Singapore: Raises inflation forecast, watches growth risks
The Monetary Authority of Singapore raised its inflation estimate and pledged to remain vigilant against risks to growth, saying the economy may expand in the lower half of its forecast range. Consumer prices may climb 4% to 5% in 2011, higher than a previous estimate of 3% to 4%, Managing Director Ravi Menon said yesterday. He reiterated a prediction for the economy to expand 5% to 7% this year and said the policy stance of allowing the SGD to appreciate “remains appropriate.” (Bloomberg)
HK: Inflation quickens to fastest pace since 2008
Hong Kong’s inflation accelerated to the fastest pace since July 2008 on rising rental costs and higher prices for pork. Consumer prices increased 5.6% in June from a year earlier, the government said on its website yesterday That compared with a 5.2% gain in May. Financial Secretary John Tsang said last month that he is concerned that the economy may overheat in the long term, leading to “hyperinflation,” as the government grapples with extra liquidity and a real-estate bubble. A currency peg links Hong Kong’s monetary policy to that of the US Federal Reserve, which plans to keep its target interest rate near zero for an “extended period.” (Bloomberg)
Indonesia: FDI up 21% in second quarter
Foreign direct investment (FDI) in Indonesia rose 21% in the second quarter of this year from a year ago, as strong commodity prices attracted investors into the mining sector, the government said yesterday. FDI from April to June was IDR43.1rn (USD5bn), which followed USD4.6bn of foreign investment in the first quarter, the country's investment board (BKPM) said. This took FDI in the first six months to just short of a half of its full year target for a record IDR156trn this year. Last year, foreign investment into Indonesia reached a record IDR148trn. (StarBiz)
Brazil: Signals fifth straight rate increase may be the last
Brazil’s central bank signaled that a fifth straight increase in borrowing costs may be enough to contain inflation running at a six-year high. Policy makers, led by central bank President Alexandre Tombini, increased the Selic rate by a quarter point to 12.5% yesterday. In a one-sentence statement accompanying the decision, the policy makers withdrew a commitment made in April and June to raise rates for a “sufficiently long” period. (Bloomberg)
Japan: Exports fell less than economists expected as the decline in auto shipments slowed, underscoring the recovery of the world's third-largest economy from the March 11 earthquake and tsunami. Exports decreased 1.6% in June from a year earlier, the slowest fall in four months, the Finance Ministry said. Shipments increased 5.4% in June from May on a seasonally adjusted basis, the fastest gain since February. (Source: Bloomberg)
India: Food inflation rate fell to the lowest since March 2009 as grain output surged, an easing that may not be sufficient to prevent the central bank from raising interest rates next week. An index measuring wholesale prices of agricultural products including rice and lentils gained 7.58% in the week ended July 9 from a year earlier, the commerce ministry said in a statement in New Delhi. It gained 8.31% the week before. (Source: Bloomberg)
Singapore: Central bank raised its inflation estimate and pledged to remain vigilant against risks to growth, saying the economy may expand in the lower half of its forecast range. Consumer prices may climb 4% to 5% in 2011, higher than a previous estimate of 3% to 4%, Ravi Menon, the managing director of the Monetary Authority of Singapore, said at a press briefing in the city state. He reiterated a prediction for an expansion in GDP of 5% to 7%.(Source: Bloomberg)
EU: May accept Greek default as leaders intensify crisis fight
Euro-area leaders redoubled efforts to end the 21-month sovereign bond crisis as they erected a firewall around Spain and Italy and risked temporary default to lighten Greece’s debt burden. After eight hours of talks in Brussels, leaders announced EUR159bn (USD229bn) in new aid for Greece late yesterday and cajoled bondholders into footing part of the bill. They also empowered their EUR440bn rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit-lines to repel speculators. (Bloomberg)
E.U: Services and manufacturing growth weakened more than economists forecast to the slowest pace in almost two years, adding to signs the euro-region recovery is losing momentum as the debt crisis persists. A composite index based on a survey of euro-area purchasing managers in both industries fell to 50.8 in July from 53.3 in June, London-based Markit Economics said. A reading above 50 indicates growth. (Source: Bloomberg)
UK: Budget deficit narrowed to GBP14bn in June
Britain’s budget deficit narrowed to GBP14bn in June as a jump in receipts outpaced growth in government spending. The shortfall, which excludes government support for banks, compared with a revised GBP16.6bn in May and GBP13.6bn a year earlier, the Office for National Statistics said in London yesterday. Revenue rose 5.6% and spending grew 4.9%. (Bloomberg)
UK: Retail sales rise as stores cut prices to lure shoppers
UK retail sales rose in June as shops offered discounts to lure consumers squeezed by strengthening inflation and slow wage growth. Sales including fuel rose 0.7% from May, when they dropped a revised 1.3%, the Office for National Statistics said yesterday in London. On the year, sales increased 0.4%. The statistics office said there was “anecdotal evidence” of summer sales starting earlier this year. (Bloomberg)
US stocks advance on optimism Europe will contain debt crisis
US stocks rallied, extending a weekly gain for the Standard & Poor’s 500 Index, as European officials announced EUR160bn (USD230bn) in aid for Greece to stop the region’s debt crisis from spreading. The S&P 500 added 1.4% to 1,343.80, extending its gain this week to 2.1%. The Dow Jones Industrial Average climbed 152.50 points, or 1.2%, to 12,724.41. (Bloomberg)
US: Consumer confidence was little changed, economy view sours
Consumer confidence stagnated last week as Americans’ optimism over their current finances clashed with growing pessimism about the state of the economy. The Bloomberg Consumer Comfort Index was -43.3 in the period to 17 July, the highest since April, compared with -43.9 the prior week. The monthly gauge of the economic outlook improved from a two-year low. Unemployment at 9.2% in June, the smallest payroll gain in nine months, and a foreclosure-ridden housing market are weighing on the outlook for growth. Gasoline prices are rising again after declining in May and June, threatening to further limit consumer purchases, the biggest part of the economy. (Bloomberg)
U.S: Jobless claims rose by 10,000 last week to 418,000. More Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period. Applications for jobless benefits increased 10,000 in the week ended July 16 to 418,000, Labor Department figures showed. The data included about 1,750 additional job cuts due to the Minnesota government shutdown, the agency said. (Source: Bloomberg)
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