20120406 0948 Global Economy Related News.

The Federal Government's fiscal deficit is expected to dwindle to 4.7% of GDP this year, Deputy Finance Minister Donald Lim Siang Chai told the Dewan Rakyat yesterday. It was a reasonable target given the Federal Government's prudent spending and increasing revenue, he said. Fiscal consolidation efforts will be continued to bring down the fiscal deficit to less than 3% in 2015 as was pronounced in the 10th Malaysia Plan, he said. (Bernama)

China’s HSBC purchasing managers’ index for the services industry was 53.3 last month, compared with 53.9 in Feb. (Bloomberg)

China: Wen signals easing as yield drops to 11-month low
China’s one-year central-bank bill yield dropped to the lowest level in 11 months on speculation Premier Wen Jiabao will ease monetary policy to revive growth in Asia’s biggest economy. The yield declined 17bps last month to 3.31%, the fastest decline since Oct, compared with similar-maturity U.S. Treasuries that rose 1bps to 0.16%. Speculation that Wen will reduce banks’ reserve requirements or interest rates has increased since he said policy should be fine-tuned “as soon as possible” in comments reported 3 April by state media. [Bloomberg]

Taiwan: Inflation quickens, limiting scope for rate cuts
Taiwan’s consumer prices rose in March on costlier fuel, limiting the central bank’s scope to cut interest rates. The consumer-price index climbed 1.21% from a year earlier, compared with a revised 0.23% increase in Feb, the statistics bureau said in Taipei. Taiwan joined Asian nations including China and Vietnam in raising fuel prices this year as crude oil costs climbed. The island’s industrial output recovered in February for the first time in four months and exports rebounded, prompting the central bank to say it would focus on inflation after leaving borrowing costs unchanged for a third meeting on 22 March. [Bloomberg]


Japan passed a ¥90.3tr budget, with about half the spending expected to be financed by new bonds that will add to Japan's massive debt mountain. (AFP)

The upper house of Japan's parliament voted down the government's candidate, BNP Paribas Chief Economist Ryutaro Kono, for the central bank's interest-rate-setting policy board, looking instead for someone more supportive of further monetary easing. (WSJ)

Indonesia’s foreign reserves declined to US$110.5bn in Mar from US$112.2bn in Feb. (Bloomberg)

Indonesia’s government will launch market operations to contain inflationary pressure following the delayed rise in the prices of subsidized fuel oils that may increase the prices of commodities. (Antara News)

Thailand’s foreign reserves increased to US$179.2bn as at 30 Mar from US$170bn the previous week. (Bloomberg)

Thailand’s Mineral Fuels Department has put the opening of bidding for the 21st round of petroleum exploration concessions on hold for at least three months, as it wants to review details in regard to public information and participation. (The Nation)

Thailand’s natural gas production from domestic resources is expected to reach its peak next year to average between 3,600 and 4,000m cubic feet per day as new supplies come online. (Bangkok Post)

Thailand’s consumer confidence index decreased to 23 in Mar from 25.8 recorded in Feb due to concerns over the soaring living expenses among consumers. (Thai Financial Post)

UK: Manufacturing unexpectedly drops for second month
UK manufacturing output unexpectedly declined for a second month in Feb, indicating the economy’s return to growth may be uneven. Factory output fell 1% from Jan, the most since Apr last year, the Office for National Statistics said in London. Manufacturing, which accounts for 10% of the economy, was revised to a 0.3% decline in Jan from a 0.1% increase. Reports this week showed expansion in services, manufacturing and construction accelerated in March, suggesting the economy probably returned to growth in the first quarter. [Bloomberg]

EU: Monti labor market overhaul ready for parliamentary review
Prime Minister Mario Monti’s bill to overhaul the country’s labour market, his latest effort to spur Italy’s economic growth, will be sent to parliament today for review after President Giorgio Napolitano signed the draft law. Monti presented the bill yesterday after watering down some measures easing firing rules to secure support of his political allies in parliament. Mont backed away from his original goal of allowing companies to fire workers for economic reasons without fear of reinstatement, and in the draft labour courts will still have a limited right to reverse those dismissals. [Bloomberg]


ECB President Mario Draghi quashed talk of an early exit from emergency stimulus measures as Spain struggled to borrow in financial markets, a reminder of the risk that the region’s debt crisis could flare again. (Bloomberg)

US: Payroll gain in US probably exceeded 200,000 for fourth month
Employers probably added more than 200,000 workers to payrolls in March for a fourth straight month as US companies gained confidence that sales will keep improving, economists said before a government report. Hiring increased by 205,000 after rising by 227,000 in Feb, according to the median projection of 80 economists surveyed by Bloomberg News. The last time employment advanced at a similar pace for as many months was late 1999 into 2000. The jobless rate probably held at a three-year low of 8.3%. [Bloomberg]

US: New York Fed Markets Group Chief Brian Sack to resign
Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations in implementing the central bank’s monetary policy since June 2009. Sack, 41, will remain at his current post until 29 June, the district bank said in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective 14 Sept, according to the statement. As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. [Bloomberg]


The Federal Reserve took steps to encourage US banks to turn more foreclosed homes into rental properties in new policy guidelines issued that could help lessen the flood of distressed property sales that is depressing prices. (Reuters)

Data from Challenger showed US employers announced fewer job cuts as planned firing declined 8.8% yoy in Mar to a 10 month low of 37,880. (FT)

US President Barack Obama on Thursday signed into law a measure meant to create jobs by helping small firms raise capital. Obama and other lawmakers signed the Jumpstart Our Business Startups (JOBS) Act at the White House. (Channel News Asia)

US comparable chain store sales rose 4.1% yoy in Mar, unchanged from Feb. (Reuters)