South Korea: Current-account surplus widens to one-year high
South Korea’s current-account surplus widened to a one-year high in October as exports withstood weakening global demand and imports declined. The surplus was USD4.23bn, compared with a revised USD2.83bn in September, the Bank of Korea said in a statement. The current account is the broadest measure of trade, tracking goods, services and investment income. (Bloomberg)
China: Exports to Europe ‘falling off cliff’
Slumping shipping costs show exports to Europe from China are “falling off a cliff” as the euro- region crisis chokes off consumer spending. The chart of the day shows how the cost of hauling goods to Europe from China is falling faster than rates for deliveries to the US. The price for shipments to Europe is down 39% to USD511 per twenty-foot box since 31 Aug. That’s more than double the 18% slide in the cost to the US West Coast, measured in 40-foot units. (Bloomberg)
Japan: Global slowdown hits Japan as unemployment rate surges
Japan’s jobless rate surged by more than the predictions of 29 economists, adding pressure on the central bank to expand stimulus as Europe’s debt crisis deepens and gains by the yen impede the nation’s recovery. The unemployment rate increased to 4.5% in October from 4.1% in September, the statistics bureau said. Panasonic Corp. and TDK Corp are cutting jobs as a yen near a post World War II high against the dollar erodes profits and the nation struggles to recover from the March earthquake. Bank of Japan Governor Masaaki Shirakawa indicated yesterday that JPY55trn (USD708bn) of credit and asset-buying programs will be expanded if necessary. (Bloomberg)
EU: Euro-Region economic confidence falls to two-year low
European confidence in the economic outlook dropped more than economists forecast in November as the 17-nation euro region edged closer to a recession and the fiscal crisis started to hit larger countries. An index of executive and consumer sentiment in the euro area fell to 93.7 from 94.8 in October, the European Commission in Brussels said. That’s the lowest since November 2009. Euro-area finance chiefs meeting in Brussels today are under increasing pressure to step up their crisis response as the two-year sovereign debt crisis spreads from the periphery to core countries, clouding growth prospects. Services and manufacturing contracted in November and the European Central Bank this month unexpectedly trimmed borrowing costs. (Bloomberg)
EU: EFSF gets Ministers’ approval for expansion of its capacity
Euro-area finance ministers have agreed to extend the capacity of the European Financial Stability Fund by “introducing sovereign bond practical risk participation and a co-investment approach,” the EFSF said in an e-mailed statement. The EFSF has a current lending capacity of EUR440bn. Without knowing the exact amounts needed, EFSF should be able to leverage its own resources of up to EUR250bn, the statement said. The options are “designed to enlarge the capacity of the EFSF so that the new instruments available to the EFSF can be used efficiently,” the statement cites Klaus Regling, EFSF CEO, as saying. Under the partial-risk protection, EFSF would provide a partial-protection certificate to a newly issued bond of a member state, the statement said. (Bloomberg)
US: Jump in US consumer confidence exceeds forecasts
Consumer confidence snapped back more than forecast in November as Americans turned less pessimistic on the outlook for jobs and wages, one reason why spending has jumped at the start of the holiday season. The Conference Board’s index increased to 56 from a revised 40.9 reading in October, the biggest monthly gain since April 2003. The improvement in sentiment may help sustain household purchases, which account for about 70% of the economy, after sales climbed on 25 Nov and 28 Nov, so-called Black Friday and Cyber Monday. Another report showing home prices continue to drop raises the risk that, without a pickup in hiring, consumers will retreat in early 2012. (Bloomberg)
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