Malaysia: Decision on extending preferential tax by year-end
The Government will decide by year-end the proposed extension of a preferential tax treatment to skilled workers in specific industries in the various planned economic corridors, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said yesterday. However, he declined to say which industries or economic corridors would be given the special tax rate. (Financial Daily)
Malaysia: Sundry goods merchants call off boycott
The Federation of Sundry Goods Merchants Association has assured consumers that there would be enough supply of sugar, flour and cooking oil in sundry shops following a consensus reached with the Government. The new licensing developments include that there will now be a single licensing system from 1 July to sell 6 essential items and that sundry shops are permitted to have in capacity 500kg each for sugar, flour and cooking oil compared to 200kg previously. (Star)
Indonesia: Seeks to manage capital flows, reduce Rupiah swings
Indonesia’s central bank will reorganize its bill sales to encourage investors to keep their money in Southeast Asia’s largest economy for longer, joining regional policy makers in seeking to reduce currency volatility. Investors in Bank Indonesia bills maturing in a month must hold the securities for at least one month, whether they make the purchase in the primary or secondary market, Senior Deputy Governor Darmin Nasution told reporters in Jakarta. The central bank will also sell longer-term bills and charge lenders more for tapping its funds. (Bloomberg)
China: IMF chief economist says it’s in China’s interest to revalue yuan
It is in China’s interest to revalue its currency, and from the point of view of the rest of the world it should happen as soon as possible, the International Monetary Fund’s (IMF) top economist was quoted as saying. “Some sectors in China are overheating and workers are demanding more pay. They (authorities) don’t want the inflation risk to grow,” IMF chief economist Olivier Blanchard said in Finnish business paper Kauppalehti yesterday. (Financial Daily)
EU: Says countries must reduce budget deficits
The European Commission called on governments to take “ambitious” steps to push down budget deficits and said some debt-burdened countries may have to use “cold shower” consolidation plans. “Events in spring 2010 have exposed the urgency of addressing the fiscal challenge” in the euro area as “the high and rising public debts raised concerns on governments’ solvency,” the Brussels-based commission, the European Union executive said. “While gradual consolidations tend to have higher success rates than “cold shower” ones, the latter might be “a better approach” for high-debt countries, it said. (Bloomberg)
US: Producer prices in US decreased 0.3% in May on fuel
Wholesale prices in the US fell in May for the third time in the past four months, pulled down by lower costs for energy and food as European default concerns threatened to slow the global expansion. The 0.3% decline in prices paid to factories, farmers and other producers was smaller than projected by the median forecast of economists surveyed by Bloomberg news and followed a 0.1% drop in April, figures from the Labor Department showed in Washington. Excluding food and fuel, so-called core prices climbed 0.2% for a second month. (Bloomberg)
US: Factories lead rebound as housing falls
Production in the US rose by the most since August and builders broke ground on fewer homes than projected, showing manufacturing is sustaining the recovery as the housing market retreats following the expiration of a government tax credit. Output at factories, mines and utilities increased 1.2% last month after a 0.7% gain in April. Housing starts fell 10%, the biggest decline since March 2009, according to figures from the Commerce Department. (Bloomberg)
Stocks hit 1-month high; euro near peak
LONDON, June 16 (Reuters) - World stocks rose to a one-month high and the euro briefly hit a two-week peak as strong gains on Wall Street encouraged fresh risk-taking, while lingering euro zone debt concerns limited aggressive buying.
"On a momentum basis, if we track the U.S. higher then there's a good case that we can push higher from here but it's going to be very hard going indeed if Spanish bond yields keep going north," said Geoff Wilkinson, head of investment research at Mint.
NY manufacturing grows, U.S. import prices slip
NEW YORK, June 15 (Reuters) - Manufacturing in New York state grew in June even as hiring slowed, supporting views the factory sector is recovering, while U.S. import prices recorded their largest decline in nearly a year in May.
The data is the latest sign of strength in manufacturing and follows recent U.S. reports suggesting the rebound may be losing momentum, including one showing U.S. private employers hired fewer workers than expected in May and another showing a surprise decline in May retail sales.
European recession next year "almost inevitable"-Soros
LONDON, June 15 (Reuters) - Europe faces almost inevitable recession next year and years of stagnation as policymakers' response to the euro zone crisis causes a downward spiral, billionaire U.S. investor George Soros said on Tuesday.
Flaws built into the euro from the start had become acute, Soros told a seminar, warning that the euro crisis could have the potential to destroy the 27-nation European Union.
Australia PM signals mining tax compromise
SYDNEY, June 16 (Reuters) - The Australian government stood firm on Wednesday on the 40 percent headline rate for its planned mining tax, but said it was prepared to discuss how the tax was phased-in within sectors of the mining industry.
Government recognition that parts of the resource industry may be affected differently by the tax, indicated Canberra could alter some details of the tax to suit mining sectors.
