20100407 0927 Global Economic News.

Federal Reserve policymakers are worried that the economic recovery may lose steam going forward, despite recent moderate improvements, according to minutes. Though the latest data suggest an uptick in economic activity, Fed members believe that some sectors of the economy could stifle overall growth. But they could raise rates as soon as they see continued signs of life in the economy.

• Fed members believed the central bank's policy of "exceptionally low rates" for "an extended period" is explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time." The central bank's current guidance does not limit the Fed from tightening or maintaining its monetary policy, it said. (CNN Money)

The US government increased its crude oil price forecast for 2010 on projections that the global economy will rebound through the end of the year. West Texas Intermediate oil, the US benchmark, will average US$80.74 a barrel this year, up from last month’s forecast of US$80.06, according to the Energy Department’s monthly Short-Term Energy Outlook.

• That’s 31% higher than the 2009 average price of US$61.66 a barrel. Oil prices are forecast to climb 3.4% in 2011 to an average US$83.50, which was unchanged from last month’s estimate. (Bloomberg)

US crude oil inventories rose by 1.07m barrels last week to 353m, the American Petroleum Institute said. Gasoline inventories fell 2.96m barrels to 220.2m. Supplies of distillate fuel, a category that includes heating oil and diesel, climbed by 723,000 barrels to 148.3m. (Bloomberg)

Job openings in the US fell in February for the first time in three months, a sign employers will be slow to expand staff even as firings subside. Openings decreased by 131,000 to 2.72m, the Labor Department said. Fewer people were hired and the number of workers fired also decreased. (Bloomberg)

US Treasury Secretary Timothy F. Geithner said a new economic partnership with India offers “huge opportunities” for both nations as the world recovers from the worst recession since World War II. Geithner is focusing on global economic conditions, financial market stability and investment opportunities in infrastructure including roads and ports in his first trip to India as treasury secretary.

• The visit marks the beginning of US-India talks to strengthen ties, similar to the Strategic Economic Dialogue started in 2006 between the US and China. (Bloomberg)

The US economic recovery appears to be underway but housing will take a while to recover and the outlook for unemployment "is not promising", Narayana Kocherlakota, president of Federal Reserve Bank of Minneapolis said.

• He expects gross domestic product (GDP) growth of 3% per year over the next two years and he would be surprised if the unemployment rate, currently at 9.7%, were below 8.0% by the end of 2011. (Bloomberg)

European Union (EU) finance chiefs next week will discuss a tax on bank leverage and risk-taking that could generate as much as €50bn (US$67bn) a year for the region’s governments, the EU said. The prospective balance-sheet levy is among “innovative financing options.”

• A separate levy on financial transactions, so-called Tobin tax, could bring in up to €20bn. “The financial sector needs to contribute to the costs of financial stability. This should be one of the building blocks in our effort to set up a crisis-management framework in Europe,” it said. (Bloomberg)

Greece said it hasn’t tried to exclude the International Monetary Fund (IMF) from a European Union-led rescue package as it tries to end speculation that pushed the country’s financing costs to an 11-year high. “There has never been any move on the part of our country to change the conditions of the recent agreement of the European Council on the support mechanism,” Finance Minister George Papaconstantinou said. (Bloomberg)

Japan’s broadest indicator of economic health rose for an 11th month, extending the longest streak since 1997, as the nation sustained an economic recovery amid deflation. The coincident index climbed to 100.7 in February from 100.3 in January. Economists forecast for 100.5. (Bloomberg)

Taiwan’s consumer prices rose 1.3% yoy for a third consecutive month in March (2.4% in Feb) after the economy exited its deepest recession on record, suggesting the central bank may move to tighten monetary policy in the second half of the year. Economists forecast for a 1.9% gain in the month. (Bloomberg)

Indonesia’s central bank kept its benchmark interest rate at a record low of6.5% for an eighth straight month, judging that inflation isn’t yet enough of a threat to require higher borrowing costs. It was the lowest level since the measure was introduced in 2005, Darmin Nasution, senior deputy governor said. The decision was predicted by all economists. (Bloomberg)

Philippine inflation accelerated to a three-month high of 4.4% yoy in March (4.2% in Feb) as oil and food costs rose, supporting the central bank’s decision to unwind stimulus measures. That compares with the economists’ forecast for a 4.5% increase. Policy makers will “monitor demand conditions” for any need to adjust the monetary policy stance, Governor Amando Tetangco said. (Bloomberg)

Crude oil rose to a 17-month high on signals that US economic growth will accelerate, bolstering fuel use in the world’s biggest energy-consuming country. Crude oil for May delivery rose 22 cents, or 0.3%, to US$86.84 a barrel on the New York Mercantile Exchange, the highest settlement since 8 Oct 08. Futures reached US$87.09, the highest intraday level since 9 Oct 08. Prices are up 9.4% this year. (Bloomberg)

Australia’s central bank raised its key cash rate by 25bp to a 14-month high of 4.25% and flagged further moves ahead as the resource-rich nation rides a tide of Asian demand. “The board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average.

• This decision is further step in that process,” Reserve Bank of Australia said, It indicated that the average or normal rate would fall somewhere in the range of 4.25-4.75%. (StarBiz)

Singapore's Education Ministry said that 92.2% of students who graduated from the three local universities last year found jobs within six months of graduation. The three public universities are the National University of Singapore (NUS), the Nanyang Technological University (NTU) and the Singapore Management University (SMU). (Bloomberg)

China is studying limits on the scale of local government debt, the Ministry of Finance said. The central government is also studying the set up of risk alert systems for local government financing. China will also separately manage the debt of local governments and that of their financing vehicles, the Ministry of Finance said. (Bloomberg)

Indonesia's central bank revised up the country's economic growth to 5.5% to 6% this year, from the initial target of 5% to 5.5%. The bank said in a statement that continuing strong consumption and increasing exports contributed to the improvement of the country's economy. (Bloomberg)