Manufacturing in the New York region expanded at a slower pace, with the general economic index fell to 19.1 in May from 31.9 in April as sales cooled. Economists had expected the index would decrease to 30. New factory orders decreased to 14.3 in May (29.5 in Apr) and the shipments index dropped to 11.3 from 32.1 in April. The employment measure climbed to 22.4, the highest level since May 2004, from 20.3 in April. (Bloomberg)
Foreigners bought a monthly record of net US$140.5bn in long-term U.S. securities in March (US$47.1bn in Feb), led by a net US$108.4bn for Treasuries (US$48.1bn in Feb). March data also show strong foreign demand for government agency debt, corporate bonds, and even solid demand for equities. China increased its holding of U.S. Treasuries by nearly US$20bn in March to US$895bn, followed by Japanese (US$785bn). (Bloomberg)
US homebuilders turned less pessimistic in May as a government tax credit boosted sales. The National Association of Home Builders/Wells Fargo confidence index rose to 22 from 19 in April, exceeding the median forecast of 20. Readings lower than 50 mean more respondents said conditions were poor. Americans rushed to sign contracts ahead of an April 30 deadline for a tax credit of as much as US$8,000, spurring demand and trimming the inventory of unsold properties. (Bloomberg)
European finance ministers return to Brussels today as European Central Bank President Jean-Claude Trichet calls for a “quantum leap” in policy making to help stamp out the bloc’s sovereign debt crisis. Following a US$1trn financial lifeline for the Euro region, ministers are under pressure to show they can reduce deficits fast enough to satisfy investors and then police budgets effectively once targets are met. Spain unveiled on May 14 the biggest cuts in at least 30 years and Portugal followed a day later, pledging to slash wages and raise taxes. Italian officials said yesterday that the government may make an extraordinary reduction in public spending, and France is slated to submit its latest tax and spending plans to the commission this week. (Bloomberg)
Thailand’s government extended its deadline for protesters to leave their fortified camp in the center of Bangkok, easing fears of an imminent crackdown amid street battles that have killed at least 36 people in four days. (Bloomberg)
Fitch Ratings may review Thailand’s debt rating if the political situation worsens, associate director Vincent Ho said in a telephone interview today. The company is maintaining its negative outlook on Thailand’s credit rating. Fitch cut its outlook on Thailand’s local-currency debt to negative from stable last month, citing “an escalation in political uncertainty.” Thailand’s investment may weaken as prolonged political turmoil hurts sentiment, according to a credit analyst at Standard & Poor’s, said in a separate interview. Moody’s is monitoring Thailand’s political developments “very closely,” Senior Vice President Tom Byrne said in an e- mail to Bloomberg News today. (Bloomberg)
A panel of European Union lawmakers approved a proposal to force hedge-fund managers outside the EU to agree to transparency standards in exchange for a so-called passport to market to investors in the 27-nation bloc. The European Parliament’s economic and monetary affairs committee voted for the measure yesterday, as part of a package of tougher rules for hedge-fund and private-equity managers. (Bloomberg)
Japanese machinery orders advanced 5.4% mom in March, marking the first time increase in three months, reflecting a sustained recovery in an economy struggling to end deflation. Producer prices fell 0.2% yoy in April, the least in more than a year. (Bloomberg)
China’s trade deficit in March, described by some economists as a “one-off event,” may be repeated in coming months, the nation’s commerce ministry said. “Monthly figures this year will hover at either side of the balance point,” spokesman Yao Jian noted. The fullyear trade surplus is likely to “fall sharply”. (Bloomberg)
Singapore’s exports rose at the fastest pace since 2005 in April as a recovering global economy lifted shipments by electronic makers. Non-oil domestic exports climbed 29.4% yoy (25.4% in Mar). Economists had projected for an increase of 25.3%. (Bloomberg)
Oil fell below US$70 a barrel yesterday, to its lowest in more than 3 months, extending a loss of nearly 17% over the past two weeks on fears over Europe’s debts, the weak euro and swollen US oil inventories. US crude for June delivery fell more than US$1 yesterday to as low as US$69.82 a barrel, its weakest since 5 Feb. (Financial Daily)
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