Malaysia: China expected to remain Malaysia's largest trading partner
China is expected to remain as Malaysia's largest trading partner this year, helped by closer trading ties, said Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan. China was Malaysia's largest trading partner in 2010, accounting for 12.6% of total trade. Trade between both countries increased more than six-fold over the past 10 years, reaching USD45.66bn (RM138.35bn) in 2010. "China is continuing to play a greater role in the global economy and we have also strengthened our ties with them through Asean FTAs (free trade agreements). Also with the lower tariffs and barriers imposed, we are expecting to see freer movements of goods between both countries," said the deputy minister. (BT)
Japan: Tankan signals concern that business confidence will keep sliding
Japan’s large manufacturers expect business confidence to slump in coming months after the nation’s strongest earthquake on record devastated the northeast region on 11 March. The quarterly outlook index of sentiment among big manufacturers is seen falling to minus 2 in June from 6 in March, which would be the lowest reading in a year, according to a breakdown of the Bank of Japan’s Tankan survey released in today. A negative number means pessimists outnumber optimists. (Bloomberg)
Australia: Flood, cyclone disasters to cost economy USD9.4bn, Swan says
Australian Treasurer Wayne Swan said recent natural disasters will likely cost the economy around AUD9bn (USD9.4bn) after the government raised estimates on losses to the coal industry by 20%. “The cost is likely to be even larger than we initially thought,” Swan said in a weekly economic note yesterday. Lost coal production may cost AUD6bn instead of the AUD5bn previously forecast, the Treasurer said, warning that the numbers are “conservative” compared with estimates from some businesses. Damage to crops would add AUD2bn to the bill and lost tourism amounts to AUD400m, he said. (Bloomberg)
Australia: RBA chief Stevens set for longest rate pause since 2006
Reserve Bank of Australia Governor Glenn Stevens will hold interest rates unchanged for the longest period of his tenure as a weaker Japanese economy slows exports and eases inflation expectations, money markets show. Stevens will keep the overnight cash rate target at 4.75% tomorrow, the highest benchmark in the developed world, according to all 25 economists surveyed by Bloomberg News. Borrowing costs, which haven’t risen since November, won’t increase until at least September, and traders see a 34% chance of an increase in December, bank bill contracts on the Sydney Futures Exchange show. (Bloomberg)
Spain: Spain's deficit fight risks setback as Zapatero bows out of 2012 election Spain’s efforts to reduce its budget deficit and rebuild investor confidence may suffer a setback as Prime Minister Jose Luis Rodriguez Zapatero bows out of next year’s election. Zapatero, 50, said on 2 April he won’t seek a third four- year term, forcing his party to select a new candidate a year before March 2012 elections. The Socialists, which are trailing the opposition in opinion polls, will hold primaries after regional and local elections on 22 May, Zapatero told party members in the capital Madrid. “It means he’s no longer a relevant figure, so I think this may be really problematic from a policy-making perspective over the coming year,” said Ken Dubin, a political science professor at Carlos III University in Madrid. (Bloomberg)
US: Geithner says US to reach debt limit no later than 16 May
The US will reach its USD14.29tn legal debt limit no later than 16 May unless Congress acts before then, Treasury Secretary Timothy Geithner said today, and he warned of “severe hardship” for Americans if lawmakers fail to act. If the limit hasn’t been raised by 16 May, the Treasury Department will turn to a toolkit of emergency measures that can provide up to eight weeks of additional borrowing room, Geithner said. That extra time would end about 8 July, the Treasury chief said. (Bloomberg)
US: Service industries probably grew at close to fastest pace since 2005
Service industries probably expanded in March at close to the fastest pace since 2005, a sign the US economic expansion is broadening beyond manufacturing. The ISM index of non-manufacturing businesses was little changed at 59.5 after a 59.7 reading the previous month that was the highest since August 2005, according to the median of 53 forecasts in a Bloomberg News survey ahead of the 5 April data. Another report may show first-time filings for unemployment benefits fell last week. (Bloomberg)
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