Asia
Global Business Fears
'Economic Dislocation' If China-Japan Rift Deepens. Global business leaders are
voicing increasing concern over heightened political tensions between China and
Japan, sparked by a maritime dispute in the East China Sea. They fear an escalation may have a
spill-over effect on their regional operations and damage trade ties between
the world's second and thirdlargest economies. Company executives, diplomats
and analysts told CNBC that supply chains across China and Japan and regional trade
flows are at risk if the territorial dispute between the north Asian neighbors
- believed to be the worst in decades - deepens. (CNBC)
S. Korea Moves To
Maintain Financial Stability. Bank Of Korea (BOK), South Korea's central bank, said yesterday that it has developed its own
systemic risk assessment model for the first time among central banks in Asia,
China's Xinhua news agency reported. The bank said the development of the model
was part of BOK's efforts to better conduct its mandate of maintaining financial
stability granted after the BOK Act's revision late last year. According to the BOK, the model named
"Systemic risk assessment model for macro-prudential policy", will
analyse quantitative systemic risks, including macro risk factors, profits and losses
in the banking sector, losses from macro-financial linkage, risks in the
wholesale funding market under the stringent conditions, multi-period
assessment on banks' balance sheet. (Bernama)
USA
Consumer Confidence
In U.S. Rises To A Seven-Month High. Confidence among American consumers jumped
more than forecast in September as a budding housing recovery and rising stock prices gave households reason to be
more upbeat. The Conference Board’s sentiment index increased to 70.3, the
highest level in seven months, from 61.3 in August, figures from the New
York-based private research group showed today. The reading exceeded the most
optimistic projection of economists surveyed by Bloomberg. Another report
showed home values rose by the most in two years. (Bloomberg)
U.S. Home Prices Rose
More Than Forecast In Year To July. Home prices in the U.S. climbed more than
forecast in July from a year earlier, adding to signs that housing will spur economic
growth. The S&P/Case-Shiller index of property values in 20 cities
increased 1.2 % from July 2011, the biggest 12-month advance since August 2010,
a report from the group showed today in New York. The median forecast of 23
economists surveyed by Bloomberg called for a 1.1 % gain. (Bloomberg)
Europe
Greece Seeks Bailout
Extension At 15bn-Euro Cost. Greece has said it would need as much as 15bn
euros ($19bn) if it were given a two-year extension to its bailout. Finance
Minister Yannis Stournaras told Reuters that the funding gap could be met
without more aid from the eurozone. Greece is trying to qualify for the next
33.5bn-euro instalment of its 130bn-euro bailout, which is backed by the IMF
and the other 16 euro nations. Its neighbours are reluctant to stump up more
money to help Greece. Greece was given a 110bn-euro package in May 2010 and a
further 130bn euros in October 2011. (BBC)
Spain To Activate
Regional Rescue Fund This Week. Spain will this week activate an euro18 billion
(RM70.4 billion) liquidity fund to help its stricken regions finance their
debts, the government said yesterday . A
handful of Spain’s 17 regions have already asked for about euro10 billion from
the fund as they struggle to make spiralling interest payments on their debts.
Deputy Prime Minister Soraya Saenz de Santamaria said the fund would start
operations “this week”. “The Budget
Ministry is preparing the whole procedure
so that on one hand it can dispose of the funds to give them and on the other
set up the mechanism to make those interest payments,” she told Cadena Ser
radio. (AFP)
Funding For Lending:
UK Banks Sign Up To New Scheme. Five of the UK's six biggest lenders have
signed up to the Funding for Lending scheme, designed to stimulate the economy
by making cheaper loans available to firms and individuals. HSBC is the only one
of the top six not taking part, as it says it does not need additional funding.
The Bank of England, which runs the scheme, said 13 banks and building
societies had signed up so far. They
represent 73% of the market and £1.2 trillion
worth of lending. The institutions can borrow the equivalent of up to 5%
of their loan books immediately, and more if they meet certain conditions over the
next year. Based on their current lending levels, the 13 institutions could
initially draw on up to £60bn of Bank of England funding. (BBC)
Currencies
Dollar Turns Up After
Plosser Blasts QE3. The dollar turned higher Tuesday, with the reversal in
course coming after a U.S. central banker criticized the Federal Reserve’s
latest stimulus effort. The ICE dollar index, which measures the greenback’s
performance against a basket of six currencies, rose to 79.673 from 79.573 in
North American trade late Monday. Against the Japanese yen, the dollar changed
hands at ¥77.79, down a bit from ¥77.88 Monday. It climbed above 79 last week,
according to Hastings. The euro edged down to $1.2899 from $1.2923 late Monday,
when it touched its lowest level since Sept. 12. Among other currency crosses, the British
pound slipped to $1.6188 from $1.6211
Monday. The Australian dollar traded at $1.0451 from $1.0423 late Monday.
(Market Watch)
Source: Kenanga
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