Hong Kong parliament plans keep holding restrictions on the property market despite the fact that sales in housing market have lost 50% in September compared with corresponding month previous year. According to Donald Tsang, Chief Executive at Hong Kong, country's economy is experiencing soft landing and government will not abandon curbs until temperance in prices will be reached.
In September the rate of open vacancies has increased significantly attaining three years high demonstrating some firms are preparing for economy recovery. According to Labor Department statistics, new vacancies advanced by 225,000 reaching 3.35 million while hiring increased by 185,000 making up 4.25 million. Nevertheless, according to Fed chairman Ben S. Bernake, hiring still grows at insufficient pace to decrease unemployment.
In October CPI increased by 5.5% falling behind September rate of 6.1%. The inflation decelerated reaching 3 years low, providing government more space to support economy growth as manufacturing slows down. Economists surveyed by Bloomberg expect PM Wen Jiabao to ease monetary or fiscal policy in the same time avoiding cutting key lending rates as inflation remains above yearly objective of 4%.
Christine Largarde, Managing Director of International Monetary Fund has pointed out that the world economy is exposed to "lost decade" in case nations together will not tackle threats to financial system. According to her all regions are mutually dependent and cannot restore growth alone. Lagarde also claimed advanced economies should held responsibility for promoting economy development and rebuilding confidence.
The number of citizens who leave China to live and work abroad has been increasing rapidly. According to survey made by China Merchants Bank and Bain & Co, nearly 60% of rich Chinese had applied or thought of obtaining foreign residency. Zhang Monan, State Information Researcher claims that emigration of rich can negatively affect expansion of middle class and therefore government should reduce both tax
Chinese stock market has been deteriorating in last two days as railway companies and developers express their concern the parliament will not abandon property restrictions even under conditions of falling sales and decreasing rail investment. Shanghai Composite Index lost 0.2% or 5.96 points closing at 2,503.836 while CSI 300 Index lost 0.3% reaching 2,727.71.
US equities and Euro currency experienced increase, offsetting previous losses as Premier Silvio Berlusconi offered to quit. His resignation reinforced optimism a new PM will tackle the country's debt crisis. Standard & Poor's 500 Index jumped 1.2% and closed at 1,275.92 in New York trading session while Euro surged against 11 out of 16 major counter currencies and reached $1.3839.
According to Nigel Gault, IHS Global Insight economist, President Obama is inconsistent in his statements regarding recession timing. In some of his speeches he refers to US post-recession situation while in others Obama mentions current existing recession in present tense. Nigel Gault suggests such inconsistencies rise doubts in voters whether economy have recovered and does Obama deserve to be re-elected.
Premier Berlusconi proposed his resignation after Italian government approves requirements received from European counterparties said President Giorgio Napolitano. PM agreed to step down after he lost majority in routine budget vote getting 308 votes of 630.Parliament has to come up with final version of proposed budget cuts. The vote on austerity measures is expected to take place next week.
In China Minsheng Banking Corp. has received regulatory permission to sell $7.9 bn (50 bn yuan) of bonds to promote borrowing among small companies. The approval provided by China Banking Regulatory Commission is a part of Chinese government's plan to support small firms, create jobs and promote innovations. The permission of bond sale still has to be approved by People's Bank of China.
Commerzbank AG and BNP Paribas SA are getting rid of sovereign bonds by anticipating losses on sale. BNP Paribas took losses of €812 m from cutting holdings of Euro zone sovereign debt. Commerzbank AG has reduced its Spanish, Portuguese, Greek, Italian, and Irish bonds by 22%. By unloading sovereign bonds banks may undermine EU officials' efforts to reduce borrowing costs and worsen region's crisis.
In 3rd quarter the rent for office space in Asia-Pacific region have increased at double velocity compared to global trends, as China's economic growth boosted demand for business type property. Charges for top quality office space in Asia-Pacific area gained 10.5% on yearly basis. In contrast, global rate for rent added only 5.5%. Leading contributors to rent growth were Perth, Bangalore and Shanghai.
Drop in Australia's gold exports was more rapid than a fall in fuel imports in September. Therefore Australia's net export surplus declined more than was predicted by economists. Exports surpassed imports by A$2.56 bn or about A$0.5bn less than was predicted by economists surveyed by Bloomberg. Australian trade surplus may decrease even more as prices for iron ore deteriorate.
Poland will stick to key lending rate unchanged in order to protect destabilised zloty and avoid boosting inflation. Central bank's current interest rate is the highest in three years. Economists surveyed by Bloomberg suggest the Poland's central bank will leave repo rate unchanged at 4.5%. The decision is going to be revealed on Wednesday.
Top Banks may face bigger capital surcharges BNP Paribas SA, JPMorgan Chase & Co, Royal Bank of Scotland, HSBC Holdings Plc and Citigroup Inc. may face highest capital supplements of 2.5%. Bank of America Corp, Barclays Plc, and Deutsche Bank AG may encounter capital surcharge of 2%. The list of banks was developed by global supervisors in order to press banks whose bankruptcy could harm the worldwide
Lloyds Banking Group admits they may fail to accomplish their financial goals despite the lowered provisions for bad debt in 3rd quarter. Lloyd's pre-tax profit decreased from ВЈ820m pounds in 2nd quarter to ВЈ644m in 3rd creating a total of 21% decline in profits. As economists are not expecting repo rate increases from BoE, Lloyds may have to restrain its margins and postpone income objectives set for
Hong Kong's GDP, an indicator of global growth, experienced 1.5% decline in 3rd quarter as compared to previous quarter. In September, the exports of Hong Kong Hong contracted first time in two years. Amid Europe debt crisis, Hang Seng Index lost 21%, the most significant loss in 10 years. Raymond Yeung, ANZ economist in Hong Kong suggested the economy is fading on external environment's weakness.
On Tuesday Asian markets moved on contrasting directions. Japan's Nikkei Stock Average lost 1.3%, China's Shanghai Composite dropped 0.2%, while South Korea's Kospi slipped 0.8%. In contrast, Hong Kong's Hang Seng Index closed flat and Australia's S&P/ASX 200 index gained 0.5%. Positive moves were associated with hopes that Greece will obtain next funding package, whereas declining indices reflected investors' concerns regarding Italy political chaos.
EU financial leaders are planning to start implementation of bailout programmes in December. Greece is required to deliver written approval of bailout rules to receive EUR 8.0 bn credit in one month. Italy is ordered to bring expenditure cut into reality. According to Olli Rehn, EU Monetary Commissioner, it is crucial for both countries to restore the political confidence.
Premier George Papandreou and opposition leader Antonis Samaras have made a step closer to name the new prime minister of Greek Unity parliament, said Elias Mosialo, Greek parliament spokesperson. The agreement on new PM is essential in order to secure funding from EFSF. Today the talks will continue in Athens.
According to survey done by Federal Reserve, the number of banks that lessened business loan conditions has decreased in the 3rd quarter. Creditors have also squeezed loan terms on debt to European financial institutions and their partners. About 50% of US banks admit they have provided loans to European contemporaries and consider tightening as reasonable strategy amid EU debt crisis.
Indonesian GDP added 6.54% throughout July to September. The country experiences growth for a 4th quarter indicating economy recovery. National consumption together with exports and investment are the main contributors to Indonesia growth. According to Dariusz Kowalczyk, Credit Agricole CIB strategist, the growth proves country's strength against external global weakness. Nevertheless, Bank Indonesia said, it is not planning to decrease borrowing rates.
UK retail business faced a decline in October rising traders concerns about approaching Christmas sales. According to British Retail Consortium (BRC), trading at shops opened in last 12 months has decreased by 0.6 % compared to previous year. Significant drop in sales was detected also in furniture and food industries. Stephen Robertson, BRC general director claimed a fall in sales to indicate weak consumer confidence.
US equities experienced increase after Juergen Stark, the ECB's executive board member claimed the Eurozone debt turmoil will be restrained and controlled in two years. S&P 500 gained 0.6% reaching 1,261.12 in New York evening trading session while Dow added 0.7& climbing to 12,068.39 today. According to Stark, in two years Eurozone won't need political intervention.