China has spent on R&D even more than Japan this year ranking 2nd biggest spender after US. China plans to invest in R&D 2.2% of GDP in R&D by 2015. The number of applications for protecting IPR has also increased indicating substantial growth of innovation in the country.
According to data released, UK inflation in October eased more than expected reaching 5% or 0.1% percentage point below forecast. Mervyn King, Governor of Bank of England said that inflation is likely to keep slowing down in upcoming months, however, its pace and extent is hard to predict. King pointed out that Bank of England purchases bonds for a second month in a row to
In October retail sales in US increased by 0.5% or 0.2 percentage points more than predicted. The main contribution to growth came from demand for motor vehicles and iPhones. In electronics industry purchases experienced most rapid growth since 2009. According to Millan Mulraine, TD Securities senior strategist in New York, an increase in retail sales is indicating that consumers do not expect economy to fall
On Tuesday Italian 10-year domestic bonds dropped sharply, pushing yields above 7% level. According to FactSet Research, the yield hit 7.01% or 43 basis points up compared to Monday. Borrowing rate of 7% is perceived as psychologically important as it indicated the point, where Greece and Portugal were locked out of money markets. Italy's 10-year borrowing cost surged above 7% also last week on political
On Monday US equities slipped as Italian borrowing costs surged, pressing euro down and rising investors' concerns about further expansion of Eurozone debt crisis. S&P 500 Index lost 1% or 12.06 points reaching 1,251.79, Dow Jones Industrial Average decreased 0.6% or 74.7 points to 12,078.98 while Nasdaq Composite dropped 0.8% or 21.53 points to 2,657.22.
Spanish 10-year national bond yield peaked back breaking 6% first time in 3 months, reaching 6.07%. Premium required by investors to provide financing for Spain exceeds price demanded from Germany by 4.25 percentage points. According to Nick Stamenkovic, RIA Capital in Edinburgh, economist, it seems, investors are changing their direction towards Spain.
US Supreme Court decided to consider the legality of President Obama's health care law. The judges will assess whether Congress surpassed its rights by forcing people either to purchase insurance even in case they are ready to pay for health services themselves or to pay penalty. The court is likely to have major impact on presidential campaign as the verdict will be announced in June,
Moody's Investors Service is considering downgrading Credit Suisse Group AG's credit rating as the bank reported loss and revenue at the wealth management dropped. Moody's set Credit Suisse's Aa1 and Aa2 ratings on assessment for a reduction. On November 1 Credit Suisse announced it will reduce nearly 1500 jobs and review its securities after reporting quarterly loss.
On Tuesday representatives of IMF warned China that its banking system is exposed to serious risk. IMF named uncertain national banks' asset quality, credit boom accompanied by rising property prices and lending outside prescribed banking sector as the main threats to Chinese financial intermediaries. According to IMF, Chinese banking system is likely to be seriously affected if several risks create difficulties simultaneously.
Interim PM of Greece insisted on Greece staying in the Eurozone as it is the only option to struggle with crisis. He also stressed the necessity of activating bailout package as soon as possible. Making decisions and implementing policies in line with these decisions is of paramount importance for government, added Papademos.
Bank of America plans to sell 10.4bn of China Construction Bank shares for about $6.6bn in cash. Bank of America is under pressure because of global crisis and bad loans. The bank has to increase its capital base in compliance with new global regulation Basel III that obliges banks to have higher capital to asset ratio.
Asian stocks experienced a sharp decline as Italian and Spanish borrowing costs surged; rising concerns among investors that debt crisis might strengthen. Japan's Nikkei Stock Average lost 0.6%, Hang Seng Index trader 1.1% lower while China's Shanghai Composite fell 0.1%. Australia's S&P/ASX 200 slipped 0.4% whereas South Korea's Kospi decreased 0.6%.
Mario Monti expressed his intention to be in charge of PM of Italy until elections in 2013 . It will be difficult for Italy to overcome financial problems, but the country is strong enough to survive, he said. Despite sound promises and start of formation of new administration, investors' confidence remains low and Italy's 10-year bonds still yield more than 6%.
Mario Monti, prospective Italian PM met political resistance on creating a government as Italian borrowing costs surged and markets returned to downward trend, indicating concern on whether he will be able to tackle debt turmoil. Yesterday Monti strained to make parties agree on taking part in his new government. Monti pointed out that without their support he will not be able to end debt crisis.
Japan's GDP grew first time after March's earthquake; the indicator was up by 1.5% in Q3. However, analysts fear the growth is not sustainable because of strong yen and global fiscal problems. Moreover, floods in Thailand impacted Japanese supply chain thus affecting the recovery after slowdown. Exports are also likely to fall thus hindering Japan's recovery, said Yamamoto.
Chancellor Angela Merkel claimed it is essential to comprise political coalition in Europe to ensure bondholders that euro-region officials are sober about tackling debt turmoil. Merkel emphasized that all 17 euro zone countries should stick to common currency, though serious changes in current policy should be implemented. Chancellor also suggested in order to regain bondholders' confidence, EU and euro region should grow simultaneously.
On Monday morning session European stocks experienced a decline offsetting returns inspired by the nomination of new Italian PM. Stoxx Europe 600 index lost 0.3% reaching 240.27, German DAX 30 index dropped 0.2% to 6,043.59 while CAC 40 index decreased 0.5% to 3,133.73. FTSE 100 index remained flat at 5,545.27 and only Italy FTSE MIB index kept increasing to 15,863.97, attaining 0.5%.
US Labor Department announced initial claims for unemployment benefits decreased by 10000 to 390000. MarketWatch predicted it to be 398000. However, the situation in the country is still difficult as only 80000 job places were created in October while 250000 jobs per month are necessary to satisfy natural increase in labor force. US unemployment rate is 9% in October.
On Sunday the officials of Asia-Pacific Economic Cooperation (APEC) summit presented a Honolulu Declaration according to which they are pledged to create a unified regional economy. Declaration emphasized that global challenges have strengthened APEC members' willingness to cooperate. According to APEC leaders, trade liberalization will play a key role in global recovery.
In view of the global economic problems participants of the APEC summit agreed that further liberalization of trade is of critical importance for sustainable growth in future. At summit US president discussed US enlargement plans in Asia-Pacific region and his free-trade agreement, called Trans Pacific Partnership. Other North American countries as Canada and Mexico also are interested in joining Asian-Pacific free-trade zone.
N.Z. dollar advanced against US dollar two days in a row after government reported 5-year record increase in retail sales. Aussie and kiwi strengthened against greenback as Asian stocks rallied on investors' optimism about Greece's and Italy's new leadership. In Sydney evening trading session New Zealand dollar gained 0.2% to USD reaching $0.7869, while Aussie added 0.2 % to $1.0292.
After booming prices in property market the industry has started to cool down. The government tightening policies have led to an overall fall in real estate prices. Prices for new apartments in Beijing dropped by 5.1%. Analysts fear that restriction policy may impact country's economic growth. However, officials announced no changes in policy and continuation of price decrease in the industry.
The China Banking Regulatory Commission announced that three banks can issue 110 billion yuan bonds to provide loans for micro- and small-enterprises. The measure is aimed at stimulating development of small firms as they experience difficulties in raising finance, especially after government's credit restriction policies. Loans to small companies amounted 8.8% of all loans in September.
In the light of the recent developments in Europe the stability of the Eurozone is under threat. Reforms aimed at euro stabilization will be difficult to implement but the collapse of single currency will lead to a catastrophe, said Tony Blair. Eurozone has to coordinate its tax and spending to sustain euro and recover after recession, he added.