US retail sales unexpectedly climbed in February signaling consumers will contribute more to economic growth. Purchases increased 0.3% (+0.1% in Jan), the fourth gain in the past five months. Retail sales were projected to fall 0.2$. Sales excluding autos rose 0.8%, exceeding market estimates of +0.1%. (Bloomberg)
US consumer confidence unexpectedly declined for a second month in March, a sign Americans are discouraged about the labor market. The Reuters/University of Michigan preliminary consumer sentiment index fell to 72.5 from February’s final reading of 73.6. Economists surveyed projected the gauge would increase to 74. (Bloomberg)
San Francisco Federal Reserve Bank President Janet Yellen is a leading contender to be the next vice chairman of the Fed, according to White House press secretary Robert Gibbs. Gibbs, speaking to the press Friday, also said that Sarah Raskin, the Maryland Commissioner of Financial Regulation, and Peter Diamond, a professor at the Massachusetts Institute of Technology, are under "strong consideration" for two longstanding vacancies on the central bank's seven-member board of governors. (CNN Money)
European industrial output rose 1.7% mom in January (0.7% in Dec 09), marking the biggest increase in two decades as the reviving global economy prompted companies to boost production of goods including steel and machinery parts. The January increase was more than double the 0.7% mom gain projected by economists. From a year earlier, output rose 1.4 % (-4.0% in Dec 09), marking the first annual increase since Apr 08. (Bloomberg)
Greece’s budget deficit narrowed by 77.0% yoy to €903.0m (US$1.2bn) in the first two months of the year, the government said. Ordinary revenue climbed 7.8% to €9.4bn, less than the government’s target, while spending fell 9.6% to €8.9bn. Prime Minister George Papandreou’s government plans to cut spending and increase taxes to shave 4.0% pt from the deficit to 8.7% of output this year. (Bloomberg)
European Central Bank (ECB) council member Ewald Nowotny said that some euroregion governments may face a “debt spiral” if they don’t starting cutting their budget deficits next year. “The economic situation is still very tense and problematic,” Nowotny said. (Bloomberg)
Chinese Premier Wen Jiabao reiterated that China would keep the Renminbi (RMB) exchange rate stable and vowed to further improve the country's currency exchange formation mechanism. “A stable RMB exchange rate had played an important role in helping the world to recover from the latest economic crisis. I don't think RMB is under valued, from our survey of 37 countries on their exports to China, 16 of them saw an increase, even the EU, its overall exports had declined 20.3% but its exports to China only declined 15.3%. We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency," said Wen. (Bernama, Bloomberg)
Chinese Premier Wen Jiabao hopes the US would take concrete steps to assure its foreign investors on the safety of US treasury bonds. He stressed that the US should know that its treasury bonds were guaranteed by its national credibility. He was still worried over the country's investment in US assets and security, especially the treasury bonds, since last year. The instability of the US dollar is a great concern for China's foreign assets. China could not afford any mistake in the management of the country's financial assets, he added. (Bernama)
China’s bank governor Zhou Xiaochuan said the higher-than-expected inflation data hasn’t altered the central bank’s policy plan. “The central bank’s interest rate stance is mainly based on the outlook for inflation and changes in the overall economy rather than published numbers. The monetary policy must be pre-emptive. We need data forecast in advance, because monetary policy has a fairly long lag – it takes a time lag of a few months or even one year for money supply to work into the economy,” Zhou said. (Financial Daily)
Thailand’s foreign-exchange reserves rose 0.6% to US$142.6bn in the week ended 5 Mar, from US$141.8bn a week earlier. The central bank’s holdings of forward contracts fell 1.6% to US$12.3bn in the same week, from US$12.5bn a week earlier. (Bloomberg)
Red-shirt supporters of ousted prime minister Thaksin Shinawatra have given the Thai government until lunchtime today to resign or face rolling protests. Yesterday the red shirts held a rally which attracted an estimated 100,000 people - well short of the 1m they had predicted. (ABC News)
Indonesia’s sovereign debt rating was raised to the highest level in 12 years by Standard & Poor’s after the central bank increased the country’s economic growth forecasts last week. S&P lifted Indonesia’s long-term foreign-currency rating one level to BB from BB-. The outlook is positive. The rating, which was last increased in July 06, is two levels below investment grade and on par with Turkey and Jordan. (Bloomberg)
India’s industrial production rose 16.7% yoy in January (17.6% in Dec 09), diminishing spare capacity and contributing to inflationary pressures that may spur the central bank to raise interest rates within weeks. Economists had projected the industrial production would increase by 17.0% yoy in January. (Bloomberg)
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