E.U: ECB steps up bond purchases as Governments aim to revamp tools. The Frankfurt-based ECB said it completed EUR 2.313b (USD 3.07b) of purchases last week after settling EUR 113m the previous one. It will take seven- day term deposits to neutralize EUR 76.5b of liquidity created through bond purchases since the program started on May 10. (Source: Bloomberg)
Japan: BoJ cut its economic assessment of seven of the country's nine regions, the most since April 2009, as export growth cooled and government stimulus measures started to fade. "Compared with the assessment in October 2010, a large number of regions observed that the pace of improvement seemed to be pausing," the central bank said in its quarterly Sakura Report, the equivalent of the U.S. Federal Reserves Beige Book. (Source: Bloomberg)
India: Facing inflation surge, central bank Governor Duvvuri Subbarao said, fueling speculation he may raise interest rates at the Jan. 25 policy meeting. "We recovered from the crisis sooner than other countries but inflation also caught up sooner," Subbarao said in a speech, referring to the global financial crunch. "A lot of other countries are still flirting with deflation. On the other hand, we have a surge in inflation." (Source: Bloomberg)
Philippine: Remittances sent home by Philippine citizens abroad rose in November. The funds increased 10.5% YoY to USD1.61b, the central bank said in a statement. That compares with a 9.3% YoY gain in October. Cash transfers from Filipinos living or working overseas climbed 8.2% YoY to USD17.1b in the 11 months through November. (Source: Bloomberg)
Malaysia: Bank Negara expects 7% GDP growth in 2010
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz expects the Malaysian economy to grow in the region of 7% for 2010. She said while the external sector may be affected by the slower global growth, the growth momentum of domestic demand is projected to be sustained this year. She expects overall growth to remain strong this year, albeit at a more moderate pace. Zeti also called for greater vigilance on the part of the policymakers in the region. (Financial Daily)
Singapore: Export growth slows as best year since 2003 ends
Singapore’s exports rose at a slower pace in December, ending a year in which shipments jumped the most since 2003 as the global economic recovery boosted demand for the island’s goods. Non-oil domestic exports climbed 9.4% y-o-y, after a revised 9.9% gain in November. Shipments rose about 23% in 2010, the most in seven years. Electronics shipments fell 1.1% in December y-o-y to SGD5.2bn after a 10.8% gain the previous month, the first decline in more than a year. Non-electronics shipments, which include petrochemicals and pharmaceuticals, gained 16.2%. Pharmaceutical shipments dropped 2.8% after falling 34.2% in November. (Bloomberg)
Indonesia: Rating raised by Moody’s to 13-year high
Moody’s Investors Service upgraded Indonesia’s foreign and local-currency bond rating to Ba1 from Ba2, the highest level since the 1997 Asian financial crisis, citing the nation’s “economic resilience” and improving public debt position. That’s still one step below investment grade and puts Indonesia on par with Greece, which was placed on review for a possible downgrade by Moody’s last month. Moody’s also commented that the rating’s outlook is “stable.” S&P lifted Indonesia’s sovereign credit rating to BB from BB- last year, two levels below investment grade, with a positive outlook. (Bloomberg)
China: December property prices rise for 19th month
China’s real estate prices rose for a 19th month in December, raising concerns that the government will expand curbs to limit the risk of asset bubbles in the world’s fastest-growing major economy. Prices in 70 cities rose 6.4% in December y-o-y, the smallest increase in 13 months. Prices gained 0.3% m-o-m. Investment in realestate development rose 12% to RMB557bn y-o-y while full-year investment climbed 33% to RMB4.83trn. Property sales increased 22% to RMB1.02trn, with 218 million m2 of real estate sold, a 12% gain y-o-y. (Bloomberg)
Australia: December annual inflation gauge increases 3.8%
A gauge of Australia’s inflation remained above the central bank’s target range for a fourth straight month, led by higher costs for fruit, vegetables and fuel. Consumer prices increased 3.8% last month y-o-y, after advancing 3.9% in November, according to an index compiled by TD Securities Ltd and the Melbourne Institute. Prices increased 0.2% m-o-m. The survey was taken before floods devastated parts of northeastern Australia, which may force the Reserve Bank of Australia to accept higher inflation in the short term as food and commodity costs rise and growth slows in the disaster zone. (Bloomberg)
Japan: REITs seen doubling down as bond spreads narrow
Japan’s real estate investment trusts may double property purchases in the next fiscal year to JPY 1trn (USD12bn) by boosting bond sales amid the lowest borrowing costs in three years, Credit Suisse said. The extra yield investors demand to lend to Japanese real estate firms instead of the government has fallen to 26 basis points, or 0.26% point, on 17 Jan this year from 230 in April 2009. The comparable premium for US REITS has narrowed to 199 basis points from 1,079 in the same period, according to Bank of America Merrill Lynch Global Bond Indices. (Bloomberg)
Euro: Default swaps beat bonds in highlighting EU stress
Credit-default swaps are a better gauge of euro-region creditworthiness than bonds as the European Central Bank’s EUR 74bn (USD98bn) of debt purchases make investors skeptical about what is driving spreads narrower. The cost of insuring Portuguese debt against default surged to a record on 10 Jan this year on speculation that Germany and France would force the country to seek aid. By contrast, the yield spread between 10-year Portuguese debt and German bonds shrank by the most in a month. (Bloomberg)
UK: Pound Losing to Euro as Cameron Collides With King
No major currency is performing worse than the pound as Prime Minister David Cameron’s budget cuts slow growth and accelerating inflation limits the Bank of England’s ability to spur the world’s sixth-largest economy. GBP has weakened against all 16 of the most-traded currencies, depreciating even more than the Euro, since the start of August. The three most accurate strategists for the pound expect it to continue falling and futures traders this month were the most bearish since September. (Bloomberg)
UK: Inflation accelerates more than forecast to 3.7%
UK inflation accelerated more than economists forecast to an eight month high in December as fuel and food prices rose, adding to pressure on the Bank of England to raise the key interest rate from its record low. Consumer prices rose 3.7% from a year earlier after a 3.3% increase in November, the office for National Statistics said today in London. The median forecast of the 31 economists in a Bloomberg survey was 3.4%. (Bloomberg)
US: Global demand for US assets increased in November
Global demand for U.S. stocks, bonds and other financial assets rose in November as private investors stepped up purchases.Net buying of long-term equities, notes and bonds totaled USD 85.1bn during the month, the highest since August, compared with net buying of USD 28.9bn in October, according to data released today in Washington. Europe’s sovereign debt crisis has driven investors to the relative safety of US Treasury securities. Investors are also attracted by rising corporate profits and share prices as the world’s largest economy maintains its recovery from the deepest recession since the 1930s. (Bloomberg)
U.S: New York manufacturing picks up as orders, sales gain in January. The Federal Reserve Bank of New York's general economic index rose to 11.9 from a revised 9.9 in December. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut. (Source: Bloomberg)
U.S: Builder confidence in January held back by lack of credit. The National Association of Home Builders/Wells Fargo sentiment index registered a reading of 16, the same as the past two months. Readings below 50 mean more respondents said conditions were poor. (Source: Bloomberg)
E.U: Germany balks at crisis response; EU sees complacency. Germany pushed back at European Union calls for a rapid reinforcement of the safety net for debt-strapped countries, saying the rally in southern European bond markets buys time to craft a new strategy. German Finance Minister Wolfgang Schaeuble said there is no urgent need to act, eyeing a late-March deadline to strengthen the EUR 750b (USD 1tr) rescue fund, hammer out a permanent anti-crisis tool and tighten fiscal rules for the 17- nation euro area. (Source: Bloomberg)
Germany: Investor confidence jumps to six-month high in January. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, increased to 15.4 from 4.3 in December, its third straight advance. (Source: Bloomberg)
U.K: Consumer confidence rose from a 20 month low in December as more Britons thought it was a good time to buy household goods before this month's increase in sales tax, Nationwide Building Society said. The sentiment index climbed 8 points to 53, reversing the decline seen in November, when the gauge fell to its lowest since March 2009, the customer owned lender said in an emailed report. (Source: Bloomberg)
China: Foreign direct investment rose to a record USD105.7b last year, underscoring confidence that rising incomes will boost demand in the world's fastest growing major economy. Investment climbed 17.4% YoY, the Ministry of Commerce said in a statement in Beijing. Spending in December rose 15.6% YoY to USD14b. (Source: Bloomberg)
S. Korea: Department store sales growth accelerated in December, boosted by holiday demand and the nation's economic recovery. Outlays at the three biggest chains climbed 11.6% YoY in December, after rising 10.1% YoY in November, the Ministry of Knowledge Economy said in a statement. Sales have increased for 22 consecutive months, according to the ministry's data. (Source: Bloomberg)
Thailand: Export growth slowed in December, a sign the surge in global demand that lifted Asian economies earlier in 2010 may be starting to ease. Overseas sales increased 18.8% YoY last month to USD17.4b after rising 28.5% YoY in November, the commerce ministry said. Exports climbed 28.1% YoY to USD195.3b in 2010. (Source: Bloomberg)
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