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Archive for the breakfast-today Category

Growth in China’s factory activity slows in August

Thursday, August 21st, 2014

The preliminary reading of China’s manufacturing purchasing managers’ index (PMI), released by HSBC, showed the sector continued to expand in August, albeit at a slower pace. The PMI fell to a three-month low of 50.3 in August from 51.7 in July. The reading was below the market forecast of 51.5.

Argentina to service its bondholders through bond swap

Wednesday, August 20th, 2014

Yesterday, Argentina’s President Cristina Fernandez announced that the government would offer a voluntary debt swap on its defaulted debt. The new bonds issued under the deal would be covered under the national law. The government is yet to secure congress approval for this arrangement. If the proposal goes through, Argentina would be able to service its debt within the country and the bondholders would have a choice of getting their debt governed under the US or Argentina law.

US homebuilder confidence at seven-month high

Tuesday, August 19th, 2014

The US housing market index rose to 55.0 in August, its highest level since January, from 53.0 in July, as stated by the National Association of Home Builders (NAHB). This is primarily ascribed to increased employment and low mortgage rates, coupled with affordable home prices. The gauge of current sales conditions and expectations for future sales rose by two points each to 58.0 and 65.0, respectively. The index measuring prospective buyer traffic improved by three points to 42.0.

UK house prices decline in August

Monday, August 18th, 2014

Today, Rightmove reported the average asking price for a house in the UK lowered 2.9% m-o-m to £262,401 in August, marking the biggest decline for that month. House prices fell 0.8% m-o-m in July. On y-o-y basis, prices were up 5.3%, after rising 6.5% in the previous month.

UK rents rise again

Friday, August 15th, 2014

After more than a years break rental bills are once again rising more than inflation. According to LSL Property Services as the market picked up during the 12 months to July, the average monthly rent across England and Wales has increased by 2%. The pace thus became higher than the 1.9% rate of inflation. Coinciding with the release of these reports, The Resolution Foundation released a study stating that almost 1.6 million UK households were seeing more than half their disposable income taken up with rent or mortgage costs.

RICS: UK house prices balance eases in July

Thursday, August 14th, 2014

In the UK, the monthly house price balance eased to 49 in July, from a downwardly revised 52 in June, as reported by the Royal Institution of Chartered Surveyors (RICS). The reading was below the market expectation of 51. The moderation in house prices was primarily due to the strict mortgage lending norms.

US budget deficit shrinks in July

Wednesday, August 13th, 2014

Budget deficit in the US contracted 3% y-o-y to US$95.0bn at the end of July, better than the market forecast of US$96.0bn deficit. From October to July, budget deficit fell 24% y-o-y to US$460.5bn. For the 10-month period ended July, Federal receipts rose 8% to US$2.47trln, whereas spending inched up 1% to $2.93trln.

UK retail sales decline in July

Tuesday, August 12th, 2014

Data from the British Retail Consortium revealed that like-for-like (LFL) sales in the UK edged down 0.3% y-o-y in July after dropping 0.8% in June. However, total sales increased 1.3% in July from 0.6% in June. For the three months ended July, food sales fell 3.5% q-o-q, whereas non-food sales advanced 2.4%. Growth in the non-food category was led by furniture sales, which recorded its fastest rate of increase since January 2014 (excluding the impact of Easter holidays).

Chinese consumer prices inch up in July

Monday, August 11th, 2014

In China, the National Bureau of Statistics revealed that consumer prices edged up 0.1% m-o-m in July, after slipping 0.1% m-o-m in the preceding month. On y-o-y basis, prices rose 2.3% in July, in line with June as well as the market expectation. The reading is below the annual target of 3.5%, indicating room for further monetary easing.

US consumer credit growth decelerates in June

Friday, August 8th, 2014

Consumer credit in the US rose US$17.3bn to US$3.17trln in June (below estimates of a US$18.5 increase) following a US$19.6bn gain in May, as reported by the Federal Reserve. Growth in auto and home loans, reflecting improving employment, led to an increase in consumer borrowing.

UK economic growth decelerated in July: NIESR

Thursday, August 7th, 2014

The National Institute of Economic and Social Research (NIESR) reported that the UK economy’s growth slowed to 0.6% q-o-q in the three months to July from 0.8% in the three months ended June. The annual growth forecast for 2014 was upwardly revised to 3%, while that for 2015 was pegged at 2.3%.

UK shop prices dip in July

Wednesday, August 6th, 2014

The British Retail Consortium (BRC) revealed that shop prices in the UK dropped 1.9% y-o-y in July (recording the steepest decline since the survey began in December 2006) after falling 1.8% in June. Food price inflation eased to a record low of 0.3% in July from 0.6% in the previous month, while non-food deflation improved to 3.3% from 3.4%.

China’s service sector growth decelerates in July

Tuesday, August 5th, 2014

Today, a survey by Markit Economics indicated that the services purchasing managers’ index (PMI) for China slid to 50.0 in July from June’s 15-month high of 53.1. The reading, which was the lowest in almost nine years, indicated a sharp decline in growth of the country’s service sector and raised concerns about its overall economic recovery. Service sector accounts for around 45% of the country’s gross domestic product (GDP).

Portugal central bank to bail out BES

Monday, August 4th, 2014

Portugal’s central bank decided to rescue Banco Espirito Santo (BES), the country’s largest listed bank. As per the plan, BES would be split into two parts: Novo Banco, a ‘good bank’ hosting healthy assets, and a ‘bad bank’ housing all exposure to the Espirito Santo group. Novo Banco would be recapitalised for up to €4.9bn. The interests of depositors of the original bank and senior bondholders would be protected. Losses of the bad bank would be borne by BES’s junior bondholders and shareholders.

China’s factory activity picks up in July

Friday, August 1st, 2014

Data from HSBC and Markit Economics indicated the final Chinese manufacturing PMI came in at 51.7 in July, up from 50.7 in June, signalling rapid expansion. The reading, however, was below the flash estimate and economists’ forecast of 52.0. Meanwhile, the official Chinese manufacturing PMI recorded a 27-month high of 51.7 from 51.0 in the preceding month, better than the expectation of 51.4.

UK consumer confidence falls in July

Thursday, July 31st, 2014

Today, a survey conducted by research firm GfK NOP, on behalf of the European Commission, revealed the gauge of consumer confidence in the UK slid to -2.0 in July from a 10-year high of 1.0 in June, marking the first decline in six months. The reading missed the economist forecast of an improvement to 2.0. All five components of the index declined in July.

IMF cautious about global growth prospects

Wednesday, July 30th, 2014

The International Monetary Fund (IMF) stated that the global growth in the coming five years is expected to reduce 2% due to slow progress in the emerging markets and higher interest rates across geographies. Furthermore, the ongoing conflict between Russia and Ukraine is likely to further impact markets.

US pending home sales drop in June

Tuesday, July 29th, 2014

The index of pending home sales in the US fell 1.1% m-o-m to 102.7 points in June, after climbing 6% m-o-m in May, in contrast with the market expectation of a 0.5% increase, the National Association of Realtors reported. This decline is ascribed to inadequate credit facility and slow wage growth.

UK house buying sentiment falls sharply

Monday, July 28th, 2014

Today, a survey by Halifax showed people in the UK have become more cautious about purchasing a house. In Q2 2014, the balance of people considering it a good time to buy a home slipped by 29 percentage points to 5%, the sharpest drop since the survey began in April 2011. The balance of people considering it a good time to sell rose by one point to 25%. For 2015, 57% people consider it is a good time to sell, while 32% believe it would be unfavourable.

Growth in UK home prices slows in July

Friday, July 25th, 2014

Growth in UK house prices eased to 0.1% m-o-m in July from 0.3% in June, the lowest in the last one year, revealed by the results of a survey by Hometrack. Anticipated rise in interest rates and stricter mortgage rules are likely to extend the trend.

IMF lowers US economic growth estimate for 2014

Thursday, July 24th, 2014

The International Monetary Fund (IMF), on Wednesday, cut the US 2014 growth forecast to 1.7% from 2% earlier. The 2.9% contraction in Q1 2014 is likely to be offset by acceleration in growth to 3–3.5% in the second half of 2014.

Hungary’s central bank cuts key interest rate

Wednesday, July 23rd, 2014

The National Bank of Hungary lowered its policy rate to 2.1% from 2.3%, the 24th consecutive rate cut since August 2012. Governor Gyorgy Matolcsy said the central bank plans to hold the benchmark rate at 2.1% until the end of 2015, unless the 3% inflation target is jeopardised.

Japan government lowers economic growth forecast

Tuesday, July 22nd, 2014

For the fiscal year ending March 2015, the Japanese government has slashed its gross domestic product (GDP) growth forecast to 1.2% from its prior estimate of 1.4%. The downward movement was majorly due to slack in exports and sluggish domestic demand after hike in sales tax. However, growth is expected to improve to 1.4% in the coming year.

Asking price for UK houses drops in July: Rightmove

Monday, July 21st, 2014

In the UK, asking prices for homes fell 0.8% m-o-m in July, following a 0.1% increase in June, property tracking website Rightmove revealed. Stringent mortgage lending norms and an anticipated increase in interest rates appeared to be the main reasons for the downward price movement; however, it could pace up by year end, Rightmove stated. Price growth slowed to 6.5% y-o-y in July from 7.7% in June.

UK house price sentiment improves in July, albeit at a slow rate

Friday, July 18th, 2014

As per data released by Knight Frank and Markit, the gauge of house price sentiment in the UK inched down to 62.4 in July from 62.5 in June. Sub-indices for all regions remained above 50, exhibiting price gains during the month. Meanwhile, the index measuring expectations of future prices improved to 71.7 in July from 71.6 in June.

US economy improving across nation: Beige Book

Thursday, July 17th, 2014

The Federal Reserve’s Beige Book revealed the US economy improved at a modest to moderate pace in June, with all 12 Fed districts reporting growth, led by increased manufacturing activity and continuing demand for labour.

China’s GDP grows 7.5% in Q2 2014

Wednesday, July 16th, 2014

The National Bureau of Statistics reported that China’s gross domestic product (GDP) jumped 7.5% y-o-y in Q2 2014 after advancing 7.4% in the previous quarter, boosted by credit-easing and conservative spending. Economists had expected 7.4% growth for the quarter.

UK like-for-like sales fall in June

Tuesday, July 15th, 2014

Like-for-like retail sales in the UK slid 0.8% y-o-y in June, after rising 0.5% in May, with buyers benefiting from competitive pricing, the British Retail Consortium reported today. Meanwhile, the overall retail spending advanced 0.6% y-o-y.

S&P affirms Germany’s sovereign credit rating

Monday, July 14th, 2014

Standard & Poor (S&P) maintained Germany’s sovereign rating at ‘AAA’, with a stable outlook, citing the strength and high level of diversification in the economy. Meanwhile, the agency kept Ukraine’s long-term foreign currency rating unchanged at ‘CCC’, but raised the outlook to stable from negative.

US wholesale inventories up 0.5% in May

Friday, July 11th, 2014

Yesterday, data from the Commerce Department revealed that wholesale inventories in the US grew 0.5% m-o-m in May after a revised increase of 1% in April. Markets had expected inventories to rise 0.6% during the month. Durable goods inventories advanced 1%, while non-durable goods inventories lowered 0.3%. Furthermore, the department reported that wholesale sales increased 0.7% in May after climbing 1.3% in the preceding month.