OECD: Says G-7 recovery gaining strength, sees price risks. "With financial conditions improving across the board, it seems likely that the recovery is becoming self-sustained," the Paris-based organization said in its interim assessment. While "public finances remain in distress in most OECD countries," some central banks "will need to deal with a risk that inflation expectations may become unanchored." (Source: Bloomberg)
U.S: Service industries grew less than forecast in March, showing higher fuel costs are raising concern sales will cool. The Institute for Supply Management's index of non-manufacturing companies fell to 57.3 from 59.7 in February. Readings greater than 50 signal growth. (Source: Bloomberg)
E.U: Retail sales in February unexpectedly fall as energy costs soar. Sales in the 17-nation euro region slipped 0.1% MoM from January, when they advanced 0.2% MoM. Sales rose 0.1% YoY. (Source: Bloomberg)
Japan: May restrict power use as summer set to worsen shortages. Energy-supply constraints due to the damage to the Fukushima Dai-Ichi nuclear power plant following last month's earthquake and tsunami mean the step must be considered, Chief Cabinet Secretary Yukio Edano said. (Source: Bloomberg)
Philippines: Inflation held at the fastest pace in nine months in March, supporting the central bank's decision to raise interest rates for the first time since August 2008. Consumer prices increased 4.3% YoY, matching the gain in February, the National Statistics Office said in Manila. (Source: Bloomberg)
Vietnam: Will increase the minimum wage by 14% next month, raising concern that higher labor costs may fan inflation that is already at a 25-month high. The government will lift the monthly minimum wage to VND830,000 (USD40) from VND730,000, effective May 1, according to a statement posted on its website. (Source: Bloomberg)
Malaysia: Exports rise 10.7%, fastest pace in seven months
Malaysia’s exports rose at the fastest pace in seven months in February as manufacturers shipped more electronics as well as oil and gas products to customers in Hong Kong and Japan. Overseas sales climbed 10.7% to RM51.8bn (USD17bn) from a year earlier after gaining a revised 4.6% in January, according to a trade ministry statement in Kuala Lumpur today. That was twice the 5% median estimate in a Bloomberg News survey of 18 economists. Malaysia, an oil and gas exporter and the world’s second- biggest palm oil producer, may benefit from rising commodity prices even as an easing in the global recovery and Japan’s 11 March earthquake threaten to cool demand for Asian goods. Singapore’s export growth slowed more than economists predicted in February as electronics shipments fell after the Lunar New Year curbed demand from China for parts. (Bloomberg)
China: Raises rate fourth time since October to tame prices
China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles in the fastest-growing major economy. The benchmark one-year lending rate will increase to 6.31% from 6.06%, effective tomorrow, the People’s Bank of China said on its website at the end of a national holiday. The one-year deposit rate rises to 3.25% from 3%. (Bloomberg)
Australia: RBA keeps key rate at 4.75% as rising currency eases prices
Australia’s central bank left its benchmark interest rate at the highest level in the developed world as floods disrupt coal mining in the nation’s northeast and a rising currency tempers inflation. Reserve Bank of Australia Governor Glenn Stevens held the overnight cash rate target at 4.75% for a fourth straight meeting, as forecast by all 25 economists surveyed by Bloomberg News. He called the level “mildly restrictive” and appropriate given the economy’s outlook. “The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected,” Stevens said. (Bloomberg)
Australia: Trade balance unexpectedly swings to deficit
Australia’s trade balance unexpectedly swung to a deficit in February for the first time in almost a year as disruptions from natural disasters cut mining shipments and higher fuel prices boosted imports. The shortfall was AUD205m (USD212m), from a revised AUD1.43bn surplus in January, the first time imports exceeded exports since March 2010, the Bureau of Statistics said. The median estimate in a Bloomberg News survey of 23 economists was for a surplus of AUD1.2bn. The Australian dollar, which yesterday reached the highest level since it was freely floated in 1983, fell after the report. The central bank is forecast to hold its benchmark interest rate unchanged at 4.75% today as torrential rains in Queensland in January and Cyclone Yasi in February cut shipments and Japan, Australia’s second-biggest trading partner, grapples with earthquake damage and a nuclear crisis.(Bloomberg)
EU: Portugal Cut to Baa1 From A3 by Moody’s on Bailout View
Portugal’s credit rating was cut by Moody’s Investors Service for the second time in three weeks amid expectations it will be unable to avert a European bailout. Moody’s downgraded Portugal’s long-term government bond ratings by one level to Baa1 from A3, and said it’s considering another reduction. Today’s move put the country at the same level as Ireland, Russia, Mexico and Thailand. Fitch Ratings on April 1 downgraded Portugal three notches to BBB-, the lowest investment grade, and kept the rating on “watch negative.”“Moody’s rating action was driven primarily by increased political, budgetary and economic uncertainty,” the company said in an e-mailed statement today. It expects the winner of June 5 elections to tap the European Financial Stability Facility with “urgency,” and that Portugal will be able to get support from other euro members before then if necessary. (Bloomberg)
US: Service industry probably grew close to fastest since 2005
Service industries probably grew in March at close to the fastest pace in more than five years, an indication the U.S. economic expansion is broadening beyond manufacturing, economists said. The median forecast in a Bloomberg News survey for the Institute for Supply Management’s non-manufacturing gauge is 59.5 after a 59.7 reading in February that was the highest since August 2005. A figure above 50 signals growth for the Tempe, Arizona-based ISM’s measure. Accelerating job growth may help sustain household spending, which faces headwinds from higher food and fuel bills. Federal Reserve officials said last month the economy is on “firmer footing,” diminishing the need to extend a bond purchase program beyond June. (Bloomberg)
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