Malaysia: Inflation up 1.7% y-o-y in June
Malaysia’s inflation rose for the fourth consecutive month in June this year, spurred mainly by costlier food and non-alcoholic beverages, beside higher transport expenses, and utility bills. The country’s inflation as measured by the consumer price index (CPI) rose by an annual pace of 1.7% in June, translating into a cumulative 1.4% rise in the CPI during the first half of this year, according to a statement by the Department of Statistics.(Financial Daily)
China: Investors defy Rogoff warning as yuan property bonds rise
China bond investors are betting government measures to cool property prices won’t hurt real estate companies as money managers and economists warn of a crash that may slow the economy leading global growth. Yields on China developers’ local-currency notes fell to the lowest ever relative to government debt this year, with the spread on Poly Real Estate Group Co.’s 4.3bn yuan (USD634m) in 7% bonds due 2013 narrowing to a record 95bps on 8 July, according to Shanghai Stock Exchange prices on Bloomberg. (Bloomberg)
EU: Euro passes own stress test as debt panic ebbs, bank exams loom
Europe may already have passed its biggest stress test. The euro has rallied 8% from a four-year low last month. Greece, Spain and Portugal have managed to sell 50bn euros (USD64bn) of debt since 10 May when the need to save the single currency forced finance ministers to create a nearly USD1trn rescue fund and European Central Bank President Jean-Claude Trichet to begin buying bonds. (Bloomberg)
EU: Banks may disclose sovereign-debt holdings with stress tests
Europe’s largest banks may give breakdowns of their sovereign-debt holdings when they release stress-test results, according to a document from the Committee of European Banking Supervisors. European regulators asked the region’s biggest banks to publish a list of each lender’s gross and net exposure to central and local governments in 30 countries in the region, including Greece, Spain, Ireland, Italy and Portugal, according to a confidential draft template obtained by Bloomberg News. (Bloomberg)
UK: BOE considered expanding stimulus in 7-1 vote against Sentance
Bank of England policy makers considered expanding stimulus this month after the economic outlook “deteriorated a little,” overruling Andrew Sentance’s repeated call for an interest-rate increase. The Monetary Policy Committee, led by Governor Mervyn King, voted 7-1 to keep the benchmark rate at 0.5%, according to minutes of the July 8 decision released in London. Sentance favoured an increase to 0.75%, arguing that inflation had “shifted sufficiently to justify beginning to raise interest rates gradually.” (Bloomberg)
Brazil: May raise rate to 11% to slow growth, prices
Brazil’s central bank will probably maintain its “aggressive” pace of interest rate increases and raise borrowing costs for a third straight meeting to slow growth to a level that won’t stoke a resurgence of inflation. Policy makers will raise the Selic benchmark rate 75bps to 11% from 10.25%, according to 46 of 49 economists surveyed by Bloomberg. Three analysts expect a half- point increase, in line with traders’ bets after a report showed that prices unexpectedly fell in the month through mid-July. (Bloomberg) US: Bernanke says Fed is prepared to act as needed Federal Reserve Chairman Ben S. Bernanke said central bankers “remain prepared” to act as needed to aid growth even as they get ready to eventually raise interest rates from almost zero and shrink a record balance sheet. While Fed officials plan for the exit, “we also recognize that the economic outlook remains unusually uncertain,” Bernanke said in testimony to the Senate Banking Committee. (Bloomberg)
U.S: Housing starts fell in June to the lowest level in eight months after the expiration of a U.S government tax incentive caused sales to slump. The retreat following the end of government support shows it will be difficult for the industry that precipitated the recession to sustain a recovery. (Source: Bloomberg)
U.S: Senate approved an extension of unemployment insurance that restores aid to 2.5million people who lost their benefits during a fight over whether to add the USD34b cost to the federal deficit. The nationwide unemployment rate was 9.5%.(Source: Bloomberg)
U.K: Bank of England policy makers voted 7-1 to maintain rate at 0.5% , to keep interest rates at a record low this month as the economic outlook had "deteriorated a little," overruling Andrew Sentance's call for an increase for a second month. (Source: Bloomberg)
Thailand: Exports rise the most in more than 18 years to surpass the record value set before the global financial crisis, adding to evidence of the economy's resilience to Europe's debt woes and domestic political unrest. Shipments jumped 46.3% in June from a year earlier to an unprecedented USD18.04b, Commerce Minister Porntiva
Nakasai said in Nonthaburi province on the outskirts of Bangkok. (Source: Bloomberg)
Philippine: Budget deficit in the first half of 2010 exceeded an earlier forecast as spending rose and tax revenue missed targets. The shortfall was PHP34.6b (USD744m) in June, President Benigno Aquino's three-week-old government said in a statement in Manila. (Source: Bloomberg)
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