Archive forMay, 2014

UK consumer confidence registers nine-year high in May

Survey results from GfK revealed the gauge of consumer confidence in the UK jumped to zero in May, the highest since April 2005, from -3 in April. The reading outperformed the market forecast of -2.0.

Japan’s retail sales plunge 13.7% in April

Today, data from the Ministry of Economy, Trade and Industry showed that Japan’s retail sales fell by a seasonally adjusted 13.7% m-o-m to ¥11.01trln in April, exceeding the forecast of 11.7% drop, following a revised 6.4% increase in the previous month. On y-o-y basis, retail sales declined 4.4% in April after a strong 11% gain in March.

EU relaxes sanctions on Russia

European Union (EU) leaders have withdrawn some earlier sanctions imposed on Russia, after the President Vladimir Putin accepted the election results in Ukraine. Russian leaders have declared their intention to cooperate with Ukraine’s newly elected President Petro Poroshenko; as a major step in this direction, some Russian troops have been pulled out from the Ukrainian border.

Germany’s consumer confidence remains steady in June

The gauge of consumer confidence in Germany stood at 8.5 for June, unchanged from May and the highest since January 2007, market research agency GfK announced yesterday. The reading was in line with market forecasts and indicates upbeat spending sentiment among German consumers.

Credit ratings of Spain and Greece upgraded

The sovereign debt ratings of Spain and Greece were upgraded yesterday. Fitch raised Greece’s long-term debt rating to B from B-, now five levels beneath the investment grade category, driven by a better economic and fiscal outlook for the country. Meanwhile, S&P upgraded Spain’s credit rating to BBB from BBB- and assigned a stable outlook to the rating.

China’s manufacturing PMI climbs to 49.7 in May

Today, the flash estimate from HSBC and Markit Economics showed that China’s manufacturing purchasing managers’ index improved to 49.7 in May from 48.1 in April. The actual reading was better than the market forecast of 48.3. However, the gauge remains in the contraction zone (below 50).

Bank of Japan maintains pace of monetary stimulus

At the end of its two-day policy meeting today, the Bank of Japan decided to keep the annual rate of bond purchases unchanged at ¥60-70trln, with the economy exhibiting moderate recovery. The central bank also observed recovering business investment following the sales tax hike in April 2014. Separately, the Ministry of Finance announced that the country’s trade deficit narrowed to ¥808.8bn in April from ¥1,446bn in March. On y-o-y basis, exports rose 5.1% in April compared with the expectation of 4.8%. Imports were up 3.4%, beating the forecast of 0.8%.

German economic growth to decelerate in this quarter

In its monthly report, Germany’s central bank Bundesbank announced the country’s GDP growth is expected to decelerate in Q2 2014, after a robust rise in the preceding quarter led by favourable weather. Growth in the domestic sector would be overshadowed by the ongoing volatility in emerging markets and geopolitical concerns in eastern Europe.

UK house prices rise on higher deman

Today, Rightmove stated the average asking price for a house in the UK advanced 3.6% m-o-m to £272,003 in May, after rising 2.6% in April. On y-o-y basis, house prices were up 8.9% in May, recording the highest growth since October 2007, following a 7.3% gain in the preceding month.

Chinese banks report record growth in bad loans since 2005

As per data released by the China Banking Regulatory Commission, Chinese banks registered the biggest quarterly rise in bad loans since 2005. This is primarily ascribed to the slowing economic growth in the country. As per the agency, in the three months ended March 2014, the banks’ bad loans increased by ¥54bn to ¥646.1bn, reaching the highest level since September 2008 and marking the 10th consecutive quarterly rise. During Q1 2014, bad loans constituted 1.04% of the total lending vis-à-vis 1% in the preceding quarter.

Japan’s economic growth accelerates in Q1 2014

According to the preliminary data released today by the Cabinet Office, Japan’s gross domestic product (GDP) grew 5.9% y-o-y in Q1 2014, its fastest pace since 2011, after rising a revised 0.3% in the previous quarter. The reading exceeded economists’ forecast of a 4.2% gain. GDP advanced 1.5% q-o-q after increasing 0.1% in Q4 2013, ahead of the expected growth of 1.0%.

IMF chief warns of low inflation in Eurozone

Managing Director of the International Monetary Fund (IMF), Christine Lagarde, reiterated her view that current inflation rates in the Eurozone and other major economies are very low. She opined that reduction in monetary stimulus by the US Fed could have material negative consequences on emerging economies. These factors could hamper global growth prospects. The inflation rate in the region is still hovering around 0.7%, much below the ECB’s target of ‘just under 2%’.

US posts budget surplus of US$106.9bn in April

The US Treasury Department said the country registered a budget surplus of US$106.9bn in April, below the economists’ forecast of US$114bn and the previous year’s comparative figure of US$112.9bn. For the fiscal year starting 1st October, budget deficit was recorded at US$306bn, down 37% y-o-y.

Beaufort broker, Basil Petrides discusses AstaZeneca’s proposed takeover by Pfizer on the BBC World News “World Business Report”, 12th May 2014

Beaufort broker, Basil Petrides discusses AstaZeneca’s proposed takeover by Pfizer on the BBC World News “World Business Report” – 12/05/2014

Eastern Ukraine votes for self-rule in referendum

In the referendum that took place on Sunday in eastern Ukrainian cities, including Donetsk, Slovyansk and Luhansk, voters are claimed to have supported pro-Russian Ukrainians’ move for ‘self-rule’. However, there seems to be widespread ambiguity among voters with regard to the implication and meaning of this term. Nevertheless, this step is likely to aggravate tensions between Russia and western nations including the US.

Mario Draghi indicates further stimulus action in June

Yesterday, the ECB’s Chief Mario Draghi stated the central bank could undertake further monetary easing in early June after evaluating the inflation data releasing during the month.

UK house price balance declines in April

The Royal Institution of Chartered Surveyors (RICS) revealed the UK house price balance moderated to a seasonally adjusted 54% in April from 57% in March. The reading was below the market estimate of 56%. House prices in East Anglia and the South East recorded robust gains, the agency stated.

UK shop prices decline for the 12th straight month

The British Retail Consortium (BRC) revealed overall shop prices in the UK dropped 0.5% m-o-m in April. On y-o-y basis, prices were down 1.4% vis-à-vis 1.7% in March, marking the 12th consecutive month of decline. Food price inflation decelerated to 0.7% in April from 0.8% in March, whereas non-food prices reported 2.7% deflation as against 3.2% in the previous month.

US service sector activity reaches eight-month high

The Institute for Supply Management (ISM) reported that the US service sector activity grew at the faster pace since August 2013. The gauge of non-manufacturing activity advanced to 55.2 in April from 53.1 in March, exceeding the market forecast of 54.2. This was largely driven by a sharp increase in the business activity index to 60.9 from 53.4. The index of new orders and inventory also recorded gains, coming in at 58.2 and 55.5, respectively. However, the employment index declined to 51.3 in April from 53.6 in the preceding month.

Britain’s housing market boom may crash

Sir Jon Cunliffe, Deputy Governor of the Bank of England (BoE), supported the outgoing BoE Chief Economist Spencer Dale on the pace of the upswing in the housing market. Data released by the Nationwide Building Society on Thursday suggested UK house prices reached double-digit growth of 10.9% y-o-y in April, for the first time in four years.

China’s manufacturing increases marginally in April

China’s official purchasing manufacturing index (PMI) came in at 50.4 in April, slightly better than March’s reading of 50.3, as per the data released by the National Bureau of Statistics this morning. The new orders sub-index in the PMI rose to 51.2 in April from 50.6 in March, while the sub-index for export orders fell to 49.1 from 50.1 over the same period.