US stocks slumped, giving the S&P 500 Index its longest decline since September, amid concern the US government will be forced to submit to USD1.2trn in automatic spending cuts. The S&P 500 fell 1.9% to 1,192.98 pts while the Dow Jones Industrial Average declined 2.1% to 11,547.31 pts. The super committee, created to cut the deficit, said after the close of US exchanges that it failed to reach a deal. (Bloomberg)
U.S: Lawmakers on debt panel say they fail to agree on cuts. A special debt-reduction committee in the U.S. Congress failed to reach agreement, extending partisan gridlock into the 2012 election year and setting the stage for USD 1.2tr in automatic spending cuts. "After months of hard work and intense deliberations, we have come to the conclusion that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline," panel co-chairmen Representative Jeb Hensarling of Texas and Senator Patty Murray of Washington said in an emailed statement. (Source: Bloomberg)
U.S: Ratings affirmed by S&P, Moody's after supercommittee fails. S&P, which stripped the U.S. of its top AAA grade on Aug. 5, said the supercommittee's inability to reach agreement didn't merit another downgrade because the inaction will trigger USD 1.2tr in automatic spending cuts. The deliberations were "not decisive," Moody's spokesman Eduardo Barker said in an email after the panel issued a statement. (Source: Bloomberg)
U.S: Sales of existing homes unexpectedly increase in October. Purchases increased 1.4% MoM to a 4.97 million annual rate, the National Association of Realtors said. The median house price dropped 4.7% YoY, and the number of properties for sale was the lowest for any October since 2005. (Source: Bloomberg)
E.U: ECB stepped up bond purchases last week as debt crisis worsened. The Frankfurt-based ECB said it settled EUR 7.99b (USD 10.8b) of bond purchases in the week through Nov. 18, up from EUR 4.48b the previous week. Some EUR 131m of acquired bonds matured. The central bank will take seven-day term deposits to absorb the EUR 194.5b of liquidity created since its bond program started on May 10 last year, a practice it employs to ensure the purchases don't fuel inflation. (Source: Bloomberg)
U.K: Home sellers cut asking prices by the most in a year this month as the escalation of the euro-area debt crisis deterred buyers and increased uncertainty about the outlook for the economy, Rightmove Plc said. Average asking prices in England and Wales fell 3.1% MoM from October to GBP 232,144 (USD367,650), the biggest monthly drop since November 2010. A separate British Retail Consortium study showed consumer visits to U.K. stores dropped in the quarter through October. (Source: Bloomberg)
China: Moody's say reforms of valued-added tax are "credit positive" for the nation. A pilot program in Shanghai starting Jan. 1 is a step toward easing burdens on the private sector and moving away from an "export-oriented, state-owned-enterprise growth model," Moody's said in an emailed report. (Source: Bloomberg)
Thailand: 3Q 2011 GDP came in at 3.5% YoY and 0.5% QoQ (2Q 2011: 2.7% YoY, 0.0% QoQ), but was far short of expectations (4.5% YoY, 1.5% QoQ). Our KimEng Thai Research expects 4Q 2011 GDP to contract by 2.8% YoY, giving a full-year growth of just 1.8% before picking up to 3.5% in 2012. Official forecast by the National Economic and Social Development Board (NESDB) for 2011 was slashed to 1.5% from 3.5%-4% previously, implying a 3.7% contraction in 4Q 2011, followed by 4.5%-5.5% expansion in 2012. Bank of Thailand may cut interest rate by as much as 50bps to 3% at its upcoming monetary policy meeting on 30 Nov. (Source: Bloomberg, Maybank IB, KimEng Thailand)
Japan: Exports fall as China sees prolonged world slump
Japanese exports dropped more than forecast in October, Singapore said its growth may slow to 1% next year and China signaled the global economy faces an extended slide. The reports may raise pressure on policy makers in export-reliant Asia to implement further stimulus measures. A record of the Bank of Japan’s 27 Oct meeting showed one board member favored adding JPY10trn (USD130bn) in asset purchases, and Chinese Vice Premier Wang Qishan said his nation must adopt more “forward looking” and flexible monetary policy. [Bloomberg]
New Zealand: First annual migration decline since 2001
More migrants left New Zealand than arrived for the seventh month in the past eight, after residents were uprooted by an earthquake in the South Island city of Christchurch. Permanent departures exceeded arrivals by 650 in October, Statistics New Zealand said in Wellington. In the year to 31 Oct, there were 103 net departures, the first time annual departures exceeded arrivals since Sept 2001. The decline in migration adds to signs that New Zealand’s economy isn’t able to match the job opportunities and wages of nations such as Australia, which attracted three-quarters of the citizens who left. [Bloomberg]
Sri Lanka: Plans to devalue Rupee and implement tax cuts to spur growth
Sri Lanka said it will devalue its rupee to boost exports as the government unveiled tax-cut plans for some industries to spur economic growth as the global recovery falters. The central bank will depreciate its rupee by 3% from today, Governor Ajith Nivard Cabraal said in a telephone interview in Colombo after President Mahinda Rajapaksa made the announcement in his budget speech yesterday. Rajapaksa also said he will raise salaries for civil servants and increase government spending in 2012. [Bloomberg]
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