20111007 1013 Global Economic Related News.

Vietnam: Central bank increases refinancing rate to 15% from 14%
Vietnam’s central bank increased its refinancing rate for the first time since May to 15% from 14%, as the country tries to fight Asia’s fastest inflation and stabilize its currency. The move will be effective 10 Oct, the central bank in Hanoi said yesterday. It also raised overnight interest rates on electronic transactions to 16% from 14% and cut the rate on dollar deposits that exceed the compulsory reserve of credit institutions at the central bank to 0.05% from 0.1%. Vietnam is struggling to regain investor confidence hurt by inflation that has exceeded 20%. (Bloomberg)

Japan: LDP Calls for Increasing BOJ Assets, More Yen Intervention
The opposition Liberal Democratic Party proposed increasing the Bank of Japan’s asset fund and diversifying the methods of yen intervention to help an economy recovering from the 11 March earthquake and nuclear disaster. Japan’s biggest opposition called for increasing the central bank’s asset-buying fund by JPY10trn (USD130bn) to JPY25trn, according to a document obtained from LDP lawmaker Naokazu Takemoto. It also advocates doubling the government’s USD100bn fund to help companies buy overseas assets by taking advantage of the strong yen. (Bloomberg)

EU: ECB holds benchmark rate at 1.5% at Trichet’s final meeting
The European Central Bank resisted calls to cut interest rates at President Jean-Claude Trichet’s final policy meeting and may opt to use other tools to stem the sovereign debt crisis. ECB officials meeting in Berlin left the benchmark rate at 1.5%. With Greece on the brink of default, the ECB is under pressure to step up efforts to stop contagion by shoring up the euro region’s bond markets and helping banks weather the storm. (Bloomberg)

German: Factory orders unexpectedly fell a second month in August
German factory orders unexpectedly fell for a second month in August as domestic demand waned. Orders, adjusted for seasonal swings and inflation, declined 1.4% from July, when they dropped 2.6%, the Economy Ministry in Berlin said in a statement yesterday. Concerns that Europe’s debt crisis and slowing global growth could drag the economy back into recession may prompt companies to put off investment. European confidence in the economic outlook dropped to the lowest in almost two years last month. (Bloomberg)

UK: Launches fresh GBP75bn stimulus
The Bank of England (BoE) will spend GBP75bn more of newly-created money to shield Britain's economy from the eurozone debt crisis and keep a faltering recovery going, opting for an early, dramatic move to maximise the impact. Yesterday's decision by the BoE to expand its asset purchase programme to a total GBP275bn highlights the precarious state of Britain's economy as global growth slows, government spending cuts and tax hikes bite, and consumers face high inflation and slow wage rises. BoE governor Mervyn King said in a letter to Finance Minister George Osborne that the global economic recovery had slowed, and that the euro debt crisis had created severe strains on financial markets. (StarBiz)

US: Jobless claims climbed less than forecast last week
Claims for US unemployment benefits rose less than forecast last week to a level that shows companies may be starting to slow the pace of dismissals. Applications for jobless benefits increased by 6,000 in the week ended 1 Oct to 401,000. The monthly average dropped to the lowest level since the end of August. Reductions in firings may set the stage for bigger gains in payrolls needed to bring down the unemployment rate, signaling more confidence among companies that demand will hold up. (Bloomberg)

US stocks, Euro advance as Treasuries drop on European debt optimism
US stocks rallied for a third day, commodities gained and Treasuries slid as European officials detailed plans to tame the sovereign debt crisis and reports on retail sales and jobless claims bolstered optimism in the economy. The S&P 500 Index gained 1.8% to 1,164.97 while the Dow Jones Industrial Average rose 1.7% to 11,123.33. The Stoxx Europe 600 Index surged 2.7%. European Central Bank President Jean-Claude Trichet said the ECB will resume covered-bond purchases and reintroduce yearlong loans for banks, while defying calls for an interest-rate cut and acknowledging “downside risks” to the economy have intensified. The European Commission is pushing for a coordinated capital injection for banks to shield them from the fallout of a potential Greek default. (Bloomberg)