New Zealand: NZ home-building approvals rebound as quake-hit areas surge
New Zealand home-building approvals rebounded in June after two months of decline, as consents in earthquake-hit Canterbury region more than doubled from a year earlier. Approvals last month increased by 5.7% from May to 1,341. The median estimate in a Bloomberg News survey of six economists was for a 7.3 % rise. Excluding apartments, approvals gained by 2.1 %. This adds to signs of a domestic recovery after New Zealand’s deadliest quake in eight decades hit Christchurch on Feb 2011. Central bank Governor Alan Bollard last week noted the housing recovery while keeping the official cash rate at a 2.5% record low. (Bloomberg)
EU: Heading for monthly loss before jobs, manufacturing data
The EUR is set for a monthly loss against the USD on signs that the sovereign-debt crisis is hampering growth in the region’s economy. The 17-nation currency held losses against the yen yesterday before reports this week forecast showed that manufacturing shrank but the euro areas’ jobless rate rose to a record high – 11.2% June and the highest on record according to a median survey of economists. The final reading on a gauge of euro-region manufacturing probably held at 44.1 in July, the lowest since June 2009, economists in a separate Bloomberg poll estimated. The European Central Bank meets on 2 Aug. (Bloomberg)
China: Increases railway spending plan for second time in month
China announced a jump in planned railway spending as the State Council called for private investment in utilities and healthcare. The Ministry of Railways, the nation’s largest corporate debt issuer, plans to spend CNY470bn (USD74bn) on railroads and bridges this year. This is the second increase in July, making a 14% climb in combined gain from the previous figure. The new target exceeds last year’s CNY461bn in spending, and follows Premier Wen Jiabao’s comments that promoting investment growth is the key now to stabilizing an expansion that decelerated to 7.6% last quarter, a three-year low. (Bloomberg)
UK: Mortgage approvals decline to lowest level in 18 months
UK mortgage approvals fell more than economists’ forecast in June to an 18-month low as concerns about the euro area mounted and Britain’s recession deepened. Lenders granted 44,192 loans to buy homes, compared with a revised 50,544 the previous month, the Bank of England said today. Economists predicted approvals would drop to 48,000. Recent housing-market data suggested weakening demand is hurting prices. The economy shrank 0.7% in the second quarter, and the Bank of England and the Treasury have introduced a program to lower borrowing costs and boost lending. (Bloomberg)
US: Fed may cut banks’ interest on reserves after ECB
Federal Reserve Chairman Ben Bernanke may take another look at cutting the interest rate to lower short-term borrowing costs and spur slowing US expansion. Bernanke testified to Congress on 17 July that reducing the rate from its current 0.25% is a step to take to reduce unemployment, stuck above 8% for over three years. Policymakers meeting this week are looking for new monetary tools after the Fed lowered its benchmark interest rate to near zero in December 2008 and purchased USD2.3trn of securities to spur the economy. A 27 July government report showed economic growth slowed to a 1.5% annual rate in the second quarter as consumers curbed spending. (Bloomberg)
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