Thursday, July 26, 2012

20120726 1017 Global Economy Related News.

US new home sales fell to an annualised pace of 350,000 in Jun (a revised 382,000 in May), 20,000 shy of consensus. (Bloomberg)

US MBA purchase applications fell 3.0% wow in the 20 Jul week (-0.1% in the earlier week), whilst the refinance index gained 2.0% wow (22.0% in the prior week). (Bloomberg)

Chinese health officials called for additional reform of China's health-care system amid mounting costs, problems at public hospitals and a surge of patients with chronic diseases. (WSJ)

The IMF has formally declared that the Chinese renminbi is “moderately undervalued”, an important change in wording that will make it easier for Beijing to rebuff foreign criticism of its exchange rate regime. (FT)

China's economy will rebound in 2H12 after bottoming out in 2Q12 to achieve annual growth of 8% as government policies to spur growth take effect, the IMF said, whilst predicting that the economy would expand by 8.5% in 2013. (AFP)

China may refrain from stepping up its monetary stimulus or increasing spending because measures now in place are sufficient to support growth, IMF senior resident representative Il Houng Lee said. (Bloomberg)

Standard and Poor's expects banks in Brazil, Russia, India, and China (BRIC) to possibly come under pressure over the next 12-24 months, with the banks' ties with the government to underpin their credit profiles. (Reuters)

Bank of Japan Deputy Gov. Hirohide Yamaguchi said that the central bank is ready to loosen monetary policy further if Japan's economic recovery stalls or if downside risks increase. (WSJ)

Japan’s exports rose 1.5% yoy in 6M12, hurt by slowing global demand and a strong yen, whilst imports gained 7.4% amid rising fuel demand, resulting in a trade deficit of ¥2.9tr. However, for the month of Jun, the country posted an unexpected trade surplus of ¥61.7bn as imports fell 2.2% on lower oil prices whilst exports lost 2.3%. Analysts had expected a shortfall of ¥140bn. (BBC, Bloomberg)

A panel charged with outlining the Japanese government’s growth strategy has updated a final draft plan with a pledge to work with the Bank of Japan to combat deflation and the strong yen. (Bloomberg)

Euro-zone banks tightened their credit standards again in 2Q as the slowing economy and spreading debt crisis outweighed the effects of lending operations from the European Central Bank. Majority of banks continue to make credit more difficult by asking for higher margins on loans and, to a lesser extent, in asking borrowers for collateral, an ECB survey showed. (AWSJ)

Regional debts, soaring borrowing costs, a higher deficit and souring market sentiment are all making it nearly impossible for Spain to find €50bn in funding it needs by year end without external aid. (Reuters)

The European Commission proposed the possibility of criminal penalties, including jail time, for manipulating financial benchmarks such as the London interbank offered rate and said the financial industry's role in setting these benchmarks needs stronger public oversight. (WSJ)

Moody's downgraded the outlook for 17 German banks after a similar move against the government's credit rating earlier this week, noting that several of the banks held debt guaranteed by the German central or regional governments. (Bangkok Post)

Beleaguered Spain sought French support in the face of its soaring borrowing costs Wednesday as Europe's economic crisis deepened with a slump in German confidence and worsening British recession. (Bangkok Post)

Reserve Bank of Australia governor Glenn Stevens downplayed fears of a significant slowdown in key trading partner China, describing it as "cyclical" in an upbeat assessment of the domestic economy. (AFP)

The Monetary Authority of Singapore boosted its paid-up capital by S$8bn (RM20.16bn) and withheld contributions to government coffers earlier this year amid rising volatility in financial markets. It also revised its 2012 inflation forecast to 4-4.5% from 3.5-4.5%, although it saw core inflation moderating, indicating a possible loosening of its stance on the SGD at its next half-yearly review in Oct. (Reuters)

Indonesia's foreign direct investment rose 30.2% yoy to Rp56.1tr trillion (US$5.92bn) in 2Q. This compares to the 30.3% increase in 1Q mostly supported by investment in mining and base chemicals. Separately, the Indonesia Investment Coordinating Board (BKPM) said investments this year, which are expected to exceed the target, cannot directly cover the weakening of export activities. (IFT, Jakarta Globe)

Bank Indonesia projects inflation in July 2012 to reach 0.65-0.7% mom, higher than in June with 0.62%. Difi A Johansyah, Public Relations Director of Bank Indonesia, said inflation in July are prompted by, among others, the price increases of three commodities; corn, wheat and soybeans. (IFT)

The Bank of Thailand maintained the benchmark one-day repurchase rate at 3.00%, a decision widely expected, as the eurozone debt crisis remained the biggest threat to the country’s economic recovery. The Monetary Policy Committee also revised downward the 2012 economic growth projection from 6% to 5.7%, whilst anticipating export revenue to expand by only 7% this year, against 8% in the previous forecast. (The Nation)

Thailand’s Jun custom exports unexpectedly fell 2.5% yoy (+7.68% in May). That compares with the median forecast for a 4.5% increase. The Bank of Thailand cut its growth outlook for this year to 5.7% (from 6% previously) and for 2013 (to 5% from 5.4%). It lowered this year’s export outlook to 7% from 8% previously. (Bloomberg)

Thailand’s Cabinet has resolved to allow the Government Savings Bank to lend THB3.54bn to the Industrial Estate Authority of Thailand to help build flood-prevention systems around major industrial estates at risk of inundation. The loan comes with an interest rate of 0.01% per annum with a payback period of 15 years. (Thai Financial Post)

Philippine imports rose 10.1% yoy in May to US$5.386bn from US$4.893bn a year ago, following a 13.6% weakening in imports in Apr, the sharpest decline so far this year. (Business Inquirer)

Vietnam’s consumer price index in Jul fell 0.29% mom (-0.26% in Jun), General Statistics Office figures show, reflecting major problems of stagnant production and lower consumption. (Vietnam News)

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