IMF chief Christine Lagarde warned that crude oil prices may spike by up to 30% if Iranian supplies were disrupted, causing "serious consequences" for the global economy. (AFP)
US: US housing heals as starts near 3-year high
Housing starts in the US hovered in Feb near a 3-year high and building permits rose, adding to signs that the industry at the heart of the last financial crisis is stabilizing. Commerce Department figures showed that builders broke ground on 698,000 homes at an annual rate, in line with the median forecast of economists surveyed by Bloomberg News and down 1.1% from a Jan pace that was stronger than previously reported. Building permits, a proxy for future construction, climbed to the highest level since October 2008. The median estimate in a Bloomberg survey of 80 economists called for a rise to 700,000. Estimates ranged from 650,000 to 775,000. The prior month was revised up to 706,000, the highest since October 2008, from a 699,000 pace. (Bloomberg)
US housing starts fell 1.1% mom in Feb (3.7% in Jan) to stand at 698,000 (a revised 706,000 in Jan), falling short of consensus expectations of a 700,000 rate. Permits rose 5.1% to 717,000 (a revised 682,000 in Jan), exceeding the median forecast of 700,000. (Bloomberg)
Federal Reserve Chairman Ben Bernanke said Europe's financial troubles have eased, but added the central bank would be ready to act if conditions worsened again. (Reuters)
US Treasury Secretary Timothy Geithner does not think the Volcker rule ban on proprietary trading will present a “meaningful risk” to liquidity or credit availability in European countries. (Bloomberg)
EU: Monti risks strikes to revamp Italy’s labor market
Italy's Prime Minister Mario Monti will impose a plan to ease firing rules, risking strikes and protests, as he seeks an overhaul of Italy’s labor markets to fuel the economic growth needed to trim Europe’s second-biggest debt. Monti told unions and employers Tuesday night in Rome there would be no more discussion of his plan to allow companies more leeway to fire workers when economic times turn bad. The government may pass the measure by decree, meaning the plan would be enacted immediately before securing parliamentary passage. With unemployment at a decade-high 9.2%, convincing unions that easing firing rules will help create jobs has been a tough sell. (Bloomberg)
Greece: Parliament approves new bailout deal
Greece's Parliament has approved a new international bailout deal, which will see the crisis-hit country receive an additional EUR172bn in rescue loans. Lawmakers backing the coalition government of socialists and conservatives voted early Wednesday in favour of the new agreement, after the Communist Party staged nationwide protests against the deal. (Bloomberg)
Spain: Banks’ bad loan ratio increased to 7.91% in January
Spanish banks’ bad loans as a proportion of total lending jumped in January to the highest level since 1994 as the country’s recession and rising unemployment forced more borrowers to miss loan payments. The bad-loans ratio climbed to 7.91% from 7.62% in December and 6.06% in the same month a year earlier, the Bank of Spain said. Lending fell 3.1% in January from a year ago and deposits dropped 4.2%. (Bloomberg)
UK: Inflation slows less than forecast on alcohol, food
UK inflation slowed less than economists forecast in Feb as prices for alcohol and some foods offset declines in electricity and gas costs. The Office for National Statistics said consumer prices rose 3.4% from a year earlier, the least since Nov 2010, compared with 3.6% in Jan. The median estimate of 36 economist forecasts was for a reading of 3.3% last month, according to a Bloomberg News survey. (Bloomberg)
China: Record profits at Chinese banks marred by climbing loan defaults
China’s biggest banks, set to post record profits for a fifth year, may report 2011 results marred by an increase in bad loans as an economic slowdown and faltering property market trigger defaults by borrowers. Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four biggest local rivals may post a 15% increase in combined fourth-quarter net income when they report this month, according to analyst estimates compiled by Bloomberg. Their non-performing loans rose for the first time since the 3Q 2008, the banking regulator said last month. (Bloomberg)
China: Hikes fuel prices by biggest margin in three years
China on Tuesday hiked fuel prices by the biggest margin in nearly three years after a surge in the cost of global crude. The rise is the second this year and comes as the government has more leeway to adjust price levels while inflation eases from three-year highs seen in mid-2011. The benchmark retail price for petrol will rise by CNY0.44 per litre while the price for diesel rises by CNY0.51. (Bloomberg)
Profits for Chinese state-owned enterprises (SOEs) fell 10.9% yoy to reach Rmb363.5bn (US$57.7bn) during the first two months. Revenues grew 9.9% yoy to Rmb7.5tr during the same period. The SOEs turned in taxes of Rmb736.55bn, up 16% yoy. (Xinhua)
Taiwan: Sees record export orders for February
The value of Taiwan's export orders in February surpassed USD30bn this year for the first time, boosted by strong demand for laptops, smartphones, and tablets, according to government figures released Tuesday. Export orders, an indication of shipments in the next one to three months, totaled USD33.95bn in February, up 17.6% y-o-y. Compared with the previous month, the value also showed an increase, rising 7.84% or USD2.47bn. (Bloomberg)
The Bank of Thailand is issuing bonds with longer maturities ranging from about six months to three years to reduce local market volatility caused by foreign capital inflows. (Bangkok Post)
Thai vehicle sales in Feb hit a new record high of 90,461 units, representing a 17.2% yoy increase. For the first two months of 2012, combined vehicle sales reached 166,707 units, up 14.5% yoy. (The Nation)
IMF Asia-Pacific Department director Anoop Singh opines that growth of Asia as a whole continues to be resilient, with emerging Asia growing “about 7%” and China and India “7-8%.” He also concurred with the Bank of Thailand’s assessment of the nation’s recovery, saying “it is going to be a strong period” of “good recovery.” (The Nation)
Global: Naimi says Saudi Arabia can raise output 25% if needed
Saudi Arabia’s oil minister said the country can increase crude production by as much as 25% immediately if needed, seeking to allay the concern over supplies that has driven prices to the highest in 3 years. Brent crude has gained 15% in London this year to about $124 a barrel. Iran has threatened to shut the Strait of Hormuz at the entrance to the Persian Gulf, a transit point for a fifth of the world’s traded oil, in response to sanctions on its crude exports imposed over its nuclear program. The minister said Saudi Arabia has excess capacity of 2.5m barrels a day, which makes up the bulk of spare capacity in the Organization for Petroleum Exporting Countries. International Energy Agency said as much as 1m barrels a day of exports from Iran, the second-biggest OPEC member, may be lost as embargoes enforced by the US and Europe hinder consumers from buying its oil. (Bloomberg)
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