Asia
China Protests: Fears
Rise Over Japan-China Trade Ties. There are fears over the economic impact of
the dispute between China and Japan if the row over islands in the East China
Sea is not resolved soon. Several major Japanese companies have suspended operations
in China after attacks on shops and car dealerships. Shares in some of those
firms fell in Tokyo on Tuesday. The Japanese government has asked Beijing to do
more to protect Japanese businesses. Trade between China and Japan is worth
about $345bn. (BBC)
China August Home
Prices Rise On Month, Fall On Year. China's home prices rose 0.1 % in August
from July, to show a modest increase for a second consecutive month and
signal a gentle recovery in the property
market as the government seeks to spur economic growth. Real estate, which
directly impacts around 40 other business sectors in China, is a key driver in
the world's second largest economy, which is currently going through its worst
slowdown in three years as growth in exports and factory output falls. August's
1.4 % year-on-year price fall was the sixth successive easing, according to
Reuters calculations based on National Bureau of Statistics (NBS) data released
on Tuesday. (Reuters)
Turkey Cuts Rates
First Time In 7 Months As Economy Slows. Turkey’s central bank cut interest
rates for the first time in seven months
in response to lower- than-forecast inflation and slowing economic growth. The
bank in Ankara reduced its overnight lending rate, the top end of its
interest-rate corridor, by 150 basis points to 10 %, according to its website.
Six economists surveyed by Bloomberg had expected a 100 basis-point reduction.
The bank held its benchmark one-week repo rate at 5.75 %, in line with
forecasts. It’s the first change in the corridor since a cut of 100 basis
points to the top rate in February. (Bloomberg)
USA
Current-Account Gap
In The U.S. Narrowed In Second Quarter. The current-account deficit in the U.S.
narrowed more than forecast in the second quarter, helped by a pickup in
exports and a bigger income surplus. The gap, the broadest measure of
international trade because it includes income payments and government
transfers, shrank 12 % to $117.4 billion from $133.6 billion in the prior quarter,
a Commerce Department report showed today in Washington. The median forecast of
economists in a Bloomberg survey called for a $125 billion deficit. (Bloomberg)
International Demand
For U.S. Assets Rises On Europe. International purchases of U.S. financial
assets rose more than sevenfold in July as investors sought shelter from the
debt crisis in Europe. Net buying of long-term equities, notes and bonds
totaled $67 billion during the month, up from net purchases of $9.3 billion in
June, the Treasury Department said today in Washington. Economists surveyed by
Bloomberg projected net buying of $27.5 billion of long-term assets, according
to the median estimate. (Bloomberg)
Fedex Cuts Forecast
As Economy Hurts Premium Shipping. FedEx Corp. dropped the most in three months
after cutting its annual profit outlook because a weakening economy has
prompted shippers in the U.S. and overseas to switch to cheaper delivery
options. FedEx, an economic bellwether because it ships goods from financial
documents to electronics, pared its forecast for 2012 U.S. expansion to 1.9 %
from a June prediction of 2.4 %. Global growth will slow to 2.3 % this year and
2.7 % in 2013, FedEx said, pulling back on projections of 2.4 % and 3 %,
respectively. (Bloomberg)
Europe
Spain: Banks' Bad Debts At New Record. The value of bad debts held
by Spain's banks in July rose to 169.3bn euros ($221bn), according to latest
figures from the central bank. The Bank of Spain said 9.9% of banks' total
loans were in arrears, up from 9.4% a month before. It was the highest bad loan
ratio since the central bank began compiling the data in 1962. Spain is
assessing the conditions of assistance from the European Central Bank, its
deputy prime minister said. (BBC)
German Investor
Confidence Rises First Time Since April. German investor confidence rose for
the first time in five months in September after the European Central Bank
unveiled a plan to buy government bonds to stem the sovereign debt crisis. The
ZEW Center for European Economic Research in Mannheim said its index of
investor and analyst expectations, which aims to predict economic developments
six months in advance, climbed to minus 18.2 from minus 25.5 in August.
Economists forecast a gain to minus 20, according to the median of 41 estimates
in a Bloomberg News survey. (Bloomberg)
UK Inflation Rate
Eases In August, ONS Says. The pace of price rises slowed in August compared
with the previous month, official figures have shown. The annual rate of
inflation in the UK, as measured by the Consumer Prices Index (CPI), fell back
to 2.5% in August from 2.6% in July, the Office of National Statistics said.
The fall was partly due to smaller rises in furniture and gas prices. (BBC)
Currencies
Dollar Up A Second
Day After Big Drop. The dollar rose for a second session on Tuesday, as traders
were unsure whether the “risk rally” in equities and commodities could continue
in the face of unrest in China and Europe’s simmering banking problems. The ICE
dollar index, which tracks the U.S. unit against six major currencies, rose to
79.226, from 79.045 in late trading on Monday. It lost
1.8% last week, its swiftest decline since October. The euro
fell to $1.3042, from $1.3094 the previous session. The shared currency saw
little lasting impact from a rise in the ZEW expectations index for German investors.
Against the Japanese yen, the dollar traded at ¥78.89, up from ¥78.74. The aussie fell to $1.0444, down from $1.0459
Monday. The British pound traded at
$1.6245, little changed from $1.6238 Monday. (Market Watch)
Commodities
Oil Down A Second Day
On Economic Concerns, Saudi Pressure. Oil futures fell for a second straight
session on Tuesday, pressured by concerns about sputtering global economic
growth and by indications that OPEC's top producer Saudi Arabia is working to
drive down prices. Brent November crude
fell $1.76 to settle at $112.03 a barrel. A combined 4.25 % loss to start this
week was the biggest two-day %age drop since June 21, according to Reuters
data. Brent fell as low as $111.61, below the 200-day moving average of $111.87,
a technical level tracked by traders. U.S. October crude fell $1.33 to settle
at $95.29 a barrel, below the 200-day moving average of $96.57. After reaching
$97.23, the $95.11 low was hit in post-settlement trading. The October contract
expires on Thursday. U.S. November crude fell $1.33 to settle at $95.62.
(Reuters)
Platinum Slides As
Miners Accept Labor Deal, Gold Up. Platinum fell 2 % on Tuesday following news
that striking platinum miners at South Africa's Lonmin mine accepted a pay
offer that could have them returning to work on Thursday. Spot platinum dropped
2.2 % to $1,623.75 an ounce by 2:32 p.m. EDT on Tuesday, having lost nearly 4.5
% in the past two days. Palladium was down 1.7 % at $661.75 an ounce. Spot gold
rose 0.3 % to $1,765.95 an ounce. Silver rose 1.1 % to $34.57 an ounce.
(Reuters)
Source: Kenanga
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