Friday, June 15, 2012

20120615 1147 Global Economy Related News.

The Bank of Thailand left the benchmark interest rate unchanged at 3.0% for a third straight meeting on easing inflationary pressures, but warned about risks to the global economy. (Reuters)

Thailand’s Commerce Ministry will announce a measure to curb prices of fast-food dishes at THB30-35 per dish in 38 provinces to clamp down on the cost of living. (The Nation)

Indonesia’s government has issued a new rule to exempt import duties for machinery and goods used in automobile production facilities in a bid to promote the implementation of low-cost green cars. (The Jakarta Post)

China: Could see more rate cuts, no stimulus package
The Chinese government could implement two more interest rate cuts and three more reserve ratio requirement cuts in the remainder of the year, a former planning official said. But China does not need another stimulus package like the one in 2008, which super-charged growth but left local governments saddled with debt, said Cao Wenlian, who was earlier deputy director of the finance department at the National Development and Reform Commission and is now deputy secretary general of the China Center for International Economic Exchange (CCIEE), a government think tank. (The Star)

EU: Merkel to tell G-20 Germany can't save global economy alone
Germany’s Chancellor Angela Merkel rejected quick solutions proposed to fix Europe's financial crisis such as joint debt sharing, saying Germany can't save the world economy alone and fellow G-20 countries must help. The debt crisis and Germany's role in stemming it will be the "central topic" at next week's G-20 summit in Mexico. "All eyes are on Germany, but we also know that Germany's power is not infinite. So our responsibility as Europe's largest economy is to deploy our strength credibly, so that we can be of full use to Europe," she said. (Bloomberg)

EU: Euro zone may tinker with Greek bailout terms after election
The euro zone will not tear up the main targets of Greece's bailout no matter who wins Sunday's elections, but it might consider giving a new government in Athens some leeway on how it reaches them, euro zone officials said. Even that offer would depend on a government being in place that was prepared to stick to the prescribed austerity path and some policymakers are reluctant to go even that far. If Greece rejects the bailout deal it struck in February, all bets would be off and pressure would grow on it to quit the currency bloc. (Reuters)

Spain: Credit rating almost junk
Spain faced mounting pressure yesterday to bolster confidence in its financial system just days after accepting a EUR100bn plan to rescue its banks. Prime Minister Mariano Rajoy called for greater European fiscal and banking integration to save his country and the 17-nation euro, following Moody's move to slash the government's credit rating by three notches to just above junk status while also putting it on review for another possible downgrade in the coming months. (Bloomberg)

UK: King says stimulus case growing as BOE steps up crisis response
BOE Governor Mervyn King said more economic stimulus may be needed to counter the "black cloud of uncertainty" from the euro crisis, and a new plan to spur bank lending may be in place in a few weeks. "With signs of deterioration in the outlook, especially in world markets, the case for a further monetary easing is growing," King said. (Bloomberg)

EU: Spain, Cyprus have not sought aid
Neither Spain nor Cyprus has asked for financial assistance from IMF, IMF spokesman Gerry Rice said. Nonetheless, an IMF mission is in Spain as part of its annual assessment of the Spanish economy. The mission is expected to release its findings today. (MarketWatch)

The US’ Aaa credit ranking from Moody’s is unlikely to change this year amid the presidential election and potential for a wave of tax increases and spending cuts to take effect, according to Moody’s senior credit officer Steven Hess. (Bloomberg)

US business inventories rose 0.4% mom in Apr (0.3% in Mar), more than consensus of 0.3%. (Bloomberg)

US: Consumer prices fell in May by most in three years
The cost of living in US fell in May by the most in more than three years as fuel prices retreated, buttressing Federal Reserve projections that cheaper commodities will help reduce inflation. The consumer-price index declined 0.3% marking the biggest drop since Dec 2008, after no change the prior month. The core measure, which excludes more volatile food and energy costs, increased 0.2% for a third month. (Bloomberg)

US: Jobless claims rise by 6,000
The number of people filing initial applications for unemployment benefits rose last week by 6,000 to 386,000. The rolling four-week average of jobless claims climbed by 3,500 to 382,000, the highest level since late April. The ranks of people receiving state unemployment benefits dropped 33,000 to 3.28m during the week that ended 2 June. (Bloomberg)

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