The Bank of Thailand said that inflation is under control despite oil price spikes. Even if oil prices hit US$140/bbl, both core and headline inflation would be within target ranges, as every 10% increase in oil prices would raise the CPI by 0.3-0.4% pt. (The Nation)
Chinese Premier Wen Jiabao iterated that the renminbi exchange rate “is close to reaching an equilibrium level,” and as such, the government “will press ahead with reforms of the renminbi exchange-rate mechanism.” (AFP)
China is easing restrictions on lending capacity at three of the nation’s four biggest banks after new loans dropped to a four-year low, officials at the banks with knowledge of the matter said, with lenders to be permitted to use more of their deposits to make loans. (Bloomberg)
China's power consumption rose 6.7% yoy to 749.7bn kwh in the first two months, lower than 11.7% growth for the entire of last year. (Xinhua)
Standard & Poor’s projects China's real GDP growth at 8.3% in 2012, and expects to see a bigger role of small and medium-sized enterprises (SMEs) in boosting the economy. The official projection stands at 7.5%. (The Nation)
South Korea’s unemployment rate rose to 4.2% in Feb, an 11-month high, from 3.5% in Jan on account of declining job creation and the graduation of university students who are categorised as jobless. (AFP)
Japan’s industrial output for Jan was revised down slightly to 1.9% mom from the previous estimate of 2.0% (a revised 3.8% in Dec). (AFP)
The Japanese business survey index of sentiment at large manufacturers stood at -7.3 in Jan-Mar, compared with -6.1 in Oct-Dec, according to the joint survey by the Ministry of Finance and the Economic and Social Research Institute. (Reuters)
India’s wholesale price index rose 6.95% yoy in Feb (6.55% in Jan), government data showed. The reading overshot economists’ median estimate of 6.75%. (WSJ)
Euro: Italy keeps sales at short end even as returns soar
Italy is shunning sales of longer- maturity bonds even as they offer investors the best returns in the world. The longest-dated securities Italy has issued since 1 Jan are due in 2022, sooner than the 2026 and 2040 bonds sold in the first quarter of last year. It has increased offerings of debt maturing in less than two years to take advantage of demand bolstered by three-year loans from the European Central Bank to help quell the European sovereign-debt crisis. The yield difference between two-year notes and 30-year bonds widened last week to a more than 2.5-year high of 392 basis points. (Bloomberg)
Euro: Dutch austerity demands risk backfiring on Premier
Dutch Prime Minister Mark Rutte’s demand for budget cuts in debt-laden southern Europe may backfire as the leader of one of the four remaining AAA euro countries struggles to narrow a bigger-than-planned deficit. His coalition must find EUR9bn (USD11.8bn) in budget cuts this year, equal to 1.5% of the nation’s gross domestic product, to meet European rules and protect the top credit grade that France and Austria lost in January. Rutte, who led demands that Greece deepen spending cuts and overhaul its economy in exchange for a rescue, is squeezed by mounting domestic dissent and a campaign by nationalist leader Geert Wilders to exit the euro. (Bloomberg)
German Chancellor Angela Merkel said that European efforts to resolve the debt crisis are bringing the eurozone “a good way along the mountain path,” albeit “not completely over the mountain” as “imbalances” in euro-area economies show that the task is far from complete. (Bloomberg)
UK: Fitch puts UK debt on negative outlook days away from budget
Fitch Ratings said Britain risks losing its top investment grade because of its limited ability to deal with shocks, days before Chancellor of the Exchequer George Osborne will present his annual budget. Fitch changed the outlook on Britain to “negative” from “stable,” indicating a “slightly greater” than 50% chance that the AAA rating will be reduced within two years, the company said in a statement in London yesterday, citing the weak economic recovery, high debt levels and threats from Europe’s debt crisis. Osborne will meet coalition partners later this week to agree on a budget he will present on 21 March. (Bloomberg)
UK: Unemployment rose more than forecast in February
UK jobless claims rose more than economists forecast in February and a broader measure of unemployment remained at the highest rate in 16 years, underscoring the weakness of the labor market even as the economy shows some signs of recovery. Unemployment-benefit claims climbed by 7,200 from January to 1.612m, a 12th straight monthly increase, the Office for National Statistics said today in London. The median forecast of 28 economists in a Bloomberg News Survey was for a gain of 5,000. Unemployment measured by International Labour Organization methods held at 8.4% in the three months through January, the highest since 1995. (Bloomberg)
US: Bernanke says ‘frustratingly slow’ US growth impedes lending
Federal Reserve Chairman Ben S. Bernanke said the weak US economy impedes efforts by banks to make profitable loans. “Despite some recent signs of improvement, the recovery has been frustratingly slow, constraining opportunities for profitable lending,” Bernanke said. The Federal Open Market Committee added yesterday that economic conditions would still warrant holding the benchmark interest rate near zero at least through late 2014. Community banks are “facing difficult challenges,” Bernanke said. “Their close ties to local economies are, on balance, a source of strength, but a drawback of those ties is that the fortunes of communities and their banks tend to rise and fall together.” (Bloomberg)
US: Growth in US to strengthen as jobs lift consumers
The world’s largest economy will strengthen through 2012 as employment gains give Americans the means to withstand rising fuel costs, according to economists surveyed by Bloomberg News. Gross domestic product will climb at a 2.5% annual rate in the final three months of the year, up from 2% this quarter, according to the median forecast of 71 economists surveyed from 9 to 13 March. For all of 2012, the US may expand 2.2%, accelerating from 1.7% last year. More jobs, increasing share prices, improving confidence and stability in housing will bolster the expansion. At the same time, unemployment will be slow to retreat, averaging 7.3% in 2014, showing why Federal Reserve policy makers yesterday said interest rates will remain low for at least the next two years. (Bloomberg)
The US current account deficit totalled US$124.1bn in 4Q11 (a revised US$107.6bn in 3Q11), with the goods & services deficit deepening in the quarter while the surplus on investment income fell back. The measure was thus 3.24% of GDP in the quarter (2.84% in 3Q11). For 2011 as a whole, the deficit increased but only slightly to US$473.3bn from US$470.9bn in 2010. (Bloomberg)
US export prices rose 0.4% mom in Feb (a revised 0.2% in Jan), exceeding consensus of 0.3%, whilst import prices rose 0.4% mom (a revised 0.0% in Jan), falling short of consensus of 0.6%. (Bloomberg)
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