India: Inflation rate cools to cools to lowest level in 2010
India’s inflation slowed to an 11- month low, giving the central bank scope this month to pause Asia’s fastest round of interest-rate increases. The wholesale-price index rose 7.48% in November y-o-y after an 8.58% jump in October. Price pressures may strengthen as industrial production grew at the fastest pace in three months in October, signaling consumer demand remains strong even after six rate increases in 2010. The Reserve Bank of India aims to slow inflation to between 4% and 4.5%. (Bloomberg)
UK: Inflation rate unexpectedly increases
UK inflation rate unexpectedly accelerated to a six-month high in November, adding to the case for policy makers to rein in cost pressures. Consumer prices rose 3.3% y-o-y after a 3.2% increase in October, the highest since May. Core inflation remained at 2.7%. Food prices jumped 1.6% m-o-m. M-o-m, consumer prices rose 0.4%, exceeding forecast of a 0.4% increase. Clothes prices jumped 2% m-o-m and furniture prices rose 1.6%. Inflation has been above the government’s 3% limit for nine months and a sales-tax increase in January may add to prices in 2011. (Bloomberg)
EU: Industrial production rises on capital goods
European industrial production increased in October led by orders for capital goods. Output in the euro region rose 0.7% m-o-m, when it fell a revised 0.7%. Production increased 6.9% y-o-y, after gaining 5.4% in September. Production of capital goods jumped 1.8% m-o-m, output of intermediate goods rose 0.2% and energy production increased 0.4%. Output of durable consumer goods slipped 0.1%. (Bloomberg)
EU: German investor confidence increases for second month
German investor confidence improved for a second month in December as the recovery in Europe’s largest economy showed signs of broadening. The index of investor and analyst expectations, which aims to predict developments six months ahead, increased to 4.3 from 1.8 in November, beating estimates of a gain to 3.9. Germany’s economy has fueled the euro region’s expansion this year as companies stepped up hiring and output to meet export demand, encouraging consumer spending. (Bloomberg) US: Inventories increase 0.7%, sales up 1.4% Inventories in the US rose less than forecast in October, restrained by the biggest drop in retail stockpiles in more than a year as merchants had trouble keeping up with surging demand. The 0.7% increase in inventories compared with a 1.4% jump in sales in October that was the biggest gain in seven months. Companies had enough goods on hand to supply 1.27 months’ worth of sales at October’s pace. (Bloomberg)
US: Producer prices increased 0.8% in November, small business optimism climbs
Wholesale costs in the US rose in November by the most in eight months, led by higher prices for gasoline, heating oil and fruit. The producer price index increased 0.8% m-o-m. Core prices rose 1.2% in November y-o-y The cost of food increased 1% and energy prices rose 2.1%. Prices of crude goods increased 0.6% while expenses for intermediate goods rose 1.1% m-o-m. (Bloomberg)
US: Federal Reserve retains USD600bn bond-purchase program
Federal Reserve officials kept their plan to expand record monetary stimulus, saying the economic expansion hasn’t been strong enough to reduce joblessness. The central bank commented that the USD600bn of Treasury purchases are aimed at boosting a recovery that has been “disappointingly slow” and repeated its pledge to leave the benchmark interest rate low for an “extended period.” Fed officials left their target for the federal funds rate in a range of zero to 0.25%, marking two years of the policy .(Bloomberg)
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