US existing home sales in April rose 7.6% mom to an annual rate of 5.77m (5.36m in Mar), as buyers rushed to qualify for an expiring government tax credit, the National Association of Realtors said. This came in below market consensus (5.62m). The number of homes on the market surged by the most in a decade, while median prices showed the biggest gain in four years. (Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner said that a more market-driven currency would help Chinese officials to sustain growth, keep inflation low and adjust the nation’s growth model. So far, China has resisted calls from trading partners to let the renminbi strengthen after maintaining a peg of about 6.83 to the U.S. dollar for 22 months as a crisis policy. (Bloomberg)
China’s central bank Governor Zhou Xiaochuan said monetary policy will mainly be determined by domestic factors even as the economy relies on exports. “China is a large country with a large population so most of the important factors that need to be considered are domestic ones,” Zhou said at a briefing on U.S.-China strategic and economic talks in Beijing yesterday. He spoke after being asked whether policy is driven by domestic aspects such as inflation or external ones like the European debt crisis. (Bloomberg)
President Hu Jintao said that China will move gradually and independently in making changes to the nation’s exchange-rate mechanism as talks with the U.S. opened in Beijing yesterday. China will continue to “steadily advance” reform “under the principles of independent decision-making, controllability and gradual progress,” said Hu, echoing language in a May 10 central bank outlook for policy making. (Bloomberg)
Taiwan’s industrial production climbed for an eighth straight month in April on surging exports to China, helping send the unemployment rate to a 15-month low. Output gained 31.38% yoy in April (39.49% in Mar), the Ministry of Economic Affairs said in Taipei yesterday. A separate report showed the jobless rate dropped to 5.43% in April from 5.64% in March. (Bloomberg)
Thailand’s economy expanded the most since 1995 last quarter, before the nation’s worst political violence in 18 years undermined the country’s recovery. GDP rose 12% yoy in 1Q10 (5.9% in 4Q09), beating the 9% median estimate in a Bloomberg News survey of nine economists. (Bloomberg)
Prime Minister David Cameron’s coalition said it wanted to send a “shock wave” through departments as it announced GBP6bn (US$8.6bn) of spending cuts, the first steps toward reducing Britain’s record budget deficit. The business and transport budgets will have to find the biggest savings as government freezes civil-service recruitment, slashes spending on technology, advertising and travel and renegotiates existing contracts with private companies. (Bloomberg)
The German government is to cut its budget by EUR10bn a year until 2016 in order to set an example for the eurozone and to comply with the budget deficit rules in the constitution, the Financial Times reported. The cuts could be achieved through tax increases, reduced spending and lowered subsidies for Germany’s federal states, despite a promise by the coalition government to put tax cuts at the centre of the plan. (Financial Daily)
Singapore’s consumer prices rose 3.2% yoy in April (1.6% in Mar), the fastest pace in 14 months as an accelerating economy and a booming labor market boosted housing and transportation costs. On a mom basis, prices rose 0.9% (0.1% in Mar), without adjusting for seasonal factors. Economists had projected for a 2.6% yoy and 0.3% mom gain in the month. (Bloomberg)
Thailand’s government will extend some property tax breaks for a month to June to help home buyers in the wake of political unrest that has disrupted economic life, Finance Minister Korn Chatikavanij said. House transfer and mortgage registration fees will be maintained at 0.01% until the end of June before returning to 2.0% and 1.0% respectively. This will need cabinet approval today. The finance minister will also offer tax incentives from June to attract foreign investors to set up regional operating centres in Thailand. (Financial Daily)
Vietnamese inflation slowed to 9.1% yoy in May (9.2% in Apr), marking the second month ease as ample food supplies cooled prices, giving policy makers room to spur growth by boosting credit and encouraging market interest rates to fall. On a mom basis, prices rose 0.3% in May. (Bloomberg)
Vietnam will take flexible but cautious monetary policy to maintain the macroeconomic stability to achieve economic growth of 6.5% this year, the State Bank of Vietnam said. It will take synchronous measures in the remaining months to secure the economic growth target and curb inflation below 7.0% this year. It will also continue to use monetary tools to boost cash flows for the economy in line with the targets of credit growth of 25.0% and total money supply at 20.0% this year. (Bloomberg)
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