China: Record bank lending may spur Fitch rating downgrade
China’s debt rating may be cut for the first time in 12 years after a record jump in lending added to risks that bad loans will overwhelm banks in the world’s fastest-growing major economy. Fitch Ratings lowered its outlook on China’s AA- long-term local-currency rating to “negative” from “stable,” citing a “high likelihood of a significant deterioration” in banks’ asset quality within three years. The outlook on China’s A+ foreign-currency rating remains stable, London-based Fitch said in a statement. (Bloomberg)
Japan: Cut its economic assessment as earthquake damage mounts
The Japanese government cut its assessment of the economy for the first time in six months after the 11 March earthquake killed more than 12,000 and led to the worst nuclear crisis since Chernobyl. “Although the Japanese economy was picking up, it has shown weakness” since the temblor, the Cabinet Office said in a report yesterday in Tokyo. A power shortage that resulted from a crippled nuclear facility, delays in resolving supply chain disruptions and rising oil prices threaten to depress growth further, it said. (Bloomberg)
Japan: Producer prices rise more than forecast in March after quake. The costs companies pay for energy and unfinished goods gained 2.0% YoY in March, the sixth straight month of increases, after climbing 1.7% YoY in February. (Source: Bloomberg)
South Korea: Central bank increases its inflation forecast
South Korea’s inflation will probably accelerate more than previously forecast while economic growth stays in line with expectations, the Bank of Korea said. Consumer prices may increase 3.9% in 2011, faster than the previous estimate of 3.5%, the central bank forecast in a statement in Seoul today. Gross domestic product is projected to expand 4.5% this year and 4.8% in 2012 after a 6.2% gain in 2010, it said. The bank predicted in December growth of 4.7% for next year. (Bloomberg)
UK: March jobless claims unexpectedly rise on benefit rules
UK jobless claims unexpectedly rose in March, led by women as a change in benefit rules pushed people into the labor market. Jobless benefit claims rose by 700 from February to 1.451m, the Office for National Statistics said yesterday in London. That compared with the median forecast of 22 economists in a Bloomberg News survey for a drop of 3,000. Unemployment measured by International Labour Organization methods slipped to 7.8% in the quarter through February from 7.9% in the three months through November. (Bloomberg)
EU: Italy to sell debt as contagion stops at Portugal
Italy auctions as much as EUR6bn (USD8.7bn) of debt yesterday, the first bond sale by a so- called peripheral euro-region nation to test whether Portugal’s bailout has halted contagion from Europe’s debt crisis. Investors charge Italy about 3.75% to borrow for five years, compared with 4.4% for Spain, more than 10% for Portugal and 15% for Greece. Portugal announced on 6 April that it was seeking a rescue package, a year after Greece sought aid, becoming the third EU country to seek help. (Bloomberg)
EU: Industrial output growth accelerated in February
European industrial production growth accelerated in February, led by demand for intermediate and capital goods, indicating that the economy is gathering strength. Production in the 17-member euro area rose for a fifth straight month, increasing 0.4% from January, when it advanced 0.2%, the European Union’s statistics office in Luxembourg said yesterday. European manufacturers have fueled the region’s recovery from stalling growth in the fourth quarter as surging export demand prompted companies to boost hiring and spending, helping offset the impact of tougher austerity measures. (Bloomberg)
EU: French inflation quickened in March, adding to ECB pressure
French inflation accelerated in March and German wholesale prices jumped the most in almost three decades, adding pressure on the European Central Bank to continue raising borrowing costs. French consumer prices, calculated using a harmonized European Union method, increased 2.2% from a year earlier after rising an annual 1.8% in February, Paris-based national statistics office Insee said yesterday. That’s the biggest gain since October 2008. German wholesale-price inflation quickened to 10.9%, the fastest since 1981. (Bloomberg)
US: Job openings rose 352,000 in February to 3.09m
Job openings in the U.S. increased in February by the most since December 2004, a sign companies are turning more optimistic about hiring. The number of positions waiting to be filled rose by 352,000 to 3.09m, the Labor Department said yesterday in a statement posted on its website. The number of people hired and the number of workers fired also increased. Private payrolls rose by 230,000 in March, capping the strongest two-month gain since 2006, Labor Department data showed 1 April. Hiring must accelerate and continue to broaden out across industries to restore the more than 8.75m jobs lost as a result of the recession. (Bloomberg)
US: Retail sales rise for ninth straight month
Sales at US retailers rose in March for a ninth consecutive month, easing concern that the jump in food and fuel costs would cause consumers to retrench. Purchases increased 0.4% following a 1.1% February gain that was larger than previously estimated, Commerce Department figures showed yesterday in Washington. Declining unemployment and a cut in payroll taxes for 2011 are helping sustain sales at chains like Macy’s Inc. and Saks Inc. At the same time, mounting gasoline and grocery bills are eroding confidence and straining paychecks, making it likely consumer spending, the biggest part of the economy, cooled in the first quarter from the final three months of 2010. (Bloomberg)
U.S: Economy expands as labor markets improve, Fed says. "While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors," the Fed said in its Beige Book report in Washington. While higher commodity costs compelled sellers to try to raise prices, pressures to increase wages were "weak or subdued." (Source: Bloomberg)
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