Asian Stocks Swings Between Gain, Losses as Metals Rise (Source: Bloomberg)
Asian stocks swung between gains and losses, with the regional benchmark index trading near its lowest level in more than two months, as materials producers rose on higher metal prices, countering declines among South Korean shares. Alumina Ltd. (AWC), partner in the world’s biggest producer of the material used to make alumina, added 2.5 percent in Sydney after Alcoa Inc., the largest U.S. aluminum producer, reported an unexpected first-quarter profit. Fanuc Corp., a maker of production automation systems, after Citigroup Inc. upgraded global industrial stocks to overweight and maintained a buy rating on the Japanese company. South Korean shares dropped as North Korea prepared to test a long-range rocket and Samsung Electronics Co. (005930), which supplies touch screens to Nokia OYJ, fell after the Finnish company reported a software fault with its latest model.
“Overall, clearly the U.S. economy is improving. The question is whether we are reading too much into a better-than- expected Alcoa result,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. The MSCI Asia Pacific Index climbed 0.1 percent to 123.16 as of 10:41 a.m. in Tokyo after falling as much as 0.2 percent. The measure slid 0.7 percent yesterday, falling for a sixth straight day.
U.S. Stocks Halt Five-Day Decline After Alcoa’s Results (Source: Bloomberg)
U.S. stocks advanced, halting a five-day decline for the Standard & Poor’s 500 Index, after Alcoa (AA) Inc. reported an unexpected first-quarter profit. Alcoa, the first company in the Dow Jones Industrial Average to announce quarterly results, climbed 6.2 percent. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) added at least 2.4 percent to pace gains in financial shares. A measure of 11 homebuilders in S&P indexes jumped 4.8 percent as Wells Fargo & Co. said a survey of sales managers showed 63 percent of the respondents reported better-than-expected orders. The S&P 500 increased 0.7 percent to 1,368.71 at 4 p.m. New York time, after dropping 4.3 percent over the past five days. The Dow advanced 89.46 points, or 0.7 percent, to 12,805.39 today. The Russell 2000 Index (RTY) of small companies climbed 1.6 percent to 796.59. About 6.4 billion shares changed hands on U.S. exchanges today, 6.5 percent less than the three-month average and 23 percent below yesterday’s volume.
“Alcoa helped dampen the dark mood in the market,” said Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. “It’s always nice to see the first company out of the box with an earnings surprise. It’s time to see how this progresses and reassess when to put some money back in.”
European Stocks Rebound; Banks and Carmakers Lead Gains (Source: Bloomberg)
European stocks gained, rebounding from a two-month low, as banks and automakers advanced and Spain’s prime minister said the country wouldn’t need a bailout. Deutsche Bank AG was among stocks leading banks higher. Volkswagen AG (VOW) rose 3 percent. Aluminum producer Norsk Hydro ASA (NHY) rose 2.2 percent. Nokia Oyj (NOK1V) tumbled 14 percent after it lowered the first-quarter outlook for its handset division. The Stoxx Europe 600 Index gained 0.7 percent to 254.43 at the close in London. European stocks tumbled 2.5 percent yesterday to their lowest level since Jan. 30, amid mounting concern about the region’s debt crisis and as a U.S. report showed employers in the world’s largest economy added fewer jobs in March than forecast.
“Fundamentally, the equity market offers extreme value and I am very happy to be buying on the dips,” said George Godber, who helps oversee $22 billion as a fund manager at Charles Stanley’s Matterley division in London. His Matterley Undervalued Assets Fund rose 12 percent in 2012. “Equities are the only place to be.”
Japan Stocks Snap Longest Loss Streak Since ‘09 (Source: Bloomberg)
April 12 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) snapping its longest losing streak since 2009, as optimism about U.S. corporate earnings and a drop in Spanish bond yields boosted demand for riskier assets. Automaker Mazda Motor Corp., which gets 27 percent of its revenue in North America, gained 1.5 percent after falling four consecutive days. Hitachi Construction Machinery Corp. paced gains among machinery makers after a newspaper reported the firm may have an 80 billion yen operating profit for the year ending in March. Inpex Corp. (1662), Japan’s No. 1 energy explorer, advanced 0.2 percent after oil rose. The Nikkei 225 Stock Average gained 0.2 percent to 9,475.27 as of 9:22 a.m. in Tokyo, advancing for the first time in eight days, the longest run of losses since July 2009. The broader Topix Index gained 0.1 percent to 806.75 with about two shares advancing for each that slid.
“Today we will see a little bit of rebound after five or so days of negative market activity, but there are significant headwinds on the horizon,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Overall, clearly the U.S. economy is improving. The question is whether we are reading too much into a better-than- expected Alcoa result.”
China’s Stock Futures Rise on Prospect of Monetary Policy Easing (Source: Bloomberg)
China’s stock-index futures rose on speculation the government will loosen monetary policy to boost growth as a report tomorrow may show the economy grew the least in three years. Futures on the CSI 300 Index (SHSZ300) expiring in April, the most active contract, gained 0.4 percent to 2,525 as of 9:15 a.m. local time. SAIC Motor Corp. (600104) may lead gains for automakers after an industry report showed the nation’s car sales exceeded analysts’ estimates. China Vanke Co. (000002) and Poly Real Estate Group Co., China’s biggest developers, may drop on a newspaper report the southern province of Guangdong may impose property taxes. “The market is waiting for tomorrow’s data, which may definitely show the economy is slowing down,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “However, that may justify the government taking measures such as a cut in interest rates to boost growth.”
The Shanghai Composite Index (SHCOMP) climbed 3.06 points, or 0.1 percent, to 2,308.93 yesterday. The CSI 300 Index rose less than 0.1 percent to 2,520.04. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 1.8 percent in New York.
Dollar Remains Lower; Yellen Endorses Accomodative Policy (Source: Bloomberg)
The dollar remained lower against most of its 16 major counterparts after Federal Reserve Vice Chairman Janet Yellen endorsed the central bank’s “highly accommodative” policy. The euro was 0.1 percent from a three-month low against the U.K. pound before Italy sells bonds today. Australia’s dollar advanced before the country releases employment data. “The market may start pricing in additional Fed easing,” weighing on the dollar, said Shinji Kureda, New York-based vice president of the trading department at Sumitomo Mitsui Banking Corp. “The Fed doves are likely to become dominant again as it gets clearer that the U.S. economy is losing momentum.” The dollar was little changed at $1.3115 per euro as of 9:53 a.m. in Tokyo from the close in New York yesterday, when it lost 0.2 percent. The greenback fetched 81.02 yen from 80.86. The 17-nation euro fell 0.1 percent to 82.37 U.K. pence after touching 82.30 on April 9, the lowest since Jan. 9.
FOREX-Yen buoyed near multi-week high as risk aversion climbs
SYDNEY/TOKYO, April 11 (Reuters) - The yen hovered at multi-week highs against many currencies in Asia on Wednesday, while the Australian dollar floundered as worries about global growth took another bite at risk sentiment.
A jump in Spanish bond yields exacerbated concerns about the fragility of peripheral euro zone economies, while disappointing imports from China kept alive worries about a hard economic landing in the world's second-biggest economy.
Treasuries Snap Decline as Italy to Test Euro Debt Demand (Source: Bloomberg)
Treasuries snapped a decline from yesterday as investors sought the relative safety of U.S. debt before Italy sells as much as 5 billion euros ($6.6 billion) of bonds today. Spanish 10-year yields surged as high as 6 percent yesterday, approaching the levels that pushed Greece, Ireland and Portugal into bailouts, and the extra yield over German bunds held above 400 basis points. Italy’s auctions today will be a test of appetite for bonds from the euro region’s most indebted nations. The U.S. is scheduled to auction $13 billion of 30-year bonds today. “Treasuries are being driven by the flight to quality from Europe,” said Tomohisa Fujiki, a rate strategist at BNP Paribas Securities Japan Ltd. in Tokyo. The company’s U.S. arm is one of the 21 primary dealers that are required to bid at the government debt auctions.
U.S. 10-year yields fell two basis points, or 0.02 percentage point, to 2.02 percent as of 10:05 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in February 2022 rose 1/8, or $1.25 per $1,000 face amount, to 99 26/32. The rate increased five basis points, or 0.05 percentage points, yesterday.
Asia Inflation Risk May Check Easing (Source: Bloomberg)
Asian nations from South Korea to Singapore may refrain from monetary easing this week as rising oil prices add to inflation risks, even as pressure mounts on Japan to add stimulus and China grapples with slowing expansion. Indonesia (IDBIRATE) will keep interest rates unchanged for a second month tomorrow, and South Korea and Pakistan will follow a day later, according to Bloomberg News surveys. Singapore, which uses its exchange rate to manage inflation, is forecast by economists to maintain its policy stance on April 13, when the government is predicted to report a rebound in growth. Crude oil has risen 18 percent in the past six months, forcing Asian governments to raise fuel prices and limiting policy options for central banks in the world’s fastest growing region. Developing Asia can refrain from further monetary and fiscal stimulus because expansion will remain robust, while spikes in energy costs can revive the threat of inflation, the Asian Development Bank said in a report today.
“Economic momentum is steadily improving, so there is no scope for further monetary accommodation,” said Wai Ho Leong, a senior regional economist at Barclays Capital in Singapore. “The focus of policy is to anchor inflation expectations.”
IMF Said Ready to Cut China Current-Account Surplus Forecast (Source: Bloomberg)
The International Monetary Fund is set to lower its forecasts for China’s medium-term current- account surplus, according to two officials who have seen the draft report. The Washington-based IMF in September estimated surpluses of more than 7 percent of gross domestic product for 2015 and 2016. The new forecasts for the broadest measure of trade will be published April 17 in the IMF’s World Economic Outlook, according to the officials, who spoke on condition they wouldn’t be named because the figures haven’t been made public. China, the world’s second-largest economy, amassed $3.18 trillion of foreign reserves at the end of last year, provoking accusations from U.S. lawmakers that it was keeping its currency weak to promote exports. The lowered forecasts for China’s current account may reduce pressure on the nation to allow its currency to appreciate, said Eswar Prasad, a former head of the China division at the IMF.
The new IMF outlook “definitely implies that the estimates of under-evaluation are going to be reduced,” said Prasad, a senior fellow at the Brookings Institution in Washington. “The big question is whether” it will be “enough to eliminate the sense of substantial undervaluation,” he said.
Fed Says Economy Grew at ‘Modest to Moderate’ Pace (Source: Bloomberg)
The Federal Reserve said the economy grew in all 12 of its regions as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices. “The economy continued to expand at a modest to moderate pace from mid-February through late March,” the Fed said today in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. “Hiring was steady or showed a modest increase across many districts.” The Beige Book offers anecdotal evidence helping policy makers assess an economy that added 120,000 jobs in March, the fewest since October. Fed Chairman Ben S. Bernanke last month said that further “significant” improvements in the unemployment rate would probably require a more-rapid expansion. A “recent decline” in unemployment may reflect “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” Bernanke said on March 26.
Unemployment Falls Fast in U.S. If Men Get College Degree (Source: Bloomberg)
After serving time in a Virginia prison following convictions on gun and drug-possession charges, Sean Collins-Harris decided he would fight the odds against his ever returning to white-collar work with the only tool he had: education. “I refused to believe that I was going to be confined to a blue-collar world,” Collins-Harris, 28, says. “If they didn’t open the door for me, I would open my own. If I had a proper education, and learned how to be an organizational leader, I could start my own company; I could do my own thing.” Today, Collins-Harris has a master’s degree and works for a property-management company in Virginia Beach. It took a personal crash that landed him inside St. Brides Correctional Center in Chesapeake, Virginia, where he says he buffed floors for 27 cents an hour, for Collins-Harris to understand what so many young American men don’t.
The U.S. workplace is polarizing between the education haves and have-nots, says David Autor, professor of economics at Massachusetts Institute of Technology in Cambridge. So-called middle-skill jobs, typically well-paying work that doesn’t require extensive higher education, are vanishing, dividing the labor force into high- and low-skill positions. While women are moving up the knowledge ladder, male educational attainment is growing at a slower rate.
Mid-Incomers Suffer in Polarized U.S. Job Market: Economy (Source: Bloomberg)
Americans at the top and bottom of the income scale are benefiting most from the jobs recovery while those in the middle are getting left behind. Employees making above-average wages, like doctors and energy-industry workers, and those at the other extreme, including home-health aides and restaurant staff, have seen outsized gains in hiring since the jobs recovery began in February 2010, say economists at Wells Fargo & Co. and JPMorgan Chase & Co. Professions in the middle, such as financial services and specialty construction, aren’t faring as well. Such a shortfall helps explain why income gains have yet to return to levels seen before the recession began and why consumer spending over the past two years has grown at the slowest pace of any expansion in the post-World War II era. It also points to a pool of unemployed Americans that will prevent wage increases from flaring out of control and fueling inflation as the economy grows.
“If we’re only creating jobs for the highly skilled and for folks with basic skills, then you’re leaving an awful lot of people behind,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. “Until we have broad-based growth, it’s hard to imagine how we can have a self-sustaining economic recovery.”
U.S. Import Prices Jumped 1.3% in March on Fuel, Materials (Source: Bloomberg)
Prices of goods imported into the U.S. rose more than forecast in March, reflecting higher costs for fuel and industrial materials such as metals. The 1.3 percent gain in the import-price index was the biggest since April 2011 and followed a revised 0.1 percent drop in February that was previously reported as an increase, Labor Department figures showed today in Washington. Economists projected the March gauge would increase 0.8 percent, according to the median forecast in a Bloomberg News survey. Prices excluding fuel climbed 0.5 percent, also the most in 11 months. Even with the jump from a month earlier, import prices over the last year posted the smallest gain since November 2009, indicating slower global growth may help temper inflation pressures. Federal Reserve policy makers said last month that higher fuel prices will prove temporary, allowing them to stick to plans to keep interest rates low at least until late 2014.
“Given what’s been driving import prices, which is the oil component, you’re likely to see a slight moderation or even greater moderation going forward,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC in New York, who correctly forecast the March figure. “Import prices were certainly a problem for businesses in the last three months, but we’ve seen those pressures ease.”
Yellen Says Jobs Outlook Warrants Accommodative Policy (Source: Bloomberg)
Federal Reserve Vice Chairman Janet Yellen endorsed the Fed’s “highly accommodative” policy, saying central bankers probably won’t achieve their goal of full employment for years while inflation remains in check. “Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective, and I expect inflation to remain at or below” the Fed’s 2 percent target, Yellen said today in a speech in New York. She said housing and the European debt crisis are among “significant headwinds” that may restrain growth. The policy-setting Federal Open Market Committee last month maintained its view that interest rates are likely to stay low through at least late 2014. Central bankers called for more easing only “if the economy lost momentum” or if inflation stays below their 2 percent inflation target, according to the minutes of their March 13 meeting.
“Considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information,” she said. Further easing “could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.”
Bo Xilai Ouster May Calm China Passage to Slower Economic Growth (Source: Bloomberg)
Bo Xilai’s downfall and the arrest of his wife on suspicion of murdering a U.K. citizen may have a stabilizing influence on China’s economy by unifying the ruling Communist Party before a once-in-a-decade leadership transition. The party on April 10 suspended Bo from the ruling Politburo, saying he was suspected of committing “serious discipline violations,” China’s official Xinhua News Agency reported. His wife, Gu Kailai, and an aide were put in custody for suspicion of murdering British businessman Neil Heywood, Xinhua reported separately. Bo’s removal may foster more stability in the world’s second-biggest economy ahead of the 18th Communist Party Congress, said Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co. The congress later this year will pick a new party head and Politburo. Bo, 62, threatened to upset China’s consensus-dependent leadership if he remained in the inner circle, said Jonathan Fenby, China director of the U.K. investment-research service Trusted Sources.
“It paves the way for the new leadership ahead with more stability,” Wan said in a phone interview in Hong Kong yesterday. China Merchants Securities oversees about $1.5 billion in assets.
Solars Drive Biggest Jump in a Month on Easing: China Overnight (Source: Bloomberg)
Chinese stocks traded in the U.S. rallied the most in a month, led by solar companies, on speculation evidence showing the economy continues to slow will prompt more monetary easing. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese stocks in the U.S. added 1.8 percent to 101.22 yesterday in New York, the biggest advance since March 13. Solar company Suntech Power Holdings Co. (STP) was the biggest gainer on the gauge as Satcon Technology Corp., a maker inverters that connect renewable energy to electricity grids, said bookings surged 130 percent in the first quarter from the last three months of 2011. Casino operator Melco Crown Entertainment Ltd. (6883) erased its biggest discount to its Hong Kong stock in a month as Goldman Sachs Group Inc. upgraded the shares to buy.
Official data due tomorrow will show China’s economy expanded 8.4 percent in the first quarter, the slowest pace since 2009, according to the median of 41 economists’ estimates compiled by Bloomberg. Policy makers have cut the amount banks must keep in reserves twice since November to free up cash for lending, in a bid to insulate the world’s second-largest economy from the effects of a global slowdown. Interest rates have been kept at the highest level since 2008 since July.
China’s Growth May Have Slowed Ahead of Wen Revival (Source: Bloomberg)
China’s economy probably expanded at the slowest pace in almost three years in the first quarter, setting the stage for monetary loosening and aid to exporters to drive a rebound and fuel global growth. Gross domestic product rose 8.4 percent from a year earlier following an 8.9 percent increase in the fourth quarter, according to the median estimate of 41 economists surveyed by Bloomberg News ahead of a report tomorrow. The data may also show that industrial production and retail sales accelerated in March while spending on fixed assets slowed. Australia & New Zealand Banking Group Ltd. and HSBC Holdings Plc predict the world’s second-largest economy will pick up this quarter as Premier Wen Jiabao cuts banks’ required reserves and directs funds to infrastructure projects and smaller companies. That would help a global expansion clouded by U.S. job gains that trailed forecasts in March and renewed concern over Europe’s sovereign-debt crisis.
“China’s slowdown is at the end of the tunnel as growth is going to start picking up pace,” said Liu Li-Gang, chief Greater China economist at ANZ in Hong Kong, who previously worked at the World Bank. “A rebound in growth starting this quarter will be a stabilizer for the world recovery as Wen’s measures boost loan growth, offsetting weaker property sales and related consumption.”
Japanese Investors Shun Spain as Crisis Resurfaces (Source: Bloomberg)
Japan’s biggest investors, with $368 billion under management, say it’s too early to buy bonds from Europe’s most indebted nations as rising Spanish yields spark concern the region’s fiscal crisis has further to run. Kokusai Asset Management Co., which runs Asia’s largest mutual fund, Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest publicly traded bank, and Diam Co., part of the nation’s second-biggest life insurer, are all shunning Spanish debt. Japanese investors sold a net $43.8 billion of euro- denominated bonds in the 12 months ended Feb. 29, according to figures from the Ministry of Finance in Tokyo. “I’m not planning to add Spanish or Italian bonds anytime soon,” said Masataka Horii, who runs the $21.2 billion Kokusai Global Sovereign Open Fund (1131197C) in Tokyo. “The European crisis is moving toward a resolution, but that doesn’t mean the issue is fully solved. It’s not time yet to increase euros.”
The rate on 10-year Spanish bonds rose almost 1 percentage point in the past month, reaching 5.92 percent at 8:26 a.m. London time today. Yields on similar-maturity Italian debt advanced 69 basis points to 5.61 percent in the period.
Japan Machinery Orders Unexpectedly Rise (Source: Bloomberg)
Japan’s machinery orders exceeded all economists’ estimates in February, signaling gains in capital spending that may help to sustain a recovery in the world’s third-biggest economy. Bookings (JNMOCHNG) increased 4.8 percent, the most since November, after rising 3.4 percent the previous month, a Cabinet Office report showed in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a 0.8 percent decline. Earthquake reconstruction may help the economy maintain momentum after a contraction in three of the past four years and as manufacturers forecast a strengthening yen that will limit exporters’ profits. The Bank of Japan yesterday held off from adding stimulus even as some lawmakers urge more aggressive easing to end deflation and spur growth.
“Today’s report points to a gradual recovery in capital spending,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. “Japan’s economy should have returned to growth in the first quarter and the expansion may continue this quarter.”
S. Korea Ruling Party Wins Majority Ahead of North Launch (Source: Bloomberg)
South Korea’s ruling party retained control of parliament in a boost to President Lee Myung Bak ahead of a North Korean rocket launch that may take place as early as today. Lee’s New Frontier Party won 152 of the 300 seats in the National Assembly while the main opposition Democratic United Party secured 127 and the smaller United Progress Party took 13, the election commission said on its website. The remaining eight seats are held by a minor party and independents. The victory may give NFP chief Park Geun Hye, daughter of former President Park Chung Hee, momentum heading into the December presidential contest. Lee’s popularity has fallen by half since his single five-year term began in 2008 amid public discontent with rising inflation and slowing growth.
“The NFP’s continued parliamentary majority will protect Lee Myung Bak from an opposition eager to accelerate his lame duck phase and hasten the end of his rule,” said Park Won Ho, a professor of political science at Seoul National University. “Park Geun Hye has successfully distanced the party from the Lee administration’s failures, which will clearly boost her as a person fit to be a future president.”
Coeure Triggers Bets ECB Will Restart Bond Purchases for Spain (Source: Bloomberg)
European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond-purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again. Spanish “market conditions are not justified,” Coeure, who heads the ECB’s market operations division, said at an event in Paris today. “Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists.” The euro rose and Spanish bond yields declined as Coeure’s comments reassured investors that the ECB will act again if needed to stem the crisis. With Spain’s three-month-old government struggling to reduce the budget deficit and crack down on overspending by regional administrations, borrowing costs have surged, nearing the levels that precipitated bailouts for Greece, Portugal and Ireland.
“We expect a very significant intensification of the euro- area debt crisis to materialize this quarter as the market refocuses on the fundamentals and the fiscal challenges of each country,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London. “The ECB should be preparing itself” for “the return of significant financial market tensions.”
Rajoy Says Spain Future at Stake as Debt Crisis Persists (Source: Bloomberg)
Prime Minister Mariano Rajoy said Spain’s future is on the line in its battle to tame surging bond yields, as the head of the nation’s second-largest region proposed handing back powers to the government to cut costs. With Spanish bonds trading closer to levels that prompted Greece, Ireland and Portugal to seek European bailouts, Rajoy will address lawmakers of his People’s Party today to explain the deepest budget cuts in three decades. The prime minister will speak at 1 p.m. in Madrid. “Without a doubt, a good part of Spain’s future is at stake,” Rajoy told senators yesterday, as he urged regional governments to contribute to spending cuts. “The problem is that the markets can lend or decide not to lend.”
Rajoy has stepped up his rhetoric in the past week as he seeks to persuade Spaniards to accept spending reductions and tax increases as a less painful alternative to a bailout. His three-month-old government is struggling to convince investors it can reduce the deficit by a third this year and crack down on overspending by regional administrations.
Germany Grows Robust from Sick Man With Demand at Home (Source: Bloomberg)
Germany’s economic expansion is increasingly home-grown. Unemployment at a two-decade low, wages accelerating out of years of restraint and falling borrowing costs are spurring consumers in Europe’s linchpin economy to spend more. Showcased by rising property prices, that’s at odds with the rest of the euro area, where austerity and the bursting of debt-fueled asset bubbles are forcing households to cut back. Economists from HSBC Holdings Plc to BNP Paribas SA are responding by raising forecasts for German growth and declaring that domestic demand is emerging as a rival to exports as the economy’s driver. The rejuvenation may help strengthen and rebalance the rest of the euro area, even as it makes it tougher for the European Central Bank to set a one-size-fits-all monetary policy.
“Ten years ago, Germany was the ‘sick man of Europe,’” said Holger Schmieding, London-based chief economist at Berenberg Bank, Germany’s oldest bank. Now, “Germany will enjoy a golden decade of more growth and employment with a healthy fiscal balance.”
Investment surge expected for "gold mine" Myanmar - ADB
BANGKOK, April 10 (Reuters) - Myanmar's hermit economy could boom on an anticipated influx of foreign investment in a "gold mine" of opportunities once sanctions are lifted, the Asian Development Bank's country manager for Myanmar said on Tuesday.
Growth is expected to be 6 percent this fiscal year and 6.3 percent for 2013-2014, but that is likely to be surpassed if Western sanctions are undone and investment pours in to one of Asia's last remaining frontier markets, much through public private partnerships (PPP), said Craig Steffensen, the ADB's country manager for Myanmar and Thailand.
Baltic sea index flat on slack trade, capesizes up
April 10 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, was little changed on Tuesday as sluggish activity for smaller vessels offset an uptick in capesize rates.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, was steady at 928 points. The index has fallen more than 46 percent this year.
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