Malaysia: Export growth slowed in July as global demand waned
Malaysia’s export growth slowed in July as demand for electrical and electronic products eased, sustaining pressure on the central bank to refrain from raising interest rates. Overseas shipments rose 7.1% to RM59.2bn (USD20bn) from a year earlier after gaining a revised 9.6% in June, the trade ministry said. Malaysia’s exports have been undermined by a faltering US economy and Europe’s sovereign-debt crisis even as disruptions following the Japan earthquake in March have started to ease and shipments of commodities climb. (Bloomberg)
Malaysia and Asia: Central banks hold rates as global turmoil dims outlook
Four central banks in Asia held off from raising borrowing costs today even as the region contends with elevated inflation rates, forced into inaction by the threat of a slump in exports as the global outlook dims. Malaysia left its overnight policy rate at 3%. The Bank of Korea held its benchmark interest rate at 3.25%, and the central banks of Indonesia and the Philippines kept their rates at 6.75% and 4.5%, they said in statements. Economic data in the region yesterday showed an unexpected drop in Australian payrolls and the biggest slide in machinery orders in Japan in 10 months, adding to evidence of the toll from receding confidence among consumers from Europe to the US. (Bloomberg)
Euro: Trichet backs Italian austerity before debt sales
European Central Bank President Jean-Claude Trichet’s endorsement of Italy’s austerity plan may signal his willingness to further backstop the country’s bonds before EUR18.5bn (USD26bn) of debt sales next week. The Senate’s passage of the EUR54bn package on 7 Sept was of “extreme importance” and the final plan was “in line” with Italy’s initial pledge to balance the budget in 2013, Trichet said. Italy’s 10-year bond slid for 11 days through 5 Sept on concern that weeks of changes to the plan threatened ECB support for Italian debt. (Bloomberg)
UK: Bank of England resists calls to add more stimulus to economy
Bank of England officials resisted calls to extend economic stimulus as they attempt to navigate a path between accelerating inflation and a faltering recovery. The nine-member Monetary Policy Committee, led by Mervyn King, maintained the target of its bond program at GBP200bn (USD319bn), a move forecast by economists. It also held the benchmark interest rate at a record-low 0.5% yesterday. (Bloomberg)
US: Consumer comfort index falls to second lowest this year
US consumer confidence last week fell to the second-lowest level this year as Americans grew more pessimistic about the world’s largest economy. The Bloomberg Consumer Comfort Index was minus 49.3 in the period to 4 Sept compared with minus 49.1 the previous week. This year’s low of minus 49.4 was reached in May, when gasoline prices were the highest in three years. While the drop was within the survey’s 3-point margin of error, the index has been stuck below minus 40 - the level associated with recessions or their aftermath -- since the end of February. (Bloomberg)
US: Jobless claims unexpectedly rose to 414,000 last week
Claims for US unemployment benefits rose last week, a sign the labor market is struggling to gain traction more than two years after the recession ended. Jobless claims rose by 2,000 to 414,000 in the week ended 3 Sept, Labor Department figures showed. The number of people on unemployment benefit rolls and those receiving extended payments fell. Companies are stepping up the pace of firings; raising the risk that consumer spending will slow further. Job growth stagnated last month and the unemployment rate held unchanged at 9.1%, the Labor Department reported last week. The Labor Department said there was no national effect from Hurricane Irene. (Bloomberg)
US: Smaller trade gap Is bright spot for recovery
The U.S. trade deficit narrowed more than forecast in July as exports climbed to a record, offering a bright spot for an economy at risk of a bigger slowdown. The gap shrank 13.1%, the most since Feb 2009, to USD44.8bn from a revised USD51.6bn shortfall in June, Commerce Department figures showed. Exports rose as companies shipped more capital goods and automobiles overseas. (Bloomberg)
Bernanke disappointment pushes Wall Street lower
US stocks closed sharply lower on Thursday, 8 Sept after Federal Reserve Chairman Ben Bernanke gave no indications of new stimulus measures to boost the flagging economy in a keenly awaited speech. Investors have been looking to Bernanke, who gave his outlook on the US economy on Thursday, and other policymakers to address a host of concerns from slowing global growth to Europe's debt crisis. The Dow Jones industrial average .DJI dropped 119.05 points, or 1.04%, to 11,295.81 while the Standard & Poor's 500 Index fell 12.72 points, or 1.06%, to 1,185.90. (Financial Daily)
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