More than 9bn cubic meters of water released this month from dams filled to capacity have swept down a river basin the size of Florida, inundating seven industrial parks that helped transform Thailand from an agriculture-based economy to a manufacturing hub since the first one was built four decades ago. The worst floods since 1942 have shuttered 10k factories, put 660k jobs at risk and caused damage of THB140bn, government figures show. Factory owners are concerned the disaster may repeat itself as water defenses fail to keep pace with the development of roads, housing estates and business complexes in Bangkok and its vicinity, which accounts for about half of Thailand’s industrial output. (Bloomberg)
Thailand: The central bank lowered its growth forecasts as floods began overwhelming the capital of Southeast Asia's second-largest economy, raising the odds of an interest-rate cut in the coming months. The economy may expand 2.6% YoY this year from a previous prediction of 4.1% YoY, the Bank of Thailand said in Bangkok, adding that forecasts may be lowered further in November. The central bank cut its estimate for inflation this year, while raising consumer-price forecasts for 2012, Assistant Governor Paiboon Kittisrikangwan said. (Source: Bloomberg)
Australia: TD 12-month inflation gauge slows as food costs drop
Australia’s annual inflation rate slowed in October for a third straight month on declining costs for fruit and vegetables, rent and furniture, a private report showed. Consumer prices rose 2.6% this month from a year earlier, compared with a 2.8% annual gain in September, according to an index compiled by TD Securities Inc and the Melbourne Institute released in Sydney. The central bank aims to keep annual inflation in a 2% to 3% range on average. Prices rose 0.1% in October from a month earlier after a 0.1% rise in September. (Bloomberg)
China: Online sales seen tripling driving warehouse surge, retail
China’s largest online retailers expect sales to as much as triple next year, setting off a rush for warehouse space that’s pushing up rents in the world’s fastest-growing major economy. “Everyone wants more warehouses,” Ji Wenhong, CEO of luxury goods seller xiu.com, said in an interview. “Any warehouse bigger than 20k square meters will be leased the second it’s out on the market.” Wal-Mart Stores Inc.-backed Yihaodian is looking for more space in anticipation of need. 360buy.com, China’s second- largest e-commerce company by sales, plans to invest as much as CNY6bn over the next three years to build seven distribution centers. (Bloomberg)
South Korea: Output rises as exports resist global slowdown
South Korea’s industrial production rose last month after two straight declines as exports of cars and semiconductors withstood the global slowdown. Output gained 1.1% last month from August, when it dipped 1.9%, Statistics Korea said. The median estimate of eight economists in a Bloomberg News survey was for a 0.4% decline. Production rose 6.8% from a year earlier after gaining a revised 4.7% gain in August. South Korea’s economic growth slowed in the third quarter as Europe’s debt crisis and a faltering US recovery prompted companies to reduce spending. (Bloomberg)
Japan: Industrial production fell more than analysts expected in September. Factory output slid 4% MoM in September from the previous month, the trade ministry said in a report in Tokyo, the first decline since the disaster. (Source: Bloomberg)
EU: Italy’s borrowing costs rise to Euro-era record at bond auction
Italy’s borrowing costs rose to a euro-era record at a sale of 3-year bonds, driving yields higher on concern that efforts to contain the sovereign crisis won’t be enough to safeguard the region’s third-largest economy. The Rome-based Treasury sold EUR3.08bn (USD4.36bn) of 2014 bonds to yield 4.93%, the highest since November 2000, and up from 4.68% on 29 Sept. Italy’s bonds extended declines after the sale, while German bunds pared most of their earlier losses. (Bloomberg)
EU: German bonds fall for 2nd day on EU optimism; Italy bonds drop
Germany’s bonds fell for a second day, extending a weekly decline, as optimism Europe will contain its debt crisis fueled an advance in stocks and damped demand for safer investments. Two-year German notes were poised for their first monthly drop since June. Top-rated bonds also declined before a report that economists said will show US consumer confidence increasing, easing concern the global economy is stalling. Italian 10-year debt fell after the government sold notes and bonds, the first offering since European Union leaders ended an all-night summit in Brussels. (Bloomberg)
Greece: Fitch says 50% bond haircut would be default event. "The 50% nominal haircut on the proposed bond exchange would be viewed by the agency as a default event under its Distressed Debt Exchange criteria," the statement said. While the accord is "a necessary step to put the Greek sovereign's public finances on a more sustainable footing," Greece will face "significant challenges" including ratios of government debt to gross domestic product at "well over 100% even in a positive scenario." (Source: Bloomberg)
Russia: Leaves interest rates unchanged to cap lending growth. Bank Rossii held the refinancing rate at 8.25% after two increases this year. The overnight auction-based repurchase rate remained at 5.25% and the deposit rate was left at 3.75%. (Source: Bloomberg)
US: Economy revives as consumer shows what’s done refutes sentiment
Americans’ urge to shop is overriding anxiety about the economy. While household-sentiment measures are at levels typically observed during a recession, an increase in spending during the third quarter boosted growth to the highest level of the year, Commerce Department figures showed on 27 Oct. The schism partly reflects consumer ire with the government’s failure to reduce 9.1% unemployment or stem rising deficits, said James Paulsen, chief investment strategist at Minneapolis based Wells Capital Management. (Bloomberg)
U.S: Michigan consumer sentiment index rises to 60.9 in October from 59.4 in September. The gauge was projected to drop to 58. The preliminary reading for the month was 57.5. (Source: Bloomberg)
U.S: Consumer spending increased 0.6% MoM in September, after a 0.2% MoM gain the prior month. Incomes rose less than projected, sending the savings rate down to the lowest level in almost four years. (Source: Bloomberg)
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