Global: World Bank sees capital-flow risks, 3.3% growth in 2011. Capital inflows, a driving force of the recovery in emerging countries, now pose risks to global growth as they can trigger abrupt currency fluctuations that may do "lasting damage" to some nations, the World Bank said. The Washington-based institution left a growth forecast for the worlds economy this year unchanged at 3.3%, from a revised 3.9% in 2010. It predicted that the slowdown, which reflects capacity constraints in developing nations and restructuring in developed economies, will be followed by faster growth of 3.6% in 2012. (Source: Bloomberg)
U.S: Initial jobless claims rose last week to 445,000. The number of first-time claims for unemployment insurance payments jumped in the first week of 2011 to the highest level since October as more Americans lined up to file following the holidays. Initial jobless claims rose by 35,000 to 445,000, according to Labor Department data. The average number of applications over the past four weeks, a less-volatile gauge, increased to 416,500. (Source: Bloomberg)
U.S: Producer prices increased 1.1% MoM in December, led by higher prices for commodities such as fuel and food. The so-called core measure, which excludes volatile food and energy costs, climbed 0.2% MoM, in line with estimates. (Source: Bloomberg)
U.K: Manufacturing rose more than economists forecast in November. Factory output rose 0.6% MoM from October, when it also increased at the same pace. Overall industrial output rose 0.4% MoM in November. (Source: Bloomberg)
Spain: Sells top target in first debt auction of 2011. Spain sold EUR 3b (USD 3.95b) of bonds in its first debt auction of the year, meeting its maximum target as demand increased. The Treasury sold the five-year bonds at an average yield of 4.542%, the Bank of Spain said, compared with 3.576% the last time the securities were auctioned on Nov. 4. Similar-maturity bonds traded at a yield of 4.630% before the auction and demand was 2.1 times the amount sold compared with 1.6 times at the previous sale. (Source: Bloomberg)
China: Will allow companies to invest overseas in Yuan in the latest move to expand the currency's international role and curb dependence on the dollar. The new rules will cover non-financial companies in places where a Yuan trade settlement program is taking place, the People's Bank of China said on its website. (Source: Bloomberg)
India: Food inflation slowed for the first time in six weeks after Prime Minister Manmohan Singh's government banned onion exports and supplies of potatoes and lentils improved from fresh harvests. An index measuring wholesale prices of farm products including milk and lentils rose 16.91% YoY in the week ended Jan. 1. The gauge gained 18.32% YoY the previous week. (Source: Bloomberg)
Singapore: Plans more housing curbs as prices rise to record. Singapore will raise down payment requirements for second mortgages and extend the period homeowners must hold properties to avoid a sales tax as it steps up efforts to curb speculation after prices rose to a record. Individuals with more than one mortgage can only borrow up to 60% of a property's value, down from 70%, the government said in a statement. On loans to entities other than individuals it will be reduced to 50% from 60%. Sellers will now have to pay a stamp duty for all homes and land sold within four years of purchase, from three years. (Source: Bloomberg)
Thailand: Consumer confidence rose for the first time in three months in December as the baht eased from a 13-year high and exports grew. An index measuring sentiment climbed to 71.9 last month from 70.3 in November, the University of the Thai Chamber of Commerce said in a statement in Bangkok. (Source: Bloomberg)
Australia: December employment growth misses estimates as a stronger currency and higher borrowing costs slowed the economy. The number of people employed rosed by 2,300 from November, the statistics bureau said in Sydney. The jobless rate fell to 5%, the lowest since January 2009, from 5.2% a month earlier partly because some people stopped looking for work. (Source: Bloomberg)
South Korea: Rate rise boosts won pressure as Lee battles inflation
South Korea’s third interest-rate increase since the global financial crisis and the government’s planned price controls may fail to curb inflation unless the won appreciates further, paring the cost of imported goods. The Bank of Korea raised borrowing costs by a quarter of a percentage point to 2.75% and the government said it aims to freeze utility prices and reduce food tariffs to damp quickening inflation. While the won rose to a twomonth high against the dollar after the rate increase, the currency’s climb over the past year is the weakest in Asia outside Hong Kong, which operates a peg to the greenback. (Bloomberg)
China: Inflation may ease pressure on yuan at Hu-Obama summit
Rising inflation in China that is causing headaches for President Hu Jintao at home may help relieve tensions with the US over the yuan as he prepares to meet President Barack Obama in Washington next week. Prices are climbing faster in China than in the US, making Chinese goods less competitive, Treasury Secretary Timothy F. Geithner said. Chinese officials may also seek to speed up gains in the currency, also known as the renminbi, to fight inflation, lowering the cost of imported US goods such as Boeing Co. aircraft and Microsoft Corp. software. (Bloomberg)
India: To Import onions from Pakistan as inflation set to climb
India will import 1,000 tonnes of onions and kept a ban on export of edible oils and lentils to cool prices, ahead of a report that may show inflation accelerated last month. The benchmark wholesale-price index probably gained 8.4% in December 2010, the median forecast of 30 economists in a Bloomberg News survey showed. The gauge rose 7.48% the previous month. (Bloomberg)
UK: BOE holds stimulus as Cameron’s spending squeeze looms
The Bank of England maintained emergency stimulus for the economy as officials judged Prime Minister David Cameron’s spending squeeze this year will help tame the fastest inflation since he took office. The nine-member Monetary Policy Committee, led by Governor Mervyn King, held its bond plan at GBP200bn (USD315bn) as forecast by all 39 economists in a Bloomberg News survey. The bank left its main interest rate at a record low of 0.5% as forecast by all 61 economists in a separate poll. (Bloomberg)
EU: ECB keeps rate at 1% as crisis tests monetary policy
The European Central Bank kept interest rates at a record low as the sovereign debt crisis widens economic divergences within the euro area, straining the bank’s one-size-fits all monetary policy. The ECB’s Governing Council set the benchmark rate at 1% for the 21st month, as predicted by all 53 economists in a Bloomberg News survey. (Bloomberg)
US: Trade deficit unexpectedly decreases
The US trade deficit unexpectedly shrank in November as growing global demand and a weaker dollar help boost overseas sales of everything from aircraft to cotton. The gap shrank 0.3% to USD38.3bn, the smallest in 10 months, as exports climbed to the highest level in more than two years, according to data from the Commerce Department in Washington. Other reports showed increases in claims for jobless benefits and wholesale prices. (Bloomberg)
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