20120515 1025 Global Economy Related News.

Asian economies are better shielded from Europe's financial woes than other regions and China is unlikely to undergo a "hard landing" despite recent gloomy data, credit watchdog Fitch Ratings said. (AFP)

Car sales in China rose 12.5% yoy in Apr, more than double the pace in Mar as consumers trickled back to the showrooms ahead of the Labour Day holiday. (Reuters)

Japan: To experience power shortages this summer, panel says
Kansai Electric Power Co. and two other Japanese utilities may have power shortages this summer without supplies from nuclear reactors, a government panel said. Kansai Electric, the utility most dependent on nuclear power, may face the biggest shortage of 14.9%, the independent committee said in a draft report published 12 May. Kyushu Electric Power Co. and Hokkaido Electric Power Co. may have shortages of 2.2% and 1.9%, the report said. (Bloomberg)

Japan’s machine tool orders rose 0.5% yoy in Apr (1.6% in Mar), whilst on a mom basis, the measure fell 6.8% (+11.9% in Mar). (Bloomberg)

Japanese bank loans outstanding rose 0.56% yoy in Mar (0.82% in Feb). (Bloomberg)

Japan’s corporate goods prices fell 0.2% yoy in Apr (+0.5% in Mar), whilst on a mom basis, the measure grew 0.3% (0.5% in Mar). (Bloomberg)

India’s wholesale price index rose 7.23% yoy in Apr (6.89% in Mar), well above the 6.67% median estimate of economists as prices of most commodities rose. (WSJ)

India: Inflation quickens, curbing room for cutting rates
Indian inflation unexpectedly accelerated in April, crimping the central bank‟s scope to bolster economic growth by extending interest-rate cuts. Stocks fell, reversing earlier gains. The benchmark wholesale-price index rose 7.23% from a year earlier, after climbing 6.89% in March, the Ministry of Commerce and Industry said in a statement in New Delhi today. The median of 32 estimates in a Bloomberg News survey was for a 6.67% gain. Reserve Bank of India Governor Duvvuri Subbarao signaled last month that inflation might limit the room for further cuts after he slashed the benchmark rate by half a percentage point, flagging price risks from the fiscal deficit, energy costs and a weaker rupee. (Bloomberg)

Indonesia’s domestic auto sales improved to 87,080 units in Apr from 87,918 units in Mar (Bloomberg)

EU: Germany's Merkel suffers loss in state election
German Chancellor Angela Merkel suffered a big defeat in an election in the state of North Rhine-Westphalia on Sunday. The center-left Social Democrats won 38.9% of the vote, allowing the party to form a majority with the Greens, in elections in the country's most populous state, according to exit polls. Merkel's Christian Democrats, however, saw their support drop to 26.3% from nearly 35% in 2010, which according to Reuters was the worst result since World War II. The elections are considered by many to an indicator of voters' broader intentions ahead of next year's general elections. (Marketwatch)

EU: Greece president proposes technocrat govt
Greece's president Karolos Papoulias late Monday proposed a technocrat government for the country, according to reports. Elections just over a week ago left the country without a government, placing the aid arrangements it has made with international creditors in doubt and once again bringing into focus the possibility of a Greek exit from the currency bloc. Still, The Wall Street Journal reported that the proposal drew weak support from Greece's fragmented and squabbling political parties. Italy recently replaced its government with technocratic leadership -- made up of technical experts rather than politicians. The assumption is that experts - who are in power for a brief period - will be more successful in implementing the necessary reforms as they will not have to worry about their long-term political ambitions. (Marketwatch)

US: Spark in sales of cars and trucks drives US economy
Car sales that are running at the fastest pace in four years are poised to reverberate through the world‟s largest economy as a spillover into production, profits and jobs for Americans may be starting. Auto purchases have exceeded a 14m annual rate in each month this year, the strongest performance since early 2008, according to Ward‟s Automotive Group. Government data show motor-vehicle output contributed half of the first quarter‟s 2.2% economic growth. (Bloomberg)

Dow falls to lowest level since January amid Greece exit concern
US stocks declined, sending the Dow Jones Industrial Average to the lowest level since Jan, as Greece struggled to form a new government amid growing speculation the nation may leave the European currency. Financial and energy shares fell the most among 10 groups in the Standard & Poor‟s 500 Index. JPMorgan Chase & Co. and Bank of America Corp. sank at least 2.6% as European lenders slumped. The Dow fell 125.25 points, or 1%, to 12,695.35. (Bloomberg)

Possible Greece exit causes uncertainty in world markets
Stocks and commodities slumped across the globe on fears that Greece would exit the eurozone as investors sold down their shares ahead of a Europe Finance Ministers‟ meeting in Brussels yesterday. The ministers were plotting a solution for Athens, but there are strong indications that no conclusion would be reached. With the failure to form a united government in Greece following the inconclusive elections on 6 May, European central bankers are once again bringing up the sensitive topic of Greece exiting the euro. (StarBiz)