20100316 0939 Global Economic News.

US industrial production in February rose 0.1% (+0.9% in Jan), slightly above the expectation for no change. This was due in part to gains in demand for computers and semiconductors. Capacity utilisation rose 0.2pt to 72.7%. Manufacturing output was down 0.2% (+0.9% in Jan) and was "likely held down somewhat by winter storms in the Northeast." Utilities rose 0.5%. Consumer goods dropped 0.4% and autos were down 4.4%. (Xinhua)

US homebuilder confidence unexpectedly declined in March, a sign the housing recovery is having trouble gaining momentum. The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 15 this month from 17 in February. A reading below 50 means most respondents view conditions as poor. (Bloomberg)

Net foreign selling of US securities totalled US$5bn in January vs. flat numbers in December 2009. This came as China and Japan, the two biggest holders of Treasuries, reduced their positions. Foreign Official Institutions led the selling in January with net sales of US$3.8bn vs. selling of US$3bn in the previous month. Total net buying of long-term equities, notes and bonds totalled US$19.1bn, compared with purchases of US$63.3bn in December. (Xinhua, Bloomberg)

US Senate Banking Committee Chairman Chris Dodd reintroduced financial reform legislation, saying that his revised plan provides the basis for a reform effort that can attract bipartisan support. "I'm still optimistic we can get a final consensus on the bill," Dodd said. Dodd said he still is pushing for the "broad consensus we need to reform the financial system."

• Dodd's bill has four major components: ending Too Big to Fail, creating an early warning system for systemic risk problems, creating a better regulatory framework for derivatives, and setting up a consumer protection entity to protect consumers who are purchasing financial products. (Xinhua)

European finance ministers sparred over an aid package for debt-ridden Greece, banking on the Greek government’s budget cuts to make a bailout unnecessary. Officials from the 16 countries using the euro damped speculation that tonight’s meeting in Brussels would hammer out a rescue strategy amid hopes that €4.8bn (US$6.6bn) in savings will put Greece on a path to fiscal health.

• “There is no emergency plan, at any rate not one that I’m aware of. The bandwidth of possible measures and opinions on what can be done are still very divergent,” Austrian Finance Minister Josef Proell said. (Bloomberg)

Japan’s consumer confidence rose from 39.0 to 39.8 in February, marking the second month expansion as the economic recovery began to generate jobs. Economists had forecast for a gain to 40.0. (Bloomberg)

The Japanese government raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur profits, home building and consumer spending. “The economy has been picking up steadily, though it remains in a “difficult situation” because of high unemployment,” the Cabinet Office said. (Bloomberg)

China’s foreign direct investment rose 1.1% yoy to US$5.9bn in February (7.8% in Jan), marking the seventh month increase. That was less than the median forecast for a 10.7% gain. China’s February economic data was affected by a weeklong Lunar New Year holiday. (Bloomberg)

China cut back its Treasury bond holdings to the lowest level in eight months, amid sharp allegations that Beijing is undervaluing its currency, the US Treasury said. China sliced its bond holdings to US$889.0bn as at end-January from US$894.8bn as at end- December 2009. (Channel News Asia)

Singapore’s retail sales rose 2.3% yoy in January (-4.9% in Dec 09), marking the first time increase in 16 months as motor-vehicle purchases climbed and consumers bought furniture and household goods ahead of the Lunar New Year festival. Economists had projected it would rise by 0.5% yoy in January. (Bloomberg)

Singapore’s Ministry of Manpower (MOM) said the last year’s labour market was more resilient than in previous downturns, supported by the Resilience Package and concerted tripartite efforts to save jobs. The labour market rebounded quickly in 2H09, offsetting the job losses experienced in 1H09. Total employment grew by 37,500 in 4Q09 alone (21,300 in 4Q08), and double the gains of 14,000 in 3Q09. The long-term unemployment rate remained unchanged at 0.7% in 2009. (Channel News Asia)

India’s inflation accelerated 9.9% yoy in February (8.6% in Jan), marking a 16-month high and increasing pressure on the central bank to raise interest rates from a record low. Market had projected for a 9.7% increase for February. (Bloomberg)

The World Bank will stress the need for infrastructure building in its future lending programmes for East Asian middle-income countries such as Indonesia, Vietnam and the Philippines. Infrastructure investment in parts of East Asia outside China 'has fallen substantially behind' needs, the World Bank's vice-president for East Asia and the Pacific Jim Adams said. Mr Adams said the bank was too willing to leave infrastructure to the private sector in earlier years but is making up for this now under its Infrastructure Action Programme. (SBT)