U.S : MBA mortgage applications index increased 6.7% WoW last week. The Washington-based group's refinancing gauge jumped 9.2% WoW to the highest reading since May 2009, and its index of purchases fell 2% WoW to the second-lowest level since 1997. (Source: Bloomberg)
E.U : Stress tests will cover 91 banks, assume bond drop. European Union regulators are carrying out stress tests for 65% of the area's banking industry, to examine whether they can withstand a shrinking economy and a drop in government bond values. The lenders being tested include 14 from Germany, six from Greece and four from the U.K. EU banking regulators have told lenders that their planned stress tests may assume a loss of about 17% on Greek government debt and 3% on Spanish bonds, according to two people briefed on the talks. (Source: Bloomberg)
E.U : Exports and state spending led 1Q10 expansion offsetting declines in company investment and household consumption. Exports from the 16 nations using the euro increased 2.1% QoQ, when they rose 1.8%QoQ, while state spending increased 0.2%QoQ. (Source: Bloomberg)
China : Seeks to tighten liquidity even as growth slows. The People's Bank of China (PBOC) signaled it remains focused on reining in liquidity and stemming inflation even after evidence of slowing growth in the world's third-biggest economy contributed to a global stock sell-off. (Source: Bloomberg)
China : Plans new resource tax in restive western areas. China plans to impose a tax on coal, oil and gas extraction in western provinces, raising funds to develop its most restive region in a move that will reduce profits for PetroChina Co. and rival resource producers. The tax, introduced in Xinjiang last month, will be broadened to include all western provinces, the government said in a statement, citing comments by Premier Wen Jiabao. The levy will be based on prices instead of volume as first announced, the government said on its website. (Source: Bloomberg)
Australia : April construction shrinks at fastest pace in 10 months, a sign the most aggressive round of interest rate increases among Group of 20 members is eroding demand for new dwellings. The index fell 6.8 points to 46.4 from May, according to a survey by the Australian Industry Group and Housing Industry Association. (Source: Bloomberg)
China: Seeks to tighten liquidity even as growth slows
The People’s Bank of China signaled it remains focused on reining in liquidity and stemming inflation even after evidence of slowing growth in the world’s third-biggest economy contributed to a global stock sell-off. A surfeit of cash is still the main problem facing monetary policy, and PBOC should at an appropriate time use interest rates to address it, Yang Guozhong, director of the bank’s business management department said. (Bloomberg)
South Korea: Bank of Korea to debate timing rate increase as growth quickens
Bank of Korea policy makers will probably debate the timing of the first interest-rate increase since the global crisis as strengthening economic growth threatens to spur inflation. Four of 14 economists in a Bloomberg News survey predict the central bank will execute a quarter-point increase in the 2% benchmark rate this week, while the remainder anticipates Governor Kim Choong Soo will hold off until August or later in the year. (Bloomberg)
EU: Exports, government spending lead expansion
Exports and government spending helped sustain Europe’s recovery in the first quarter, offsetting declines in investment and household consumption. Shipments abroad from the 16 nations using the euro increased 2.1% from the fourth quarter, when they rose 1.8%, while state spending advanced 0.2%. Stockpiling also helped the economy, with changes in business inventories adding 1 percentage point to growth in the first quarter, when gross domestic product rose 0.2%, matching a 4 June estimate. (Bloomberg)
EU: Trichet faces market rate threat as debt crisis hurts growth
European Central Bank President Jean-Claude Trichet is facing higher interest rates sooner than he may have planned. Interbank borrowing costs have been climbing since financial institutions had to pay back a record EUR442bn (USD557bn) ECB loan on 1 July, threatening to hurt the economy just as investors fret about the health of the banking system and the ongoing sovereign debt crisis. (Bloomberg)
US: Retailers’ sales rise at fastest pace in 4 years
US retailers’ sales are growing at the fastest pace in four years, a sign that consumers may be overcoming concern about unemployment and depressed home value. Sales probably expanded at an average monthly rate of 4% in the first five months of the retail fiscal year that began on 31 Jan, the biggest gain since 2006, the International Council of Shopping Centers trade group said in advance of its June report. (Bloomberg)
US: Obama says US increasing access to export financing
President Barack Obama said his administration is increasing access to export financing for small and mediumsized US businesses while removing barriers to trade. “The Export-Import Bank has more than doubled its loans in support of American exporters since last year, and that step alone has helped support nearly 110,000 new jobs,” Obama said at the White House. (Bloomberg)
