Wednesday, 3 July 2013

CIMB Global Economic News - 03 July 2013

US factory orders rose 2.1% in May (+1.3% in Apr), reflecting broad-based gains that signal manufacturing is stabilizing. The median forecast of 61 economists in a Bloomberg survey called for a 2% increase. Factory orders excluding the volatile transportation component climbed 0.6% after a 0.2% increase in Apr. (Bloomberg) 

US Federal Reserve will continue to provide stimulus to the economy "for quite some time," even as there are grounds for hope of a self-sustaining recovery, said Federal Reserve Governor Jerome Powell Jerome Powell on Tuesday. US growth has remained in 2% range since 2009, which is still at risks to negative shocks. Powell said that the private sector is showing signs of improvement. (WSJ) 

Federal Reserve Bank of New York President William C. Dudley said economic growth will probably quicken in 2014, possibly warranting a reduction in the central bank’s bond purchase program. “A strong case can be made that the pace of growth will pick up notably in 2014,” Dudley, who serves as vice chairman of the Federal Open Market Committee (FOMC) and has never dissented from a monetary policy decision, said. (Bloomberg) 

Euro-area producer prices unexpectedly decreased for a second month by 0.1% yoy in May (-0.2% in Apr). Economists had projected that prices would remain stable. Energy prices fell 1.8% in May, a third straight decline, and intermediate goods dropped 0.5%. Prices of capital and durable consumer goods rose 0.6% and 0.7%, respectively, the same pace as in Apr. (Bloomberg) 

Bank of Japan (BOJ) will consider revising up its assessment of the economy at its rate review next week, reflecting the upbeat survey results that included plans for a healthy increase in corporate capital expenditure, sources familiar with the BOJ's thinking said. Last month, the central bank said the economy was "picking up". (Reuters) 

The Reserve Bank of Australia (RBA) left its key interest rate at a record low at 2.75% yesterday as predicted by 25 of 28 economists surveyed by Bloomberg News. The RBA said in a statement that the Aussie “remains at a high level” and may “depreciate further over time, which would help to foster a rebalancing of growth,” Governor Glenn Stevens said. (Bloomberg) 

South Korea's foreign reserves stood at US$326.4bn at end-June (US$328.1bn at end-May). Some US$1.02bn foreign-exchange stabilization bonds matured in Jun, and weaker euro and A$ made assets denominated in those currencies less valuable when converted to the US$. (Bloomberg). 

Home prices in China's 288 major cities rose 0.4% in Jun from May, down slightly from May's monthly increase of 0.9%, a poll by a real estate services company E-House China showed. It was the second consecutive month of slowing property inflation. On a yoy basis, house prices jumped 10.5% in Jun (+9.7% in May). (Starbiz)

The World Bank cut its forecast for Indonesia’s economic growth this year to 5.9% from an earlier forecast of 6.2% as it anticipates cooling domestic demand and commodity exports, according to a quarterly report released in Jakarta yesterday. It also lifted its annual inflation forecast to 7.2%, after the government raised fuel prices last month. “Indonesia’s policy settings likely need to adjust to somewhat less buoyant economic conditions,” the World Bank said. (Bloomberg) 

Bank Indonesia will strengthen policy mix at next monthly board of governors meeting as preemptive measure against accelerating inflation following increase in fuel prices, Governor Agus Martowardojo said. Statement doesn’t provide details of planned policies. (Bloomberg) 

Thailand's guaranteed rice purchase price of THB15,000 per ton will be in place until 15 Sep, government spokesman Teerat Ratanasevi said. Commerce Minister Niwattumrong Boonsongpaisan will consider an extension of the support price for the next harvest by taking into account its impact on the market, government fiscal discipline and farmer incomes, Teerat added. (Bloomberg) 

The Philippine central bank see no need to adopt new rules on real estate lending in spite of strong demand as the risk of asset bubbles forming is low, but it will continue to monitor banks' exposure to the sector, Governor Amando Tetango said. A sell-off in financial markets triggered by concerns that the US Federal Reserve's bond buying policy would end sooner than expected has reduced the risk of asset price bubbles forming the property market, he said. (Financial Daily) 

Sri Lanka's credit rating outlook was revised to stable from positive by Moody's Investors Service, which cited lower currency reserves and slower progress in paring the budget deficit. The foreign-currency rating was affirmed at B1, four steps below investment grade and on par with such nations as Jordan and Kenya, it said. (Starbiz) 

Vietnam's Manufacturing Purchasing Managers’ Index (PMI) lost 2.4 pts to 46.4 in Jun (48.8 in May), signaling further deterioration in the local manufacturing sector. The PMI has remained below the neutral 50.0 level, a signal of contraction, for two successive months. (Bloomberg)

Source: CIMB Daybreak - 03 July 2013

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