Tuesday, June 7, 2011

20110607 0953 Global Economic Related News.

Hong Kong: Banks’ rate increases take steam out of housing boom
Hong Kong banks may have succeeded where the government failed as rising mortgage rates curb home price gains and cut sales to the lowest level in two years, signaling the property market may have peaked. HSBC Holdings Plc, which controls two of the city’s three-biggest banks by customers, is among lenders that accelerated mortgage rate increases in April as liquidity dried up. An index of home prices has stalled since 20 Mar, while the number of sales in April fell 37.6% from a year earlier to the lowest in more than two years, according to the Land Registry. The government has come under pressure to cool the property market, the world’s priciest according to Savills Plc, which had surged as much as 70% since the beginning of 2009 on record-low mortgage rates, an influx of buyers from other Chinese cities, and a lack of supply. (Bloomberg)

Australia: May construction index falls for 12th straight month
Australia’s building industry shrank for a 12th month in May as higher borrowing costs and consumer caution weighed on construction, a private survey showed. The construction performance index was 39.6 from 37.9 in April, marking a year since it was last in an expansion, according to a survey by the Australian Industry Group and the Housing Industry Association released in Sydney. A reading below 50 indicates the industry is contracting. Reserve Bank of Australia Governor Glenn Stevens will hold the benchmark interest rate at 4.75% today, according to a Bloomberg News survey of economists, after boosting borrowing costs seven times from October 2009 to November. A report last week showed the household savings ratio rose to 11.5% in the first quarter from 9.7% in the previous period, the highest level since 2009 as consumers exhibit greater restraint. (Bloomberg)

Australia: Annual inflation slowed in May as cheaper holiday travel and household appliances outweighed higher fruit and vegetable prices, a TD Securities Ltd. index showed. Consumer prices advanced 3.3% YoY in the 12 months through May after a 3.6% YoY gain a month earlier. They increased 0.2% MoM after a 0.3% MoM advance in April. (Source: Bloomberg)     

Spain: Industrial production contracted in April by the most in six months as the economy struggled to emerge from a three-year slump. Output at factories, refineries and mines declined 1.6% YoY, adjusting for the number of working days. Production fell 0.4% YoY in March, the institute said. Production of consumer durables, which include items such as washing machines, fell 11.4% YoY. (Source: Bloomberg)

EU: Regional fiscal revolt in Spain risks spreading
Catalonia’s refusal to meet Spain’s deficit target risks encouraging other regions to join in rebellion just as Prime Minister Jose Luis Rodriguez Zapatero’s authority may be weakened by the approach of general elections. Catalonia, Spain’s largest region with an economy the size of Portugal’s, plans a 2011 deficit twice as wide as its target, in a move Moody’s Investors Service said was “credit negative” for Spain. Zapatero will have to decide between allowing Catalonia to sell enough debt to fund the shortfall or antagonizing a state that has traditionally backed Socialists in national voting. The Catalan revolt may undermine Zapatero’s efforts to convince investors that his veto power over state bond sales gives him control over their budgets, which pay for half of Spain’s public workers. Still reeling from defeat in a local election campaign that may have further swelled regional budgets, the Socialists have to choose between fiscal discipline and voter support in the nine months until the general election. (Bloomberg)

EU: Producer-Price gains slow for first time in 8 months
European producer-price inflation slowed for the first time in eight months in April on weaker cost increases for intermediate goods as the European Central Bank prepares to keep interest rates on hold. Factory-gate prices in the euro region gained 6.7% from a year earlier after increasing a revised 6.8% in March, the European Union’s statistics office in Luxembourg said. That’s the first decline since August. Economists had projected an increase of 6.6% last month, according to the median of 21 estimates in a Bloomberg news survey. From the prior month, prices advanced 0.9% in April. Crude-oil prices have retreated 8.7% over the past two months to below USD100 a barrel, easing pressure on companies to pass on higher costs to protect earnings. With euro-area growth faltering and governments struggling to contain a debt crisis, the ECB has signaled it will keep its benchmark rate at 1.25% when Governing Council members meet on 9 June. (Bloomberg)

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