Wednesday, February 8, 2012

20120208 0944 Global Economic Related News.

The JPMorgan Investor Confidence Index for Singapore, taken every six months, stands at 86, the lowest since it was launched a year ago (121 in Jul 2011 and 134 in Dec 2010; index level of 100 is neutral, while 200 is extremely optimistic and zero is extremely pessimistic). The survey also found Singapore remained the favourite investment destination among the respondents over the next six months, followed by Asian regional markets and real estate as more investors shun the US and Europe due to perceived higher risks. (Reuters)

Singapore’s foreign reserves in Jan increased to US$245.49bn (US$237.74bn in Dec). (Bloomberg)

China: Central bank pledges support for homebuyers as sales slide

China’s central bank pledged support for first-home buyers as a crackdown on real-estate speculation threatens to trigger a property slump in the world’s second-biggest economy. Officials will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website. A government clampdown aimed at make housing affordable is cooling prices and driving down transactions as Europe’s sovereign-debt crisis caps export demand. Home prices in 52 of 70 major cities declined in Dec from Nov, according to government data. [Bloomberg]

China’s non-manufacturing PMI eased to 52.9 in Jan (56 in Dec). (Bloomberg)

China’s industrial profits rose 25.4% yoy in YTD Dec (24.4% in Nov). (Bloomberg)

China’s National Development and Reform Commission said it would raise gasoline and diesel prices by Rmb300 (US$47.50) per metric ton, effective midnight Wednesday, representing an increase of 3.3% and 3.6% over the current average gasoline and diesel retail ceiling benchmarks of Rmb9,080 and Rmb8,230, respectively, according to Dow Jones Newswires calculations. The NDRC last changed gasoline and diesel prices on 9 Oct, cutting them by Rmb300 per ton, in response to declining international oil prices. (WSJ)

China’s leading index for Dec eased 0.1% mom to 100.25 (100.33 in Nov). (Bloomberg)

Japanese Finance Ministry data showed Japan conducted ¥1.02tr (US$13.3bn) worth of unannounced intervention during the first four days of Nov, after selling a record ¥8.07tr on 31 Oct, when the yen climbed to a post-World War II high of 75.35 against the USD. (Bloomberg)

The HSBC Business Activity Index for India’s services sector bounced to 58 in Jan from 54.2 in Dec. (Reuters)

Thailand’s foreign reserves rose to US$178.4bn in the week ending 27 Jan, from US$176.2bn the previous week. (Bloomberg)

Bank Indonesia’s Business Survey showed production capacity utilisation rose in 4Q11 to 72.06% (74.22% in 3Q11, 71.31% in 4Q10). (Bloomberg)

Retail sales in Indonesia rose 22.2% yoy in Dec (26.8% in Nov). (Bloomberg)

Indonesia’s GDP growth rose 6.5% yoy in 4Q (unchanged in 3Q), meeting expectations to take full year 2011 growth to 6.5% (6.2% in 2010). (Reuters)

Indonesia’s power prices will surge by an average of 10% from Apr under a government plan to ease the budget deficit. Widjajono Partowidagdo, the deputy energy minister, said the proposed increase could save up to Rp8.9tr (US$997m) in electricity subsidy costs. (Jakarta Globe)

Indonesia’s foreign reserves in Jan increased to US$111.99bn (US$110.12bn in Dec). (Bloomberg)

The Philippine central bank will release about PP100bn (US$2.35bn) into the financial system when a 3% pt cut in banks' required reserves to 18% takes effect in Apr, but the move should not be inflationary, a senior official said. (Reuters)

The consumer-price index in the Philippines rose 3.9% yoy in Jan (4.2% in Dec), lower than the 4% expected by economists. (WSJ, Bloomberg)

The Philippines’ foreign reserves in Jan increased to US$77bn (US$75.3bn in Dec). (Bloomberg)

Taiwan: Exports fell in January for the first time since 2009

Taiwan’s exports fell for the first time in more than two years in January, giving the central bank more reason to extend an interest-rate pause and support growth. Shipments abroad declined 16.8% from a year earlier, compared with a 0.6% gain in Dec, the Ministry of Finance said in Taipei. Taiwan slipped into a recession last quarter as Europe’s debt crisis slowed global demand, and the central bank has refrained from raising borrowing costs in the past two policy meetings after five previous rate increases. The government predicts economic growth will decelerate to 3.91% in 2012. [Bloomberg]

South Korea: Set to follow Australia’s rate pause as US revives
South Korea will probably follow Australia’s lead and refrain from cutting interest rates tomorrow as the global economy shows signs of strength and officials highlight price pressures. The Bank of Korea will keep the benchmark seven-day repurchase rate unchanged at 3.25% according to 18 of 19 economists in a Bloomberg News survey. US growth, “robust” indicators from China and progress in taming Europe’s debt crisis encouraged Australian policy makers to keep rates on hold, the central bank indicated. [Bloomberg]

EU: Greek haggling drags on as meeting to seal bailout delayed
Greek Prime Minister Lucas Papademos postponed a meeting with heads of the political parties supporting his caretaker government a second time in as many days as the government and international creditors haggled over terms to secure a second aid package. Papademos will meet with the leaders in Athens tomorrow, instead of tonight as previously scheduled. Instead, he will meet tonight with the so- called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches to terms required for a EUR130bn (USD172bn) rescue package, the spokeswoman said. [Bloomberg]

US: Bernanke reiterates us labor market ‘long way’ from normal
Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on lawmakers to reduce the long-term budget deficit. The jobless rate unexpectedly fell to 8.3% in Jan, a government report showed. Bernanke’s testimony indicated that his views on the health of the labor market haven’t changed, even though he didn’t refer to the Jan data. In response to a question, Bernanke said the unemployment rate of 8.3% understates the weakness of the labor market. He said it’s important to also look at other gauges of the labor market, including underemployment. [Bloomberg]

US Federal Reserve Chairman Ben Bernanke said the 8.3% Jan unemployment rate understates weakness in the US labour market “in some broad sense”, saying “it is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work. There are also a lot of people who are either out of the labour force because they don’t think they can find work” or in part- time jobs. He added that the Fed’s forecast for 2012 growth at 2.2-2.7% suggests the economy will grow fast enough to absorb new entrants into the workforce while “not making sharp improvements on the unemployment rate.” (Bloomberg)

US Federal Reserve Chairman Ben Bernanke renewed a pledge to prevent Europe's financial crisis from damaging the U.S. economy, saying "we are in frequent contact with European authorities, and we will continue to monitor the situation closely and take every available step to protect the US financial system and the economy.” (Reuters)

US Federal Reserve Chairman Ben Bernanke defended the Fed's policies against charges from Republican lawmakers they risked sparking inflation, saying the economy still needs plenty of support. "The basic reason for low long-term rates, which are also a feature of every other industrial economy, are low inflation, slow expected growth and the fact that the dollar is a safe haven," Bernanke said, adding that he was seeing signs that some of the factors dampening US business investment, including uncertainty surrounding European bank woes, might be waning. (Reuters)

Job openings in the US gained 258,000 or 8.3% mom, the biggest increase since Feb 2011, to 3.38m in Dec (3.12m in Nov), according to the Labor Department. In the 12 months ended in Dec, the economy created a net 1.4m jobs, representing 48.4m hires and 47m separations (Bloomberg)

Nonfarm payrolls jumped 243,000, the largest gain since Apr, according to the Labor Department, as factory jobs grew by the most in a year. Economists had expected a gain of 150,000. The jobless rate accordingly fell to 8.3% - the lowest since Feb 2009 - from 8.5% in Dec. (Reuters)

US employers announced 53,486 planned job cuts in Jan, the highest level in four months and is up 28% from 41,785 in Dec as retailers and financial firms cut jobs (12,426 and 7,611 jobs, respectively), according to Challenger, Gray & Christmas, Inc. On a yoy basis, the measure was 38.9% higher than the 38,519 layoffs announced in Jan 2011, although the report said that a surge in job cuts at the start of the year is not unusual with Jan being historically the heaviest month of cuts. (Reuters)

US factory orders rose 1.1% mom in Dec (a revised 2.2% in Nov), the second consecutive monthly rise, according to the Commerce Department. Economists had expected a gain of 1.5%. During the full year 2011, factory orders gained 12.1% after a 12.9% rise in 2010. (Reuters)

The Institute for Supply Management’s services index for the US rose to 56.8 in Jan, the highest level since Feb 2011, from a revised 53.0 in Dec. Economists had expected the index to hold steady at 53.0. The new orders index climbed to 59.4 from 54.6, though the prices paid measure edged up to 63.5 from 62.0. Employment in the services sector rose to the highest level in six years at 57.4 from 49.8 (Reuters)

The US Congressional Budget Office said it expects the Treasury Department to report a US$27bn deficit for Jan, versus a US$50bn deficit in Jan 2011. This budget gap will bring the total deficit for the first four months of fiscal 2012 to US$349bn, a decrease of about US$70bn from the same period of fiscal 2011. (Reuters)

US consumer credit rose US$19.3bn in Dec to US$2.5tr (US$20.4bn in Nov, a breakthrough gain), according to the US Federal Reserve. Economists had expected a gain of US$7bn. The back-to-back increase at the end of 2011 was the biggest since Oct-Nov 2001, with Dec marking the second month of significant gains for revolving credit (US$2.8bn in Dec following Nov’s US$5.6bn surge). (Bloomberg)

The US’ International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index climbed 1.8% in the week ended 4 Feb from the week before on a seasonally adjusted, comparable-store basis, rising for the second-straight week (0.1% in the prior week). On a year-on-year basis, the reading rose 3.5% (3.9% in the prior week). (Dow Jones)

The International Monetary Fund warned that an escalation of Europe's debt crisis could slash China's economic growth in half this year, and urged Beijing to prepare stimulus measures in response. "The global economy is at a precarious stage and downside risks have risen sharply," the IMF said, citing the possible deep crunch in the financial sector in Europe that would be felt around the globe. "Should such a tail risk of financial volatility emanating from Europe be realised, it would drag China's growth lower." (AFP)

India's government has revised down its economic growth forecast for the current fiscal year to 6.9% in the year to Mar, below the 7.25-7.75% range given by the government in its Dec 2011 forecast, new data from the statistics ministry showed. The government also expects manufacturing output to grow 3.9% this fiscal year compared with a 7.6% increase a year earlier. Farm output is expected to rise 2.5%, compared with 7.0%. (AFP)

The JPMorgan Investor Confidence Index for Singapore, taken every six months, stands at 86, the lowest since it was launched a year ago (121 in Jul 2011 and 134 in Dec 2010; index level of 100 is neutral, while 200 is extremely optimistic and zero is extremely pessimistic). The survey also found Singapore remained the favourite investment destination among the respondents over the next six months, followed by Asian regional markets and real estate as more investors shun the US and Europe due to perceived higher risks. (Reuters)

Singapore’s foreign reserves in Jan increased to US$245.49bn (US$237.74bn in Dec). (Bloomberg)

Australia's central bank held its cash rate steady at 4.25% on Tuesday, a surprise to many who had thought it would cut rates, though it did leave the door open to an easing if the economy weakened. (Reuters)

The tourism industry in Singapore posted strong growth in 2011 with tourism arrivals and spending reaching new highs of 13.2m and S$22.2bn respectively. (ST)

The IMF has cut its forecast for China's 2012 economic growth to 8.25% from the 9% projected in Sep, and it warned that exports would be a significant drag on expansion in the coming two years. (China Daily)

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