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Australian Home Sales Rebound In February: HIA
Australia's new home sales increased in February, recovering from the previous month's decline, data released by Housing Industry Association (HIA) showed Friday.
The volume of new home sales increased a seasonally adjusted 3 percent on a monthly basis in February, recovering from January's decline.
Detached house sales rose 2.2 percent during the month. The number of new detached house sales increased12.8 percent month-on-month in Western Australia, 5.3 percent in New South Wales, 3.5 percent in Queensland, and 0.3 percent in South Australia. At the same time, sales of multi-units climbed 10.5 percent in February.
"In a contemporary economic environment where interest rate settings are too high, finance conditions persistently tight, consumer and business confidence too low, and plans to tighten fiscal policy inappropriate, it is hard to envisage a sustained recovery in new home sales in coming months,"HIA chief economist Harley Dale said.
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Moody's Lifts S. Korea's Rating Outlook
Moody's Investors Service on Monday lifted the outlook on the Republic of Korea's rating, citing strong fiscal fundamentals and resilience in external financing position.
The outlook on 'A1' government bond rating was revised to 'positive' from 'stable'. The agency said reduction in the banking sector's level of external vulnerability and the outlook for relatively strong trend GDP growth over the medium term also underpinned the upgrade.
Nonetheless, rising household debt is a concern. If unchecked, this trend could impair bank asset quality and introduce a drag on private consumption expenditure as an important source of GDP growth, the agency assessed.
Moody's last rating action on the Government of Korea was on April 14, 2010, when its government bond ratings were raised to 'A1' from 'A2'.
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Full Text of Rba Statement After Leaving Rates unchanged at 4.25 Pct
Full Text of RBA Statement after leaving rates unchanged at 4.25 pct
Recent information is consistent with the expectation that the world economy will grow at a below-trend pace this year, but does not suggest that a deep downturn is occurring. Several countries in Europe will record very weak outcomes, but the US economy is continuing a moderate expansion. Growth in China has moderated, as was intended, and is likely to remain at a more measured and sustainable pace in the future. Conditions around other parts of Asia softened in 2011, partly due to natural disasters, but are not showing signs of further deterioration. Some moderation in inflation has allowed policymakers in the region to ease monetary policies somewhat. Commodity prices declined for a few months last year and are noticeably off their peaks, but have been relatively stable for a while now, at quite high levels. Australia's terms of trade have peaked, though they remain high.
Financial market sentiment has generally continued to improve in recent weeks and capital markets are supplying funding to corporations and well-rated banks.
At the margin, wholesale funding costs are tending to decline, though they remain higher, relative to benchmark rates, than in mid 2011. But the task of putting European banks and sovereigns onto a sound footing for the longer term remains large and Europe will remain a potential source of adverse shocks for In underlying terms, inflation was around 2½ per cent in 2011. CPI inflation was higher than that but will fall over the next quarter or two. It is currently expected that inflation will be in the 2-3 per cent range over the coming one to two years. This forecast abstracts from the effects of the carbon price and also embodies an assumption that productivity growth in the economy increases somewhat as a result of the structural change now occurring. At its next meeting, the Board will have the opportunity to reassess the outlook for inflation, taking into account not only data on demand and output but also forthcoming information on prices.
The Board eased monetary policy late in 2011. Since then, its judgement has been that, with growth expected to be close to trend, inflation close to target and lending rates close to average, the setting of monetary policy was appropriate.
*The Board's view was also that, were demand conditions to weaken materially, the inflation outlook would provide scope for easier monetary policy. At today's meeting, the Board judged the pace of output growth to be somewhat lower than earlier estimated, but also thought it prudent to see forthcoming key data on prices to reassess its outlook for inflation, before considering a further step to ease monetary policy.
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Dollar Extends Rally Against Most Majors
The U.S. dollar has been extending its New York session's rally against most major currencies in early Asian trading on Wednesday as the minutes of the Federal Reserve's latest monetary policy meeting indicated that the members were less willing to initiate another round of quantitative easing amid signs of improvement of the U.S. economy.
The latest FOMC meeting minutes said only "a couple of members" indicated that additional stimulus could become necessary, compared to the minutes of the January meeting, which said "a few members" believed that conditions could warrant additional securities purchases.
Disappointing trade data from Australia released in the session also prompted traders to bet on safe haven dollar.
Australia's trade deficit fell to A$480 million from A$971 million in January, data from the Australian Bureau of Statistics showed. Economists had expected the balance to be in a surplus of A$1.1 billion.
Exports fell 2 percent month-on-month in February. Imports were 4 percent lower than a month earlier.
The dollar rose to near a 2-week high of 1.3185 against the euro and a 6-day high of 1.5875 against the pound, compared to yesterday's close of 1.3231 and 1.5914, respectively. The next upside target level for the dollar is seen at 1.315 against the euro and 1.585 against the pound.
The dollar that closed yesterday's New York session at 0.9103 against the Swiss franc climbed to a 9-day high of 0.9136. On the upside, 0.920 is seen as the next target level for the dollar.
Against the Canadian dollar, the US dollar strengthened to a 2-day high of 0.9932. If the greenback gains further, it will reach parity with the loonie. At yesterday's close, the greenback-loonie pair was quoted at 0.9911.
The U.S. dollar advanced to a fresh 2- 1/2 -month high of 1.0265 against the Australian dollar and the next upside target level for the greenback is seen at 1.020. The pair ended yesterday's trading at 1.0332.
The U.S. dollar edged up to a 6-day high of 0.8157 against the New Zealand dollar, compared to 0.8191 hit late New York Tuesday. On the upside, 0.814 is seen as the next target level for the U.S. currency.
But the dollar pulled back slightly from its late New York session high of 83.0 against the yen. At present, the dollar-yen pair is worth 82.67, compared to yesterday's closing value of 82.87.
The final services PMI report for March from major European economies, Eurozone retail sales and German factory orders - both for February are expected in the European session.
At 7:45 am ET, the European Central Bank is due to announce its interest rate decision. The central bank is widely expected to keep rates on hold at 1 percent.
The U.S. ADP National employment report and the ISM non-manufacturing index - both for March are scheduled for release in the New York morning session.
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European Economics Preview: BoE Rate Decision In Focus
The interest rate decision from the Bank of England is the major event that is set to dominate the scene on Thursday.
The Federal Statistical Office is slated to issue Swiss consumer price data at 3.15 am ET. Economists expect consumer prices to fall 1.1 percent year-on-year in March, after easing 0.9 percent in February.
At 3.30 am ET, Dutch inflation data for March is due. EU harmonized inflation remained unchanged at 2.9 percent in February.
At 4.30 am ET, the Office for National Statistics is set to release U.K. industrial output figures. Industrial output is forecast to rise 0.4 percent on a monthly basis after falling 0.4 percent in January. Manufacturing output is expected to edge up 0.1 percent.
The French government aims to raise a maximum of EUR 8.5 billion from the long-term bond auction. The results of the issue are due at 4.50 am ET.
The Federal Ministry of Economy and Technology is scheduled to publish German industrial output at 6.00 am ET. Economists forecast industrial production to drop 0.5 percent month-on-month in February.
The Bank of England is set to announce its monetary policy decision at 7.00 am ET. Policymakers are likely to maintain its GBP 325 billion bond purchases. The central bank is also seen holding its 0.050 percent record low interest rate.
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U.S. Employment Growth Slows In March
Employment growth in the U.S. slowed to 5 percent on a yearly basis in March from 11 percent logged in February, Monster Worldwide said Friday.
On a monthly basis, the employment index remained unchanged at 143 in March.
The report showed that 16 of the 20 industries monitored by the index showed positive annual growth trends. Commerce activity continued to maintain steady momentum with transportation and warehousing, retail and wholesale trade recording solid annual growth rates.
The employment index is a broad and comprehensive monthly analysis of U.S. online job demand conducted by Monster Worldwide based on a real-time review of millions of employer job opportunities culled from a large, representative selection of corporate career sites and job boards.
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China Inflation Rebounds Beyond Expectations
Inflation in China increased more than expected in March after easing to a twenty-month low in February, data from the National Bureau of Statistics showed Monday. The latest rise in inflation rate was mainly driven by rising food costs.
Inflation rose to 3.6 percent in March from 3.2 percent in February. Economists had forecast an increase to 3.4 percent. Food inflation accelerated to 7.5 percent from 6.2 percent in the previous month, partly led by a 6.1 percent annual surge in costs of fresh vegetables.
Last month, Premier Wen Jiabao set an inflation target of 4 percent for 2012, the same as that of 2011. Inflation exceeded the target every month last year due to higher food prices.
The government hiked fuel prices for the second time in less than six weeks in March amid mounting pressure from the country's refineries to respond to the rising international crude prices. This might have added to inflationary pressures with China being the second-largest oil consumer after the U.S.
The price index for transportation and communications rose to 0.3 percent, recovering from February's 0.4 percent fall. Utility costs advanced 2.6 percent year-on-year in March.
The statistical office also noted that the house prices increased 2 percent from the previous year. Wen had pledged to continue property market curbs to rein in prices, which, according to him, are still far from "reasonable levels."
In February, the People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points for the second time in three months to boost growth, but refrained from an interest rate reduction fearing inflation surge from possible spike in global fuel prices.
Separately, the statistical office said that the producer price index fell 0.3 percent from March 2011. The outcome was in line with expectations and followed a flat reading in February. Prices have been falling steadily since July last year.
The government targets 7.5 percent growth for the economy this year, lower than the previous target of 8 percent. The economic growth slowed to 9.2 percent in 2011 from 10.4 percent in 2010.
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U.S. Dollar Weakens On Bernanke Comments
The U.S. dollar declined against most major currencies in early Asian deals on Tuesday after Federal Reserve Chairman Ben Bernanke said that the economy is "far from recovering from credit crisis."
In a speech at the Federal Reserve Bank of Atlanta Financial Markets Conference, in Stone Mountain, Bernanke suggested that US economy is yet to fully recover from the impact of the global financial crisis.
The greenback that closed yesterday's deals at 1.5894 against the pound and 0.9174 against the franc slipped to a new 1-week low of 1.5933 and a 5-day low of 0.9149, respectively. If the U.S. currency falls further, it may target 1.60 against the pound and 0.91 against the franc.
House prices in the United Kingdom improved in March, according to survey results released by the Royal Institution of Chartered Surveyors (RICS).
The RICS Home Price Balance for March was minus-10, compared to minus-13 in February
Against the New Zealand and Australian dollars the greenback reached fresh 1-weeks lows of 0.8242 and 1.0359 from Monday's close of 0.8218 and 1.0316, respectively. The next downside target level for the greenback is seen at 0.83 against the kiwi and 1.04 versus the aussie.
Activity in Australia's construction sector picked up slightly in March but remained in sharp contraction, according to survey results published today by the Australian Industry Group.
AIG's Performance of Construction index for March was 36.2, an increase of 0.6 points from February.
Also, Australia's business conditions improved modestly in March, along with a jump in confidence, a survey by the National Australia Bank (NAB) showed.
The business conditions index rose to 4 in March from 3 in February. The business confidence index advanced to 3 from 1 in the previous month
The U.S. currency dropped to a 5-day low of 1.3145 against the euro with 1.32 seen as the next downside target level. The pair closed Monday's deals at 1.3107.
Looking ahead, Swiss unemployment rate for March, German trade data, French industrial production and U.K. DCLG house prices for February are due in the European session.
At 10:00 am ET, U.S. wholesale inventories data for February is slated for release.
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European Economics Preview: U.K. Producer Price Data Due
Producer prices from the U.K. and final inflation from Germany are the major statistical reports due on Friday, headlining a light day for the European economic news.
The Federal Statistical Office is set to release final Germany inflation data at 2.00 am ET. According to preliminary data, the harmonized index of consumer prices increased 2.3 percent on an annual basis in March, slower than the 2.5 percent growth seen in February.
In the meantime, Statistics Finland is scheduled to publish consumer price figures for March. In February, annual inflation slowed to 3.1 percent from 3.2 percent in January.
At 3.00 am ET, final inflation figures from Spain and industrial production from Hungary are due. Flash estimate published on March 29 showed that EU harmonized inflation in Spain fell to 1.8 percent in March from 1.9 percent.
Half an hour later, Dutch trade figures for February are due.
At 4.00 am ET, Italy's statistical office is slated to release industrial production for February. Economists forecast production to drop 0.5 percent month-on-month after easing 2.5 percent in January.
At 4.30 am ET, U.K. producer price data is due from the Office for National Statistics. Input price inflation is seen easing to 4.8 percent in March from 7.3 percent in February. At the same time, output price inflation is seen at 3.5 percent, down from 4.1 percent in the previous month.
Italy's final inflation figures are due from the statistical office Istat at 5.00 am ET. According to preliminary estimate, inflation, measured by the harmonized index of consumer prices, rose to 3.8 percent in March from 3.4 percent in February.
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Bank Of Korea Cuts 2012 GDP Growth Forecast
South Korea's central bank on Monday lowered its forecast for economic growth this year due to weaker-than-expected world economic growth and higher oil import prices.
Bank of Korea said it expects the gross domestic product to rise 3.5 percent this year, weaker than the 3.7 percent growth forecast in December. For 2013, growth is projected at 4.2 percent.
Export growth is forecast to slow somewhat, owing to the cooling of world trade growth amid recession in the euro area, the bank said. Export growth is expected to ease to 4.8 percent this year from 10.5 percent last year. The latest estimate is also slightly weaker than the December forecast of 5 percent.
On the other hand, private consumption is expected to accelerate to 2.8 percent from 2.3 percent in 2010. This was, nonetheless, lower than the December forecast of 3.2 percent due mainly to deteriorating terms of trade and sluggish fourth quarter performance last year.
The rate of increase in the headline consumer price index is forecast to stand at 3.2 percent in 2012, lower than the previous forecast of 3.3 percent. For 2013, headline CPI is forecast to rise 3.1 percent.
The CPI excluding agricultural and petroleum products is projected to rise 2.6 percent in 2012, slower than earlier forecast of 3.3 percent. The index excluding food and energy is expected to rise 2.2 percent, also down from 2.7 percent forecast earlier.
The unemployment rate is projected at around 3.3 percent for 2012 and 2013, lower than last year's 3.4 percent.
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