Thursday, March 31, 2011

20110331 0938 Global Economic Related News.

Taiwan: May raise key rate as Asia strives to curb inflation
Taiwan will probably increase borrowing costs for a fourth straight quarter tomorrow, becoming the eighth Asian economy to tighten monetary policy this month as the region fights price pressures. The central bank will raise the discount rate on 10-day loans to banks by 0.125ppt to 1.75%, after increases of the same amount each in June, September and December from a record low. (Bloomberg)

South Korea: GDP growth slows to 0.5% in fourth quarter
South Korea’s economic growth slowed in the fourth quarter in line with initial estimates, underpinning the case for the central bank to pause interest- rate increases amid concern Japan’s earthquake will damp demand. GDP grew 0.5% in the three months to December from the third quarter, unchanged from the previous estimate in January and after a 0.6% gain in the third quarter. The economy expanded 4.7% y-o-y, lower than the earlier estimate of 4.8%. Japan’s 11 Mar earthquake and tsunami, which triggered a nuclear crisis, and volatile oil prices from political unrest in the Middle East sent South Korea’s consumer confidence in March to the weakest level in almost two years. (Bloomberg)

Japan:Industrial production increases before earthquake
Japan’s industrial production unexpectedly rose in February, another sign that the economy was recovering before the nation’s strongest earthquake this month shut factories and caused power shortages. Factory output climbed 0.4% from January, the fourth consecutive gain. Economist estimates was for a 0.1% drop. The unemployment rate fell by the most in a year in February and the Bank of Japan’s Tankan survey this week may show companies were optimistic about the economy before the temblor killed more than 11,000 people. (Bloomberg)

Japan: Urged to ‘seize this moment’ or face another lost decade
Japan begins forging a road map for recovery from its worst postwar disaster next month, a process that may determine whether it sheds the legacy of the 1980s bubble or has a third “lost decade” of stagnation and deflation. Key to the result: whether the nation’s companies end an aversion to borrowing, taking on debt to propel domestic investment and wage gains, and whether policy makers embrace a stimulus financed by Bank of Japan money creation. Prime Minister Naoto Kan aims to compile in April the first of what he says may be multiple supplementary budgets. (Bloomberg)

EU: Economic confidence slipped in March on energy, Japan
European confidence in the economic outlook worsened in March, after surging energy costs and Japan’s earthquake clouded global growth prospects. An index of executive and consumer sentiment in the 17- nation euro region slipped to 107.3 from a revised 107.9 in February, which was the highest since Aug 2007, the European Commission in Brussels said. It had previously reported a February reading of 107.8. Economists forecast a drop to 107.5, the median of 25 estimates in a Bloomberg News survey showed. Crude oil prices have jumped 15% this year, leaving companies and households with less money to spend as European governments step up austerity measures to narrow budget gaps. (Bloomberg)

US:Confidence decreases to a three-month low
Confidence among US consumers dropped more than forecast in March as fuel costs surged to the highest level in more than two years. The Conference Board’s confidence index fell to a three- month low of 63.4 from a revised 72 reading in February. Another report showed home prices decreased in January for a seventh consecutive month. Rising commodity prices and falling home equity are undermining Americans’ sentiment. A pickup in the job market and savings from tax cuts make it less likely that consumer spending, which accounts for about 70% of the economy, will falter. (Bloomberg)

Global: IMF says economic recovery facing 'considerable risk'. The global economic recovery faces "considerable downside risks," said Naoyuki Shinohara, deputy managing director of the Washington-based International Monetary Fund. The improvement will be led by emerging markets where overheating and inflationary pressures in some countries are being exacerbated by large capital flows and rising commodity prices, Shinohara said in Gaborone, Botswana's capital, according to the text of his speech. (Source: Bloomberg)

E.U: Sovereign rating announcements have had "significant" spillover effects in the region, revealing their potential to stir financial instability, International Monetary Fund economists said in a study. The research was released just as Portugal and Greece were downgraded by Standard & Poor's, adding pressure on policy makers to stem the debt turmoil that led to bailouts of Greece and Ireland. Cuts to levels near the lowest investment grade for "relatively large economies" such as Greece have had a systematic impact on other countries sharing the euro, the study said. (Source: Bloomberg)

Portugal: In condition to meet its debt maturities this year, Secretary of State for Treasury and Finance Carlos Costa Pina said. Portugal can meet "debt redemption commitments scheduled for 2011, especially the redemptions of long-term debt that will take place in April and June," Costa Pina said in an emailed response to questions. (Source: Bloomberg)

Japan: Manufacturing contracts in March, first sign of quake impact. Japan's manufacturing shrank this month for the first time since the nation was pulling out of its last recession two years ago, underscoring forecasts for the economy to shrink in the aftermath of the March 11 earthquake. The index fell to 46.4 in March from 52.9, the Japan Materials Management Association and Markit Economics said in a joint release. A number below 50 indicates a contraction. (Source: Bloomberg)

S. Korea: February industrial output falls fastest in 4 months as a holiday season closed some factories. Output declined 2.3% MoM from January, when the monthly gain was revised to 4.2% MoM. Production climbed 9.1% YoY. (Source: Bloomberg)     

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