Vietnam: Inflation accelerates to 19.78%
Vietnam’s inflation accelerated to a 29-month high in May, adding pressure on officials to raise interest rates further and accept slower economic expansion to tame the fastest consumer-price growth in Asia. Prices rose 19.78% y-o-y, compared with 17.51% in April. That’s the quickest pace since December 2008. Prices rose 2.21% m-o-m. Overall food prices surged 28.34% in May y-o-y, while prices in the category including construction materials jumped 21.07%. (Bloomberg)
Middle East: World Bank says it will lend up to USD 6b to Egypt, Tunisia over the next two years to help them modernize their economies after popular revolts toppled their leaders this year. Support would include USD 4.5b for Egypt, where the International Monetary Fund is also expected to provide a loan, World Bank President Robert Zoellick said on a conference call. The Washington-based bank may also make USD 1b available to Tunisia, in addition to USD 500m in aid announced last month and not yet approved by the lender's board. (Source: Bloomberg)
Japan: Net overseas assets dropped for the first time in two years in 2010 as the yen's appreciation cut the value of those holdings. The value of net assets declined 5.5% YoY to JPY251.5tr (USD3.1tr) at the end of last year, the Finance Ministry said in Tokyo. Japan will remain the world's largest net external asset holder for the 20th year unless China increases its holdings more than 50% from JPY 167.7tr, the ministry said. (Source: Bloomberg)
Japan: Trade deficit as exports slump
Japan had a trade deficit for the first time in three months as exports slumped in the aftermath of the March 11 earthquake and a surge in commodity prices pushed up import costs. The trade deficit was JPY463.7bn (USD5.7bn) in April. Overseas shipments fell 12.5% in April y-o-y and imports rose 8.9%. The median forecast was for a shortfall of JPY703.7bn. (Bloomberg)
EU: German construction, exports drove first-quarter expansion
German companies boosted spending to meet increased export demand in the first quarter, while construction rebounded from a slump in the previous three months, fueling the fastest economic growth in almost a year. Construction spending jumped 6.2% q-o-q, when it fell 2.6%. Exports rose 2.3% after increasing 1.8% in the fourth quarter. GDP increased 1.5% when adjusted for seasonal swings. German consumer spending rose 0.4% in the first quarter q-o-q, when it increased 0.6%. Companies’ equipment spending advanced 4.2% and imports rose 1.5%. Gross fixed capital investment advanced 5% after falling 0.1%. (Bloomberg)
EU: German business confidence remains unexpectedly unchanged
German business confidence remained unexpectedly unchanged in May as booming exports and rising company spending boosted economic growth. The Ifo institute’s business climate index held at 114.2 from April. Economists forecasted a decline to 113.7. A gauge measuring the current assessment rose to 121.4 from 121 in April and a sub-indicator of expectations slipped to 107.4 from 107.7 in the previous month. (Bloomberg)
Spain: Sells EUR 2.3b (USD3.2b) of bills, close to the maximum target, in the first debt auction since the ruling Socialists' defeat in local elections pushed up borrowing costs. The Treasury said it sold EUR 999m of three-month bills at an average yield of 1.38%, compared with 1.371% last time the securities were auctioned in April. It sold EUR1.3b of six-month debt at an average yield of 1.766%, down from 1.867% at the last sale. (Source: Bloomberg)
UK: Budget gap widens to GBP10bn as income falls
Britain posted its largest budget shortfall for any April since monthly records began in 1993 as tax revenue fell and spending climbed, casting doubt on whether the government can meet its deficit-reduction target this year. Net borrowing was GBP10bn, compared with GBP7.2bn a year earlier. The median forecasts was for a shortfall of GBP6.5bn. Revenue fell 0.8%, partly reflecting a one-time boost from a bank bonus tax a year ago, and spending rose 5%. (Bloomberg)
US: New homes sales rose in April for second month
Purchases of new houses rose in April for a second month as the market struggled to recover from a record low. Sales climbed 7.3% to a 323,000 annual pace last month. The median estimate called for sales at a 300,000 annual rate. New houses sold at a 278,000 rate in February, matching the pace in August as the lowest in data going back to 1963. The median sales price increased 4.6% y-o-y to USD217,900. The supply of homes at the current sales rate dropped to 6.5 month’s worth in April, the lowest in a year, from 7.2 months in March. There were 175,000
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