KEY DEVELOPMENTS – INTERNATIONAL
June 10 (Bloomberg) -- China’s consumer prices rose the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate cut in three years. Inflation slowed to 3 percent from a year earlier, the National Bureau of Statistics said, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent; lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, the Beijing-based bureau said in separate statements.
June 11 (Bloomberg) -- China’s exports rose in May at more than double the pace analysts estimated while industrial output and retail sales trailed forecasts, signaling that last week’s interest-rate cut was aimed at countering a domestic slowdown. Overseas shipments climbed 15.3 percent from a year earlier, the customs bureau said, exceeding all 29 estimates in a Bloomberg News survey. Industrial output gained by less than 10 percent for a second month and retail sales increased the least in almost six years excluding holiday-month distortions, statistics bureau reports showed June 9.
June 11 (Bloomberg) -- China’s new lending in May exceeded analysts’ estimates and money-supply growth accelerated, aiding Premier Wen Jiabao’s efforts to reverse a slowdown in the world’s second-biggest economy. Local-currency loans were 793.2 billion yuan ($125 billion), the People’s Bank of China said on its website. That compared with the 700 billion yuan median forecast in a Bloomberg News survey of 29 economists and 681.8 billion yuan in April. M2 money supply grew 13.2 percent last month from a year earlier, compared with an estimate of 12.9 percent.
June 12 (Bloomberg) -- The International Monetary Fund said Japan’s currency is overvalued and the central bank should consider further monetary stimulus, including longer-dated government bonds and private securities. “The exchange rate has appreciated over the past year partly because of safe-haven capital inflows, and our analysis suggests that the yen is moderately overvalued from a medium-term perspective,” the IMF said in a report on Japan’s economy release.
June 12 (Bloomberg) -- The International Monetary Fund said Japan’s currency is overvalued and the central bank should consider further monetary stimulus, including longer-dated government bonds and private securities. “The exchange rate has appreciated over the past year partly because of safe-haven capital inflows, and our analysis suggests that the yen is moderately overvalued from a medium-term perspective,” the IMF said in a report on Japan’s economy release.
June 11 (Bloomberg) -- U.K. indexes of business confidence and job prospects dropped in May, indicating the economy will weaken and employment may fall later this year, BDO LLP said. A gauge of company sentiment fell to 95.5 from 96.2 in April, the accountancy firm said in an e-mailed statement in London. An employment measure declined to 94.9 from 95.5. A reading below 95 indicates contraction.
June 11 (Bloomberg) -- French industrial production climbed in April as unseasonably cold weather boosted demand for electricity and gas. Output from factories, mines and power plants rose 1.5 percent from March, when it fell a revised 1.0 percent, national statistics office Insee said in an e-mailed statement. Economists forecast a drop of 0.1 percent, according to the median of 18 estimates in a Bloomberg News survey.
June 12 (Bloomberg) -- U.K. manufacturing fell more than economists forecast in April, pointing to continued weakness in the economy at the start of the second quarter. Factory output dropped 0.7 percent from March, led by pharmaceuticals, aircraft maintenance and food and drink production, the Office for National Statistics said. The median forecast of 30 economists in a Bloomberg News survey was for a decline of 0.1 percent. Overall industrial output was unchanged on the month, weaker than the 0.1 percent increase forecast by economists.
June 12 (Bloomberg) -- U.K. manufacturing fell more than economists forecast in April, pointing to continued weakness in the economy at the start of the second quarter. Factory output dropped 0.7 percent from March, led by pharmaceuticals, aircraft maintenance and food and drink production, the Office for National Statistics said. The median forecast of 30 economists in a Bloomberg News survey was for a decline of 0.1 percent. Overall industrial output was unchanged on the month, weaker than the 0.1 percent increase forecast by economists.
June 13 (Bloomberg) -- Euro-area industrial production declined for a second month in April, led by a drop in Germany, adding to signs of a deepening economic slump. Output in the 17-nation euro area slipped 0.8 percent from March, when it decreased a revised 0.1 percent, the European Union’s statistics office in Luxembourg said today. Economists had projected a drop of 1.2 percent, the median of 28 estimates in a Bloomberg News survey showed. From a year earlier, production fell 2.3 percent.
June 15 (Bloomberg) -- Bank of England Governor Mervyn King unveiled measures to fight an escalation of Europe’s debt crisis as global policy makers prepare for the impact of Greek elections in two days. Warning of a “black cloud” from the euro region, King said in a speech in London that the case for more stimulus in the U.K. "is growing." In addition to looser policy, he said the BOE will activate a sterling liquidity facility to aid banks, and plans to have a form of credit easing operating within weeks to boost lending in the economy.
June 13 (BNA - Daily Report for Executives/Bloomberg) -- U.S. import prices fell 1 percent in May, for their largest drop since June 2010, as fuel costs declined, the Labor Department reported June 12. Export prices also fell in May, by 0.4 percent, after rising by that same amount in April, the Bureau of Labor Statistics said.
June 13 (BNA - Daily Report for Executives/Bloomberg) -- U.S. import prices fell 1 percent in May, for their largest drop since June 2010, as fuel costs declined, the Labor Department reported June 12. Export prices also fell in May, by 0.4 percent, after rising by that same amount in April, the Bureau of Labor Statistics said.
June 13 (Bloomberg) -- Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed. Sales excluding car dealerships slumped by the most in two years.
June 14 (Bloomberg) -- More Americans than forecast applied for unemployment insurance payments last week, another sign the labor market is struggling to improve. Claims for jobless benefits unexpectedly climbed by 6,000 to 386,000 in the week ended June 9 from a revised 380,000 the prior week that was more than first estimated, Labor Department figures showed. Economists projected claims would fall to 375,000, according to the median estimate in a Bloomberg News survey.
KEY DEVELOPMENTS – Domestic
June 11 (Bloomberg) -- India may become the first BRIC nation to lose its investment-grade credit rating, Standard & Poor’s said, citing slowing growth and political roadblocks to economic policy making. “Setbacks or reversals in India’s path toward a more liberal economy could hurt its long-term growth prospects and, therefore, its credit quality,” Joydeep Mukherji, an analyst at Standard & Poor’s in New York, said in a statement.
June 12 (Bloomberg) -- Indian industrial production rose less than estimated in April, adding to the case for an interest-rate cut to bolster a weakening economy. Production at factories, utilities and mines increased 0.1 percent from a year earlier, after a revised 3.2 percent drop in March, the Central Statistical Office said in a statement in New Delhi. The median of 37 estimates in a Bloomberg News survey was for a 1.7 percent climb.
Indian inflation quickened more than estimated in May, an acceleration that may fail to prevent an interest-rate cut to prop up slowing growth. The benchmark wholesale-price index rose 7.55 percent last month from a year earlier, after climbing 7.23 percent in April, the Ministry of Commerce and Industry said in a statement in New Delhi. The median of 37 estimates in a Bloomberg News survey was for a 7.5 percent advance.
Source: L&T Mutal Fund
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Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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