps tame the fastest inflation in more than two years by curbing demand. Officials are also weighing the impact of the earthquake in Japan, saying they will help exporters if trade flows are disrupted. (Bloomberg)
Japan: Quake rebuilding may revive laggard northeast
Reconstruction from Japan’s record earthquake and ensuing tsunami may help revive a farming and manufacturing region that was already lagging behind the rest of the economy. Job prospects in Miyagi, where an estimated 10,000 people were killed, were worse than in most of the nation’s 47 prefectures in January. Neighboring Iwate had been hemorrhaging workers to Tokyo, while Fukushima was becoming increasingly dependent on its remaining factories even as Japanese manufacturers move abroad to emerging Asian markets. Prime Minister Naoto Kan’s government aims to compile a relief package as soon as next month, with the biggest opposition party calling for a JPY 5trn (USD62bn) effort, about USD5bn more than South Korea’s 1997 bailout package. (Bloomberg)
EU: Stocks slump the most in four months on nuclear concern
European stocks slumped the most in four months as concern grew that a Japanese nuclear power plant damaged by last week’s earthquake will leak radiation. Carmakers and chemical shares led losses on the Stoxx Europe 600 Index as all 19 industry groups lost at least 1.5%. Utilities E.ON AG and RWE AG sank more than 2%, while renewable-energy companies rallied as Germany said it will halt its seven oldest nuclear reactors as part of a safety review. BHP Billiton Ltd. led a selloff in basic-resource shares as metal prices retreated. The Stoxx 600 tumbled 2.3% to 266.32 at the 4:30p.m close in London, sliding below its 200-day moving average for the first time since August. The VStoxx Index, which measures the cost of protecting against declines in the Euro Stoxx 50 Index, climbed 16% to 31.01, the largest gain since November. (Bloomberg)
EU: February inflation quickens, adding pressure on ECB
European inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January, the European Union’s statistics office in Luxembourg said, confirming a 1 March estimate. That’s the fastest since Oct 2008 and exceeded the ECB’s 2% limit for a third month. Labor costs rose 1.6% in the fourth quarter from a year ago, after increasing 0.9% in the third quarter, a separate report showed. (Bloomberg)
UK: Jobless claims unexpectedly fall most in eight months
UK unemployment claims unexpectedly fell in February by the most in eight months, adding to signs that the economy may be recovering from the impact of the winter freeze. Jobless benefit claims dropped 10,200 from January to 1.45 million, the lowest since Feb 2009, the Office for National Statistics said. Economists forecast an increase of 1,300, according to the median of 24 predictions in a Bloomberg News survey. Unemployment based on International Labour Organization methods rose by 27,000 in the three months through January to 2.53 million, the highest since 1994. (Bloomberg)
US stocks slide on Japan concern, Yen reaches post-WWII high
US stocks sank, erasing the 2011 gain for the Standard & Poor’s 500 Index, and Treasuries rallied as Japan’s nuclear crisis worsened. The yen rose to a post-World War II high versus the dollar on speculation investors will buy the currency to fund rebuilding projects. Equities extended their retreat as US Nuclear Regulatory Commission Chairman Gregory Jaczko told lawmakers that all the water has drained from the spent-fuel pool at a crippled atomic reactor north of Tokyo and high levels of radiation have been released. The United Nations’ nuclear agency planned to call an emergency meeting to discuss the crisis and said the three reactor cores containing fuel are damaged. (Bloomberg)
U.S: Home construction slumps in February. Home construction dropped 23% to a 479,000 annual rate, while building permits slumped last month to a record low, Commerce Department figures showed. (Source: Bloomberg)
U.S: Producer prices in February rise more than forecast, led by food, oil. The producer-price index climbed 1.6% MoM from the prior month, the most since June 2009. The so-called core measure, which excludes volatile food and energy costs increased 0.2% MoM, matching forecasts. (Source: Bloomberg)
U.S: Mortgage applications fell last week on fewer purchases as a decline in borrowing costs failed to spur home buying. The Mortgage Bankers Association's index of loan applications declined 0.7% in the week ended March 11. The group's purchase index fell 4%, while a measure of refinancing climbed 0.9%.The prospect of further declines in home prices and more foreclosures in coming months may be prompting Americans to refrain from purchases. (Source: Bloomberg)
Japan: Manufacturers were pessimistic in 2Q11 before quake struck. Sentiment among manufacturers with more than JPY 1b (USD 12m) in capital was minus 3.2 points this quarter compared with minus 8 three months ago. The survey was conducted before the nation's biggest earthquake on March 11, and a negative number means pessimists outnumber optimists. (Source: Bloomberg)
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