Malaysia: Posts balance of payments surplus in 1Q
Malaysia's balance of payments posted a surplus of RM15.9bn in the first quarter compared with a deficit of RM19.6bn in the same quarter last year. From the fourth quarter of last year, the surplus in the first quarter dipped from RM17.9bn, said the Statistics Department in a statement yesterday. The surplus in the first quarter compared with the same period last year rose because of a lower outflow in the financial account which reported an outflow of RM6bn from RM17.6bn previously. The current account surplus in the first quarter of 2011 improved to RM30.2bn while international reserves increased by RM15.9bn to RM344.5bn. (StarBiz)
China: Local-Government debt risk needs 'attention,' PBOC says. Chinas central bank urged paying attention to the credit risks of local-government financing vehicles because their debts have long maturities and are difficult to oversee. Some companies set up by provincial and municipal governments to fund infrastructure projects are unsustainable, the Peoples Bank of China said in a report on its website. The loans are generally large, with long maturities, and it is difficult to oversee their use, the central bank said. (Source: Bloomberg)
India: Food inflation slows to two-week low as supplies increase. An index measuring wholesale prices of agricultural products rose 8.06% YoY in the week ended May 21 compared to 8.55% YoY the previous week. (Source: Bloomberg)
Thailand: Vote may force rates higher as parties promise handouts
Thailand’s election may force the central bank to add to seven interest-rate increases in the past year, as promises of higher wages and handouts by politicians threaten to spur inflation. Prime Minister Abhisit Vejjajiva has pledged to raise the minimum wage by 25%, give cash to the elderly and guarantee farmers’ incomes to appeal to voters loyal to exiled former premier Thaksin Shinawatra. The opposition Pheu Thai party, led by Thaksin’s sister, has promised tablet PCs, rice- price guarantee schemes, high-speed trains, dams, and a new city. The policies promoted by both the government and opposition would put the onus on the Bank of Thailand to contain inflation that’s accelerated to a 32-month high. (Bloomberg)
Australia: Trade surplus unexpectedly narrowed in April
Australia’s trade surplus unexpectedly narrowed in April as imported civil aircraft outpaced rising exports of metal ores and minerals. The excess of exports over imports was AUD1.6bn (USD1.7bn), from a revised AUD1.69bn surplus in March. Reserve Bank of Australia Governor Glenn Stevens has paused raising interest rates at 4.75% for the past five meetings to help the economy recover from natural disasters at home and abroad. (Bloomberg)
Greece: Agrees to EUR6.4bn in budget steps
Greece has agreed to EUR6.4bn in new measures to cut its 2011 budget deficit and aims to wrap up bailout talks with international inspectors by Friday, a senior government official told Reuters yesterday. Prime Minister George Papandreou would present the main points of the government's medium-term budget plan when he meets JeanClaude Juncker, the chairman of euro zone finance ministers, in Luxembourg yesterday, the official said. (StarBiz)
Greece: EU, IMF wind up review as second bailout readied. European Union and International Monetary Fund officials will complete a review of Greece's plan for EUR 78b (USD 113b) in asset sales and austerity measures as they prepare the nation's second bailout in little more than a year. The assessment caps a week when Greeces fiscal crisis worsened enough for Moody's Investors Service to raise the probability of a default to 50%.
(Source: Bloomberg)
US: Consumer comfort rises for second week on fuel prices
Consumer confidence in the US rose for a second week as gasoline prices receded. The Bloomberg Consumer Comfort Index improved to minus 47.1 in the week ended 29 May from minus 48.4 in the prior period. The 2.3- point gain over the past two weeks has yet to make up for the 6.8-point month long slide that propelled the gauge to a nine-month low two weeks ago. Gasoline costs that have dropped by about 20 cents a gallon in the past month from an almost three-year high may continue to support sentiment. At the same time, falling home prices and slowing job growth may cause households to limit spending, which accounts for about 70% of the world’s largest economy. (Bloomberg)
US: Jobless claims decrease less than forecast
More Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs. Jobless claims fell by 6,000 to 422,000 in the week ended 28 May, according to Labor Department figures yesterday in Washington. A pickup in dismissals signals companies will also look to limit hiring, raising the risk that employment data due tomorrow will show payroll gains moderated in May. Slowing job growth may cause households to further curb spending, which accounts for about 70% of the world’s largest economy. (Bloomberg)
U.S: Moody's says rating may be cut if no progress on debt limit. Moody's Investors Service said it will put the U.S. governments Aaa credit rating under review for a downgrade unless theres progress on increasing the debt limit by mid-July. "The heightened polarization over the debt limit has increased the odds of a short-lived default," New York-based Moody's said in a statement. "If this situation remains unchanged in coming weeks, Moodys will place the rating under review." (Source: Bloomberg)
U.S: Factory orders fell 1.2% MoM in April, most since May 2010 as demand for aircraft waned and Japans earthquake restrained auto-related supplies. This followed a revised 3.8% MoM gain in March. Orders for durable goods fell 3.6% MoM. (Source: Bloomberg)
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