Tuesday, October 11, 2011

20111011 1012 Global Economic Related News.

China: Central Huijin begins boosting stakes in China’s biggest banks
China’s state-run Central Huijin Investment Ltd began buying shares in the nation’s four biggest banks after valuations dropped below levels reached during the global financial crisis. Central Huijin started acquiring stock in Industrial & Commercial Bank of China Ltd, China Construction Bank Corp, Agricultural Bank of China Ltd and Bank of China Ltd yesterday, according to a statement on its website. The fund will continue with “related market operations,” it said, without providing details on how much it will invest and whether it will buy the shares in Hong Kong or Shanghai. “The move is a gesture to demonstrate support,” Ivan Li, deputy head of research at Kim Eng Securities Hong Kong Ltd, said by telephone yesterday. (Bloomberg)

China: Rate swaps show bets monetary policy to be eased: China credit
Chinese banks’ cost of fixing interest rates for a year fell to an eight-week low as signs of cooling economic growth fan speculation that the central bank will start relaxing monetary policy in the next few months. The one-year swap contract, which exchanges fixed payments for the floating seven-day repurchase rate, has declined seven basis points in October to 3.68%, the lowest level since 15 Aug, according to data compiled by Bloomberg. Similar- maturity contracts in Brazil rose on concern faster inflation will limit the scope for interest-rate cuts, while India’s climbed as the government stepped up borrowing plans. (Bloomberg)

China: Retail sales were "robust" during last week's seven-day national holiday, the Ministry of Commerce said. Spending at shops and restaurants surveyed by the ministry over the so-called Golden Week break jumped 17.5% YoY to CNY 696.2b (USD109b), the ministry said in a statement on its website. (Source: Bloomberg)

E.U: Leaders target bank capital in next 'final' crisis plan. Angela Merkel and Nicolas Sarkozy turned their crisis-fighting focus to banks, promising a recapitalization blueprint this month that will overtake a 12-week-old rescue plan that has yet to be put into place. "We will recapitalize the banks," the French president said in Berlin at a joint briefing with the German chancellor without providing details. "We'll do it in complete agreement with our German friends because the economy needs it, to assure growth and financing." (Source: Bloomberg)

E.U: Investor confidence fell to the lowest in more than two years in October on concern that the region's debt crisis and weaker growth in emerging markets will hurt economic expansion. An index measuring sentiment in the 17-nation euro region declined to minus 18.5 from minus 15.4 in September, the Limburg, Germany-based Sentix research institute said in an emailed statement. A gauge of current business conditions plunged to minus 5.75 from
minus 3.25, while an indicator of expectations dropped to minus 30.5 from minus 26.75. (Source: Bloomberg)

Germany: Exports rose for the first time in three months in August. Exports, adjusted for work days and seasonal changes, surged 3.5% MoM from July, when they dropped 1.2% MoM, the Federal Statistics Office in Wiesbaden said. That's the steepest increase since March. Imports were unchanged from the previous month, when they rose 0.5% MoM. (Source: Bloomberg)

Italy: Industrial output increases in August. Output advanced 4.3% MoM from July, when it dropped a revised 0.3% MoM. Output climbed 4.7% YoY on a workday-adjusted basis. (Source: Bloomberg)

Australia: September job advertisements fell for the fifth time in six months as global financial instability discouraged companies from hiring, a private report showed. Jobs advertised in newspapers and on the Internet dropped 2.1% MoM last month after declining a revised 0.7% MoM in August, according to an Australia & New Zealand Banking Group Ltd. report released in Melbourne. (Source: Bloomberg)  

Sri Lanka: Keeps interest rates on hold to boost economic growth
Sri Lanka’s central bank left interest rates unchanged for a ninth straight month to support growth as the global economy falters. The Central Bank of Sri Lanka retained its reverse repurchase rate at 8.5% and the repurchase rate at 7%, the Colombo-based bank said on its website yesterday. Six of seven economists in a Bloomberg News survey predicted the decision. One expected a reduction of half a percentage point. “Sri Lanka may cut rates going forward as inflation is less of a worry in the country and the main objective is to promote growth,” said Jay Shankar, Mumbai-based chief economist at Religare Capital Markets Ltd.

Russia: Putin courts China as Russia seeks to bridge differences on gas
PM Vladimir Putin may give Asia more weight in Russian foreign policy when he returns to the presidency next year, broadening a relationship with China and trying to bridge differences on gas exports. Putin, who will meet Chinese President Hu Jintao and counterpart Wen Jiabao on a two-day trip to Beijing that starts today, will take full control of foreign policy again after four years marked by improving ties with the US under outgoing President Dmitry Medvedev. The PM, who aims to reclaim the Kremlin next May by swapping jobs with his successor, is seeking to diversify trade with China and navigate a stalemate in talks on natural- gas deliveries to the world’s second-biggest economy. (Bloomberg)

EU: Euro leaders postpone Crisis summit amid Greek writedown fury
European leaders pushed back a debt-crisis summit amid opposition to German Chancellor Angela Merkel’s drive for deeper-than-planned writedowns of Greek bonds. The 18 Oct meeting was postponed to 23 Oct as Europe gropes toward a master plan for dealing with Greece’s oversized debt, insulating the Spanish and Italian markets, and shielding banks from the fallout. Opposition to bigger Greek debt writedowns is coming from the European Central Bank, which is against any backsliding from the 21 July accord on a second Greek bailout, a central bank official said yesterday. (Bloomberg)

UK: BOE’s miles sees ‘Good Reasons’ to be optimistic on QE impact
Bank of England policy maker David Miles said the outlook for the economy has worsened and there are “good reasons” to think that the central bank’s expansion of stimulus will aid the recovery. “Since August, the news on the economic outlook has been overwhelmingly negative,” Miles said in a speech in London late yesterday. “I believe that there are very good reasons for thinking that purchases of government bonds in exchange for money created by the central bank will have an impact on a range of asset prices and will influence the cost and availability of credit to the private sector.” The Bank of England raised the ceiling for bond purchases to GBP275bn (USD431bn) from GBP200bn last week, the biggest expansion since the first round of stimulus in March 2009. (Bloomberg)

US: S&P 500 caps biggest gain since August on Europe support pledge
US stocks advanced, giving the Standard & Poor’s 500 its biggest rally since August, after the leaders of France and Germany pledged a plan to support European banks and stem the region’s debt crisis. The S&P 500 advanced 3.4% to 1,194.89. It had the biggest rally over five days since March 2009, gaining 8.7%. The Dow Jones Industrial Average added 330.06 points, or 3%, to 11,433.18. The Russell 2000 Index of small companies surged 4.4%. (Bloomberg)

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