The leading index (LI) increased by 1.9% yoy in Jun (1.7% in May). The coincident index (CI) rose 3.0% (2.2% in May) while the growth of lagging index sustained at 4.2% in Jun (4.1% in May). The diffusion index for LI fell to 14.3% while the diffusion index for CI kept steady at 66.7% in Jun. (Department of Statistics)
Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop yesterday said that a Bloomberg forecast of 3.6% for Malaysia’s 2Q11 GDP was “on the low side”. He added that the first half of the year’s GDP would appear lower due to the “base effect” in comparison to the same period last year.
- “We will do very well in 2H11,” he said, partially due to the base effect and also due to government projects such as the ETP and privatization exercises taking off in a big way.
- He added that the government still expected to achieve the GDP target of 5.0-6.0% for 2011. (Financial Daily)
Although Malaysia's investor sentiment has softened in 2Q11 compared with 2Q10, it is still optimistic, said ING Investor Dashboard sentiment survey. The Malaysian ING Investor Dashboard Sentiment Index dropped to 133 pts in 2Q11 from 141 pts in 2Q10.
- ING Funds Bhd said the survey showed that global uncertainties and rising inflation prompted investors to pick safe-haven and risk-managed investments.
- According to the survey, 50% Malaysian investors said the local economic situation would improve in the next three months compared with 28% who said it would not change while 22% said it would deteriorate.
- Going into 2012, 91% of investors say inflation would likely continue to accelerate next year, it said. (Bernama)
U.S. import prices increased in Jul due to higher fuel, food and industrial materials costs, a government report showed. Rising prices for petroleum, fertilizers, food and consumer goods helped increase import prices 0.3% mom in Jul (-0.6% in Jun), the Department of Labor said. Analysts expected import prices to fall 0.1%. (Reuters)
U.S. housing starts fell 1.5% to a 604,000 annual rate in Jul (613,000 in Jun). This was in line with economists’ forecast, Commerce Department figures showed. (Bloomberg)
U.S. building permits decreased to a 597,000 annual pace in Jul (617,000 in Jun). They were projected to fall to a 605,000 annual rate. (Bloomberg)
U.S. industrial production rose at its quickest pace in seven months in Jul as motor vehicle output rebounded strongly, further easing fears the economy could slide into recession. Other data showed residential construction, while still depressed, was not a drag on the economy as 2H got under way. Industrial output increased 0.9% in Jul (+0.4% in Jun), the Federal Reserve said. Economists expected a 0.5% rise. (Bloomberg)
U.S. capacity utilization rate for total industry climbed to 77.5%, a rate 2.2% pts above the rate from a year earlier but 2.9% pts below its long-run (1972-2010) average. (Bloomberg)
Both eurozone GDP grew by 0.2% qoq in 2Q (+0.8% in 1Q), according to a report released by Eurostat. This may hint at some slowdown in economic growth. On a yoy basis, seasonally adjusted GDP increased by 1.7% in 2Q (2.5% in 1Q). Economists expected Eurozone GDP to rise by 0.3% qoq and 1.8% yoy in 2Q. (Xinhua, Bloomberg)
The euroarea trade with the rest of the world gave a EUR0.9bn surplus in Jun 11 (+EUR0.7bn in Jun 10). The May 11 balance was +EUR0.2bn, compared with -EUR4.9bn in May 10. On a mom basis, seasonally adjusted exports fell by 4.7% and imports by 4.1%. (Eurostat)
China will achieve a “soft landing” even as growth moderates after the government tightened monetary policy, the Conference Board said as its main indicator for the economy rose. The researcher’s leading economic index for China increased 1% in Jun, it said in a release. The index climbed 0.6% in May and 0.3% in Apr. (Bloomberg)
Fitch Ratings affirmed its AAA credit rating for the U.S. and said the outlook is stable, citing the nation’s central role in the global financial system and the flexible, diverse economy. Fitch had put the rating under review after lawmakers reached a compromise 2 Aug on a debt-limit agreement that prevented a U.S. default. (Bloomberg)
China boosted its holdings of U.S. government debt for a third straight month to US$1.17tr in Jun, while other foreign investors were sellers of Treasuries for the first time since 2009. Investors in the Asian nation raised their note and bond holdings by US$1.655bn to a record US$1.16tr and added US$1.57bn of bills to US$4.55bn, according to the Treasury Department data released. Total holdings rose 0.5% in the month and the bill purchases were the first since Jan. (Bloomberg)
China’s foreign direct investment rose 19.8% yoy to US$8.3bn in Jul, stoking the expansion of the fastest-growing major economy. For the first seven months of the year, the increase was 18.6% to US$69.2bn, the Ministry of Commerce said. (Bloomberg)
International Monetary Fund’s new managing director Christine Lagarde urged policy makers to include measures to support economic growth in the short term as they implement fiscal tightening plans under market pressure. “For the advanced economies, there is an unmistakable need to restore fiscal sustainability through credible consolidation plans,” Lagarde wrote in the Financial Times. “At the same time we know that slamming on the brakes too quickly will hurt the recovery and worsen job prospects.” (Bloomberg)
Thailand’s newly-appointed Energy Minister Pichai Naripthaphan vowed to proceed with the planned channelling of international reserves for commodity investment. Pichai said that Pheu Thai Party's economic team will soon seek a discussion with the Bank of Thailand over the investment of international reserves, to increase gains on commodities prices amid declining value of US dollar. He noted that Thailand can maintain reserves of only 5-6 months of export value, and the rest could be invested. (Bangkok Post)
Thailand’s Ministry of Energy is prepared to implement the policy to lower the collection towards the Oil Fund within Sep while eyeing a short-term loan as compensation for the fund’s lost earnings. Energy Minister Pichai Naripthaphan asserted that the policy to cut the amount collected towards the State Oil Fund would be carried out as already promised to the Thai people. Despite disagreement by academics and oil distributors, he said the decrease would begin this Sep, which would in turn cause domestic oil prices to drop. (Thai Financial Post)
Thailand’s cabinet has approved the policies to raise the minimum wage to THB300/day and the salary for fresh graduates to THB15,000/month, both of which will be treated as urgent issues by the Labor Ministry. (Thai Financial Post)
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