Singapore: Output misses estimates on electronics slump
Singapore’s industrial production grew less than economists estimated in February as a slump in electronics output persisted. Manufacturing rose 12.1% from a year earlier after a revised 9.6% decline in January, the Economic Development Board said. The median of 13 economists surveyed by Bloomberg News was for a 16.2% gain. (Bloomberg)
Thailand: Finance Ministry raises growth forecast, sees rate rise
Thailand’s Finance Ministry raised its 2012 growth forecast and predicted interest rates will rise, less than a week after Deputy Prime Minister Kittiratt Na-Ranong urged the central bank to ease monetary policy. GDP is estimated to grow between 5% and 6%, with a midpoint forecast of 5.5%, Somchai Sujjapongse, head of the fiscal policy office, told a news conference in Bangkok. The ministry predicted earlier the economy would grow about 5% this year. (Bloomberg)
India: Mukherjee cash boost sends SBI yield to August low
Borrowing costs for India’s biggest banks have dropped to a seven-month low after the government proposed to invest USD3.2bn in state-owned lenders. Yields on State Bank of India’s dollar-denominated notes due 2014 declined 14 basis points this month to 3.33% as Finance Minister Pranab Mukherjee unveiled plans for a holding company to inject the capital. (Bloomberg)
Germany: Business confidence unexpectedly gained in March
German business confidence unexpectedly rose to an eight-month high in March, suggesting Europe’s largest economy will return to growth even as the sovereign debt crisis curbs euro-area demand for its exports. The Munich-based IFO institute said its business climate index, based on a survey of 7,000 executives, increased to 109.8 from a revised 109.7 in February. Economists forecast it would remain unchanged at the initial February reading of 109.6, according to the median of 44 estimates in a Bloomberg News survey. (Bloomberg)
EU: Draghi says governments must continue to take decisive measures
ECB President Mario Draghi said euro-region governments should continue to take decisive measures after the central bank’s liquidity provisions helped restore investor confidence. Draghi said that while the ECB’s injection of more than 1.0trn euros ($1.3trn) into the banking system has calmed markets, no single institution can carry the burden of addressing a set of challenges that are simultaneously economic, financial and fiscal. Finance ministers from the 17 nations will meet in Copenhagen on Mar 30 and Chancellor Angela Merkel gave her first indication Monday that she is prepared to allow an increase in the debt-crisis firewall, saying that Germany could let the temporary and permanent rescue funds run in parallel. Merkel cited fragility in Spain and Portugal as she revealed Germany’s position on addressing the future backstop. (Bloomberg)
US: Pending sales of US existing homes hold near two-year high
The number of Americans signing contracts to buy previously owned homes held in February near an almost two-year high, a sign that the real estate market may be stabilizing. The index of pending home purchases fell 0.5% to 96.5 after a 2% increase the prior month, the National Association of Realtors said. January’s reading of 97 was the highest since April 2010. The median forecast of 41 economists surveyed by Bloomberg News called for a 1% rise. (Bloomberg)
US: Bernanke says accommodative policy needed to cut joblessness
Federal Reserve Chairman Ben S. Bernanke said while he’s encouraged by the unemployment rate’s decline to 8.3%, continued accommodative monetary policy will be needed to make further progress. Stocks rallied as some investors bet Bernanke’s comments indicate further policy easing is still under consideration. The Federal Open Market Committee on 13 March raised its assessment of the economy while repeating that interest rates are likely to stay low at least through late 2014. (Bloomberg)
US: Services displace factories in driving expansion
Service producers are taking over from manufacturing as the driver of the almost 3-year-old US expansion. The end of the recession in Jun 2009 triggered the biggest surge in production in a decade, propelled by rising demand from overseas and the need to replenish inventories and upgrade equipment. That is now giving way to increasing sales at places like restaurants, transportation companies and temporary-help agencies, leading to gains in employment that have bolstered the world’s largest economy. (Bloomberg)
US: Survey shows Fed more effective with inflation, funds rate goals
The Federal Reserve’s decision to spell out the optimal rate at which prices should increase in the US and the possible trajectory of its benchmark interest rate will make policy more effective, a survey showed. Almost 7 of every 10 members polled by the National Association for Business Economics said the central bank’s plan to keep inflation rising at around 2.0% over the long term will improve the effectiveness of monetary policy. Six of ten said releasing projections for changes in the so-called federal funds rate will also help. Conversely, respondents were almost evenly split on whether the federal government was doing too much, too little or just enough to boost the economy, reflecting the lack of consensus among voters heading into a presidential election. When asked about specific policies, like extending the payroll tax cut or the credit on business investment, a majority supported the measures. (Bloomberg)
US stocks advance following Bernanke’s comments
US stocks advanced, sending the Standard & Poor’s 500 Index to the highest level since May 2008, after Federal Reserve Chairman Ben S. Bernanke said that accommodative monetary policy is still needed to spur jobs. The S&P 500 advanced 1.4% to 1,416.51, erasing last week’s loss and posting the fourth-biggest gain of 2012. The Dow Jones Industrial Average added 160.90 pts, or 1.2%, to 13,241.63 yesterday. Equities rose as Bernanke said in a speech that while he’s encouraged by the unemployment rate’s decline, the economy still needs help. The number of Americans signing contracts to buy previously owned homes held in February near an almost two-year high, a sign that the real estate market may be stabilizing. (Bloomberg)
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