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Chinese manufacturing remains soft in April

April 23rd, 2014

Today, a survey by HSBC and Markit Economics showed that the preliminary reading for China’s manufacturing purchasing managers’ index (PMI) improved slightly to 48.3 in April from 48 in March. However, the reading remained below the 50-mark for the fourth consecutive month, indicating further contraction. Additionally, the gauge of new orders and output prices improved in April, but remaining below 50. New export orders also slipped below the 50-mark.

Germany to record strong growth in Q1 2014

April 22nd, 2014

Today, the Finance ministry of Germany revealed that the country is likely to register strong growth in the first quarter. This was ascribed to the recent boost in industrial and construction activities, driven by a favourable winter weather and rising domestic demand. At the same time, the ministry cautioned that seasonally adjusted growth in the second quarter would decelerate. Meanwhile, GDP growth for the full year is expected at 1.8% and inflation reading is estimated to be 1.4% for 2014 and 1.9% for 2015.

China announces reduction in the reserve requirement for rural banks

April 17th, 2014

Today, China’s State Council announced its decision to cut the reserve requirement ratio (RRR) for qualified rural commercial banks and rural cooperative banks. However, the office did not provide further details.

Chinese economy grows 7.4% in the first quarter

April 16th, 2014

As per the National Bureau of Statistics, China’s GDP grew 7.4% y-o-y in Q1 2014 after rising 7.7% in the preceding quarter. The reading, outperformed expectations of a 7.3% increase. On a seasonally adjusted basis, GDP growth decelerated to 1.4% q-o-q in Q1 2014 from 1.8% in the previous quarter, missing the expectation of 1.5%.

UK retail sales drop in March

April 15th, 2014

Today, the British Retail Consortium reported a 1.7% y-o-y decline in UK retail sales for March (on like-for-like basis). This is the biggest decline since April 2013 and is ascribed to the late timing of Easter in 2014 and sharp 2.7% fall in food sales. In February, retail sales were down 1%.

The inescapable conclusion that an amber light is flashing over Wall Street

April 14th, 2014

In the same way that, over time, peasant farmers are tempted to cultivate their crops increasingly higher on the lava-enriched terraces on the side of volcanoes, it is important to keep an eye on the frequency of plumes out of the crater. Just as we are becoming used to the notion of economic recovery in the UK, it may seem counterintuitive to have to contemplate a sharp fall in equity markets. Unfortunately, however, the technical evidence for such a scenario is mounting. The implication is a breakdown in confidence, regardless of investors’ views of fundamental factors such as corporate earnings and global growth.

UK house prices increase in April

April 14th, 2014

Today, the property website Rightmove stated average asking prices in the UK advanced 2.6% m-o-m to a record level of £262,594 in April, after rising 1.6% in the previous month. This was led by a strong monthly gain of over 7% in some parts of London. In South West and South East regions, asking prices stood at £272,321 and £335,142, respectively. In London and East Anglia, prices were £572,348 and £236,659, respectively. Overall asking prices in the UK increased 7.3% y-o-y, registering its highest increase since October 2007, after gaining 6.8% in March.

Chinese consumer prices rise 2.4% y-o-y in March

April 11th, 2014

Today, data from the National Bureau of Statistics showed that consumer price inflation in China accelerated to 2.4% y-o-y in March from 2% in the previous month, matching market forecasts. Food prices surged 4.1%, while non-food prices rose 1.5%. Meanwhile, producer prices declined 2.3% in March, after falling 2% in February. On m-o-m basis, prices edged down 0.5% in March after rising 0.5% in February.

UK house price balance improves in March

April 10th, 2014

Today, the Royal Institution of Chartered Surveyors (RICS) stated that the UK house price balance rose to a seasonally adjusted 57% in March from an upwardly revised 47% in February, beating the forecast of 44%. Prices in London and South East UK showed the strongest gains for the month.

UK retailers slash prices in March

April 9th, 2014

The British Retail Consortium (BRC) said UK shop prices dropped 1.7% y-o-y in March, posting the biggest annual decline since the series commenced in December 2006. This marked the 11th consecutive monthly decline in prices. In February, prices lowered 1.4%. Non-food prices were down 3.2%, while growth in food prices eased to a record low of 0.8%. Prices of clothing and electrical goods plunged 12.8% and 4.4%, respectively, during the period.

Exports of UK service sector gain in Q1 2014

April 8th, 2014

A survey by the British Chambers of Commerce (BRC) showed further improvement in exports of the UK service sector. The balance of export sales and orders came in at +38% and +39%, respectively. In addition, the balance of domestic sales and orders stood at +38% and +42%, respectively.

Europe prepares for trading alternatives to Russia

April 7th, 2014

Yesterday, German Chancellor Angela Merkel exhibited support for a new trade deal with the US to counter the impact of economic sanctions imposed on Russia. Germany is Russia’s biggest trading partner in the European Union.

Mario Draghi assures continuing monetary support for inflation growth

April 4th, 2014

Yesterday, Mario Draghi resolved to take all necessary measures to rescue the Eurozone from a prolonged period of low inflation. He stated the central bank could adopt ‘additional non-conventional measures’ if the downside risks to the economy or deflationary risks were to persist. In addition, he again assured the benchmark interest rates were likely to be maintained at current low levels or would be reduced further for an extended period.

China unveils stimulus measures to boost economy

April 3rd, 2014

Late yesterday, China’s State Council, the government’s executive body, announced a mini-stimulus package to revive the struggling economy. The measures include additional spending to build new railways and tax breaks for small businesses. The executive body also said it would increase financing to construct low-cost housing in the country.

US auto sales surge in March

April 2nd, 2014

Autodata Corp, a research firm, revealed US vehicle sales increased 5.7% to an annualized rate of 16.4 million in March, ahead of the expected increase to 15.8 million vehicles. This was mainly ascribed to an improvement in weather conditions, which have overshadowed industry sales over the past few months.

Chinese manufacturing decelerates in March – HSBC

April 1st, 2014

The final reading of the HSBC purchasing managers index (PMI) was 48 in March, slightly lower than the flash reading of 48.1. The PMI reading for February was 48.5. On the contrary, the official manufacturing PMI for China edged up to 50.3 in March vis-à-vis 50.2 in February.

Rise in UK house prices in March

March 31st, 2014

As per data from Hometrack, a property research firm, the average asking price for a house in the UK advanced 0.6% m-o-m in March after rising 0.7% in February, registering the 14th consecutive month of increase. House prices in England and Wales grew 0.6%, while in London, prices were up 0.7%, the firm reported. On y-o-y basis, house price growth accelerated to 5.7% in March from 5.4% in February.

UK consumer confidence reaches record high in March

March 28th, 2014

Today, data from research firm GfK showed that the UK consumer sentiment index moved up to -5 in March from -7 in February, reaching the highest level since August 2007. The actual reading was better than the market forecast of -6.

Unemployment number in France worsens in February

March 27th, 2014

Yesterday, France’s labour ministry reported that the number of registered jobseekers in the country increased 0.9% to a record high of 3.3 million in February. Including part-time workers, the jobless number rose to around 4.9 million. On y-o-y basis, the figure was up 4.7% in February. Separately, the statistical office indicated that the ILO unemployment rate in metropolitan France and overseas departments inched down to 10.2% in Q4 2013 from 10.3% in the previous quarter, but maintained similar pace from Q4 2012.

UK house prices reached its highest since August 2008

March 26th, 2014

Yesterday, the Office for National Statistics (ONS) revealed the average asking price for a house in the UK grew 6.8% y-o-y to £254,000 in January, following a 5.5% increase in December. This upbeat performance was driven by strong rallies in London and the South East, growing at an annual rate of 13.2% and 7.1%, respectively.

Debate over Scotland’s independence still unresolved

March 25th, 2014

Yesterday, a monthly survey by the research group Taylor Nelson Sofres (TNS) revealed that the proportion of respondents who wished to remain in the UK was unchanged at 42%. The share of Scots favouring independence edged down one point to 28%. Around 30% of the surveyed people stated that they were undecided.

Slowdown in Chinese factory activity in March

March 24th, 2014

Yesterday, HSBC and Markit Economics revealed the flash manufacturing PMI for China dropped to an eight-month low of 48.1, on a seasonally adjusted basis, in March from 48.5 in February vis-à-vis the forecast of 48.7. The output index declined to an 18-month low of 47.3 in March from 48.8 in February. New orders, output/input prices and purchases volumes also fell further during the month.

Gauge of UK house prices reaches a record high in March

March 21st, 2014

Today, data from Knight Frank and Markit Economics revealed the seasonally adjusted gauge of house price sentiment jumped to a record high of 61.5 in March from 60.7 in February. Moreover, the measure of expectations of the house prices for the coming year stood at 74.3 in March, down from 74.9 in February.

Zahid Mahmood discusses global markets on CNBC Arabia’s “Bursat”, 12th March 2014

March 20th, 2014

Zahid Mahmood, Investment Adviser at Beaufort Securities, discusses global markets on CNBC Arabia’s “Bursat” – 12/03/2014

The Budget changes for pensions and ISAs – 20/03/14

March 20th, 2014

At a stroke, the latest Budget has ushered in an era of dramatically new flexibility for savers and investors. Subject to how these will be specifically implemented in the months ahead, some broad inferences can be drawn…

Chancellor Osborne upgrades UK growth predictions

March 20th, 2014

Yesterday, in the annual budget speech, Chancellor George Osborne raised the UK growth projection to 2.7% for the current year, up from the earlier estimated 2.4%. The growth estimate for 2015 was increased to 2.3% from 2.2%, whereas those for 2016 and 2017 were unchanged at 2.6%. In addition, the Chancellor announced several supportive measures for savers and pensioners in his statement.

Japan extends streak of trade deficits

March 19th, 2014

As per data released by the Ministry of Finance, Japan recorded a trade deficit of ¥800bn (US$7.9bn) in February, the 20th straight deficit, vis-a-vis ¥2.79trn in January. Though the reading was much below the record trade deficit in the previous month, it could not meet the market expectations of ¥600bn. This was ascribed to slower exports and increased imports.

China records lower home price growth in February

March 18th, 2014

Data from the National Bureau of Statistics (NBS) revealed that the average new home prices advanced in 57 of the 70 major Chinese cities in February, down from 62 cities in January. On monthly basis, prices in Beijing and Shanghai were up 0.2% and 0.4%, respectively, in February. Compared to last year, prices rose in 69 of the 70 cities.

Manufacturers optimistic for 2014, says EEF

March 17th, 2014

UK manufacturers are enjoying a strong start to the year and are confident about the outlook, according to their industry body, the EEF. Its survey of 322 companies, conducted during January and February, showed stronger output and orders than in the final quarter of last year. Measures of recruitment and investment intentions were at the highest level recorded by the survey. Export orders were up strongly from the previous quarter. EEF chief economist Lee Hopley said: “This is the most positive set of indicators we have seen for some time, demonstrating that we’ve not just turned the corner, we’re actively heading down the right road.” Ms Hopley added: “Manufacturers are clearly feeling more confident as their order books fill up and exports are strong. “It is now vital that government does all that it can to underpin support for companies, giving manufacturers the confidence to fulfil their investment and recruitment plans.”

Japan’s industrial output growth revised downwards

March 14th, 2014

The Ministry of Economy, Trade and Industry today reported that Japan’s industrial production grew a seasonally adjusted 3.8% m-o-m in January, coming in below the government’s previous forecast of 4%. On y-o-y basis, the output grew 3.8% on a non-adjusted basis in January, lower than the flash estimate of 4%.