Germany: Business confidence unexpectedly rose to a three year high in August . The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 106.7 from 106.2 in July. That's the fourth straight monthly increase and the highest level since June 2007. (Source: Bloomberg)
Singapore: Bond sales are accelerating as companies on an island vying for the title of world's fastest growing economy exploit the lowest funding costs in at least two decades to finance expansion. Temasek Holdings Pte. and CapitaLand Ltd. led borrowers that raised USD14.1b this year, topping the record USD13.2b of notes sold in 2001, according to data compiled by Bloomberg. (Source: Bloomberg)
Thailand: Raises interest rate, signals more increases
Thailand’s central bank raised its benchmark interest rate and signaled further increases after the economy overcame political unrest to grow faster than estimated last quarter. The baht strengthened and stocks fell. The Bank of Thailand increased the one-day bond repurchase rate by a quarter of a percentage point to 1.75% after its first increase in almost two years last month, it said in Bangkok. The decision was predicted by 11 out of 12 economists surveyed by Bloomberg News. (Bloomberg)
Japan: Export growth slows as global demand wanes
Japan’s export growth slowed for a fifth month in July, adding to risks in an economy under threat from the yen’s surge to a 15-year high against the dollar. Overseas shipments advanced 23.5% in July from a year earlier, less than June’s 27.7% gain, the Finance Ministry said in Tokyo. The median estimate of 18 economists surveyed by Bloomberg News was for a 21.8% increase. From a month earlier, exports fell 1.4%, the third monthly drop. (Bloomberg)
Korea: Bank of Korea governor says ’vigilance’ needed on inflation
South Korea should be alert to inflation risks even as the global recovery is set to be slower than expected, central bank Governor Kim Choong Soo said. Asia’s fourth-largest economy needs “vigilance against the possibility of the awakening of inflation expectations” with its consumer price index projected to accelerate, Kim said in a speech in New York hosted by the Korea Society on 25 Aug. A “double-dip recession” or recurrence of the global financial crisis is unlikely, though the pace of the recovery in major economies such as the US will be “slower than expected,” Kim said. (Bloomberg)
India: RBI says curbing inflation is its top priority
India’s central bank said controlling inflation is its top priority, a stance that may fuel speculation it will raise interest rates for the fifth time since mid-March. “Inflation containment may have to receive precedence over the other policy objectives,” the Reserve Bank of India said in its annual report for the year ended 30 June. “Inflation has emerged as a major concern.” India’s 10-year government bond yields climbed to the highest in more than three months, stoked by inflation concerns. (Bloomberg)
EU: UK budget ‘regressive’, hits poor hardest, IFS says
The UK coalition government’s assertion that its budget cuts will hit the richest households more than the poorest is challenged by a research of Institute for Fiscal Studies. An analysis of all benefit cuts announced in the 22 June budget shows the measures to be “regressive,” with the poorest households hit hardest, the IFS said. “The distributional effect of all tax and benefit reforms due to be implemented by 2014-15 is clearly regressive within the bottom nine decile groups of the income distribution when losses are expressed as a percentage of net income,” the London-based IFS said in a report. (Bloomberg)
US: Durables, housing signal recession risk
Orders for durable goods in the US increased less than forecast in July and sales of new homes unexpectedly dropped, increasing the risk of a renewed recession in the world’s largest economy. Bookings for goods made to last at least three years rose 0.3%, figures from the Commerce Department showed in Washington. Excluding transportation equipment, demand fell by the most in more than a year. Purchases of new dwellings fell 12% to an annual pace of 276,000, the weakest since data began in 1963, figures from the same agency showed. The reports indicate capital spending, one of the few bright spots in a weakening economic recovery, is slowing as the second half begins, while a lack of jobs is crippling housing. (Bloomberg)
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