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Bank of England's Fisher says does not want U.S.-style QE pledge

Fri, 24 May 2013 17:55:46 +0800

By William Schomberg CARDIFF (Reuters) - A Bank of England policymaker said on Friday he favored small additional amounts of bond purchases over time, but not a hard-to-manage commitment to longer-term stimulus like that of the U.S. Federal Reserve. "I don't think I want to get into the American position of saying it is indefinite and then stopping," said Paul Fisher, one of the British bank's rate-setters. "I think the Americans are finding it a bit hard - as we have seen recently - to get out, because they have got this indefinite horizon. ...

UK may be three quarters of the way through debt purge - Fisher

Fri, 24 May 2013 17:48:36 +0800

CARDIFF (Reuters) - Britain may be as much as three quarters of the way through the process of working off the high debt levels which have weighed on the economy since the financial crisis, a top Bank of England policymaker said on Friday. Paul Fisher, one of nine members of the bank's rate-setting committee, said growth would remain weak while Britain's households, public sector, banks and other companies sought to get themselves back to financial health. ...

Fed's Bullard wants inflation pickup before tapering QE

Fri, 24 May 2013 17:41:33 +0800

LONDON (Reuters) - A top Federal Reserve official said on Friday U.S. inflation would have to pick up before he voted to scale back monetary policy stimulus and that this was unlikely to happen in the coming month. "Before I would be in favor of tapering I would like to see some reassurance that inflation was going to move back towards target," St. Louis Fed President James Bullard said in a CNBC interview. "I am concerned about this inflation number and we are only a little ways out from the June meeting so I don't quite see how that is going to turn around in a few weeks. ...

German business confidence up unexpectedly in May: Ifo

Fri, 24 May 2013 17:29:31 +0800

German business confidence rose unexpectedly in May, data showed on Friday, as businesses in Europe's top economy express satisfaction with their situation and become more optimistic about the future.

Rosy China growth forecasts fade on further signs of slowdown

Fri, 24 May 2013 16:55:06 +0800

By Koh Gui Qing BEIJING (Reuters) - As evidence mounts that China's economy is losing momentum, economists are fast abandoning their rosy recovery forecasts and bracing for what could be the country's slowest growth rate in 23 years. In the space of five months, analysts have swung from confidently predicting a modest pick-up in the world's second-biggest economy to pondering the chance that China will miss its own 7.5 percent growth target this year. ...

Market turbulence poses first serious test for Abenomics

Fri, 24 May 2013 16:07:51 +0800

By William Mallard TOKYO (Reuters) - This week's turbulence in Tokyo markets exposes a key risk of Prime Minister Shinzo Abe's all-in strategy to revive Japan's economy - if investor confidence falters, the government and the Bank of Japan may be left with few options to turn the tide. On Friday, the Nikkei share average had another tumultuous session, traversing a 7.1 percent range between positive and negative territory before ending up 0.9 percent. The violent moves kept investors on edge after a 7. ...

IMF chief questioned for 2nd day

Fri, 24 May 2013 15:33:21 +0800

French prosecutors began questioning IMF chief Christine Lagarde for a second day Friday to decide if she should be charged over a state payout to a disgraced tycoon during her time as finance minister.

Private consumption helps German economy to meager growth

Fri, 24 May 2013 15:22:28 +0800

By Sarah Marsh BERLIN (Reuters) - Robust private consumption helped Germany eke out meager growth in the first quarter, compensating for declines in both exports and investment, and is likely to remain a pillar of support for Europe's largest economy this year. Germany's gross domestic product (GDP) rose by 0.1 percent on the quarter and shrank by 1.4 percent on the year, final seasonally adjusted data from the Statistics Office confirmed. Private consumption added 0.4 percentage points to GDP, while gross capital investment deducted 0.3 points. Foreign trade added 0. ...

Household spending saves Germany from recession

Fri, 24 May 2013 14:31:16 +0800

An increase in spending by consumers and households offset sagging exports and falling investment in Germany in the first quarter, allowing Europe's biggest economy to narrowly avoid recession, official data showed Friday.

Private consumption helps Germany to meagre growth in first-quarter

Fri, 24 May 2013 14:11:15 +0800

Berlin (Reuters) - Private consumption helped Germany eke out meagre economic growth of 0.1 in the first quarter of the year, compensating for declines in exports and investment in Europe's largest economy, data showed on Friday. The seasonally adjusted data from the Federal Statistics Office confirmed an earlier flash estimate showing Germany's gross domestic product (GDP) rose by 0.1 percent on the quarter and shrank by 1.4 percent on the year in the first quarter. Private consumption added 0.4 percentage points to GDP in the first quarter, while gross capital investment deducted 0. ...

Australia economy strong despite end to Ford production: PM

Fri, 24 May 2013 13:53:20 +0800

Australian Prime Minister Julia Gillard moved to allay fears about the economy on Friday saying it had strong fundamentals, after US carmaker Ford announced an end to production in the country.

BOJ Kuroda vows to calm JGBs, guide economy to recovery

Fri, 24 May 2013 12:07:28 +0800

By Leika Kihara TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Friday expressed confidence the central bank can stem bond market volatility with flexible market operations and engineer a steady recovery in the world's third-largest economy. Kuroda said the central bank's aggressive monetary stimulus launched in April was a "necessary and sufficient" step to achieve its 2 percent inflation target, and will stimulate the economy through various channels including by directly influencing borrowing costs. ...

Special Report: The deeper agenda behind "Abenomics"

Fri, 24 May 2013 11:51:19 +0800

By Linda Sieg, Yuko Yoshikawa and Tetsushi Kajimoto TOKYO (Reuters) - When ill health and political gridlock forced Shinzo Abe to quit after one dismal year as Japan's prime minister, his pride was dented and his self-confidence battered. One thing, however, was intact: his commitment to a controversial conservative agenda centered on rewriting Japan's constitution. Conservatives see the 1947 pacifist charter, never once altered, as embodying a liberal social order imposed by the U.S. Occupation after Japan's defeat in World War Two. ...

Venezuela, Russia in joint oil venture

Fri, 24 May 2013 09:56:26 +0800

Venezuela and Russia formed a joint venture to produce 120,000 barrels of oil a day by 2016 in two fields in the Orinoco Heavy Oil Belt.

Jobs, housing data show economy has some muscle

Fri, 24 May 2013 08:49:45 +0800

By Lucia Mutikani WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits fell last week, pointing to resilience in the labor market despite belt-tightening by Washington. The improving employment picture is helping to prop up housing, with rising home prices keeping domestic consumption supported, limiting the drag from tighter fiscal policy that is dampening factory activity. "All the eggs are in housing and the consumers' baskets this quarter. ...

Japan economics minister - 'Abenomics' proceeding smoothly

Fri, 24 May 2013 08:23:52 +0800

TOKYO (Reuters) - Japan's "Abenomics" economic policies are proceeding smoothly with the government determined to map out its growth strategy by midyear, Economics Minister Akira Amari said on Friday. "The government is steadily making progress with steps to revive Japan's economy. I don't see any problems there and things are going smoothly," Amari told a news conference after a cabinet meeting. He declined to say whether Thursday's sharp fall in share prices was a temporary move. Amari also said Bank of Japan Governor Haruhiko Kuroda was communicating well with markets to soothe volatility. ...

Analysis: Markets face rough summer ride as Fed pullback feared

Fri, 24 May 2013 07:37:04 +0800

By Rodrigo Campos NEW YORK (Reuters) - For the past few months, the Federal Reserve has been squarely in the financial markets' corner, thanks to its massive dollops of monetary stimulus. But signs that the central bank is discussing reducing that support by purchasing fewer bonds mean that trading is likely to get bumpier in coming months. The Fed's evolving stance was made apparent by Federal Reserve chairman Ben Bernanke's remarks to Congress Wednesday, where he laid out the conditions that might cause the Fed to reduce its $85 billion a month buying of Treasuries and mortgage-backed bonds. ...

Polish PM wants early party leadership election - media

Fri, 24 May 2013 05:26:19 +0800

WARSAW (Reuters) - Polish Prime Minister Donald Tusk wants to bring forward an election for the leadership for his party so he can face down rivals emboldened by the worsening state of the economy, local media said on Thursday. Tusk's Civic Platform was expected to hold an election early next year for the post of party leader, currently held by the prime minister, but Tusk said at a party meeting he wanted them in July, the TVN24 broadcaster quoted party sources as saying. Members of Civic Platform's executive were not immediately available to comment. ...

Sushi's Abenomics wave: posh tuna in, plain mackerel out

Fri, 24 May 2013 05:09:35 +0800

By Taiga Uranaka TOKYO (Reuters) - Investors in Japan might keep a close eye on sales of the homely horse mackerel as an early warning of any trouble ahead. The good news is that in the more confident Japan of 2013, tuna remains king. So says Mizuho Securities economist Kenta Ishizu, who believes he has found a leading indicator of Japanese consumer demand that relies on two of the most common items on a sushi menu: Japanese horse mackerel and tuna. ...

France says dropping idea of cap on executive pay

Fri, 24 May 2013 04:57:12 +0800

PARIS (Reuters) - The French government has decided to drop a plan to impose a ceiling on executive pay in the private sector, though it will go ahead with a two-year super-tax on firms paying million-euro salaries, Finance Minister Pierre Moscovici said. Moscovici told the daily Les Echos in an interview that the year-old Socialist government wanted to support business and job creation, and was working to accelerate the take-up of tax credits aimed at lowering companies' labour costs. ...

Oil recovers after dive on Chinese data

Fri, 24 May 2013 04:43:14 +0800

Global oil prices closed little changed Thursday, recovering from sharper losses earlier in the day after weak Chinese manufacturing data.

ECB can't solve euro zone crisis alone - Weidmann

Fri, 24 May 2013 04:35:18 +0800

By Ingrid Melander PARIS (Reuters) - Bundesbank chief Jens Weidmann said on Thursday it was not up to the European Central Bank to solve the euro zone crisis, resisting pressure from other ECB policymakers for the bank to widen its range of policy tools. Speaking in Paris, Weidmann declined to comment on U.S. Federal Reserve chairman Ben Bernanke's remarks that the U.S. central bank may start to trim its bond purchases at one of its next policy meetings. ...

Libya economy surges following revolution: IMF

Fri, 24 May 2013 03:05:39 +0800

Libya's economy surged 105 percent in 2012 and should grow 20.2 percent this year, as it continues recovering from the meltdown that accompanied the uprising that ousted Moamer Kadhafi, the IMF said on Thursday.

Fed officials stress no rush to exit, not on 'autopilot'

Fri, 24 May 2013 02:25:08 +0800

(Reuters) - The Federal Reserve will not hastily withdraw its policy stimulus for the U.S. economy, a senior U.S. central banker said on Thursday, while another stressed that it could adjust the pace of bond purchases both up or down according to the data. Seeking to temper investor concerns that the Fed was quickly moving to end its ultra-easy monetary policy, St. Louis Fed President James Bullard said in London that he did not think the Fed was "that close" to taking any such decision. ...

EU seeks China accord as first step to trade deal

Fri, 24 May 2013 01:47:36 +0800

The EU wants to negotiate an investment protection accord as a first step towards a wider Free Trade Agreement with China, one of its biggest trading partners despite a series of tit-for-tat disputes, EU officials said Thursday.

UN sees weak economic recovery this year

Fri, 24 May 2013 01:16:07 +0800

The world economy should start to make a weak recovery this year, but the United Nations said Thursday that Japan faces "risks" with its pump-priming spending and saw no end to Europe's unemployment agony.

Euro zone slump eases in May but points to contraction in second quarter - PMI

Fri, 24 May 2013 01:00:39 +0800

By Andy Bruce LONDON (Reuters) - The downturn across euro zone businesses eased slightly this month, although a dearth of new orders means the bloc's economy is likely to contract again in the second quarter, business surveys showed on Thursday. Markit's flash Euro zone Services PMI, which surveys around 2,000 companies ranging from major banks to caterers, rose in May to 47.5, a three-month high, from 47.0 in April. While that was a little better than economists polled by Reuters expected, the PMI has now spent 16 straight months below the 50 mark that divides growth and contraction. ...

Column: The many interpretations of Ben Bernanke

Fri, 24 May 2013 00:43:18 +0800

(Anatole Kaletsky is a Reuters columnist but his opinions are his own.) By Anatole Kaletsky (Reuters) - On Wednesday in Washington, Federal Reserve Chairman Ben Bernanke presented congressional testimony that repeated, virtually word for word, statements about U.S. monetary policy he has been making since last September. The Federal Reserve, Bernanke said, would continue buying $85 billion of bonds monthly until it was confident of reducing unemployment to 6.5 percent. ...

U.S., China factories struggle; Fed hints at less stimulus

Fri, 24 May 2013 00:28:17 +0800

By Andy Bruce and Steven C. Johnson LONDON/NEW YORK (Reuters) - Chinese factory activity declined in May for the first time in seven months and U.S. manufacturing grew at its slowest pace since October, suggesting it may take a while before the global economy starts to pick up steam. Thursday's downbeat business surveys from the world's two largest economies came a day after Federal Reserve Chairman Ben Bernanke spooked markets by hinting that the U.S. central bank could soon scale back monthly bond purchases, provided the economy maintained its recent momentum. ...

Italy aims to cut labour taxes in first 100 days - Saccomanni

Thu, 23 May 2013 23:37:45 +0800

ROME (Reuters) - Italy's government plans to cut labour taxes within a few months, funding the measure by reducing public spending, Economy Minister Fabrizio Saccomanni said on Thursday. "The government plans to in the first 100 days to start cutting taxes on houses and jobs, funding it with spending cuts and measures to fight tax evasion," Saccomanni said at a news conference in Rome. "This is the programme, we'll see how long we have to carry it out," Saccomanni said, in a reference to how long Prime Minister Enrico Letta's fragile left-right coalition might last. ...

Rebound in key sectors seen driving Kenya economy in 2013

Thu, 23 May 2013 22:49:02 +0800

By Duncan Miriri NAIROBI (Reuters) - Kenya's economy is expected to expand by about 6 percent in 2013 thanks to a rebound in sectors such as manufacturing and financial services, officials said on Thursday. The country's $35 billion economy expanded by 4.6 percent last year, only a touch more than in the previous year, as activity was slowed by high costs and political uncertainty. ...

US new home sales jump in April

Thu, 23 May 2013 22:43:13 +0800

Sales of newly built homes in the United States jumped in April and prices surged as demand picks up against a still constricted supply, the Commerce Department said Thursday.

Largest Bulgarian party clears way for new government

Thu, 23 May 2013 22:31:44 +0800

By Angel Krasimirov SOFIA (Reuters) - Bulgaria's largest party GERB declined on Thursday to try to form a new government, opening the way for the rival Socialists to put together a technocrat administration and end a political impasse. Seeking to break a deadlock that could undermine the European Union's poorest economy, President Rosen Plevneliev immediately passed the baton to the Socialists, whose proposed government could be voted on next week. ...

New home sales rise, prices surge to record highs

Thu, 23 May 2013 22:06:17 +0800

(Reuters) - Sales of new single-family homes rose 2.3 percent in April, and prices climbed to record high levels, offering strong proof the sector's rebound trend is intact. The Commerce Department said on Thursday sales increased to a seasonally adjusted annual rate of 454,000 units. Economists polled by Reuters had expected sales to rise to 425,000-unit rate last month. The median sales price for a new home was $271,600, up 14.9 percent from a year ago, and the highest on record since the Commerce Department began tracking the data in the early 1960s. ...

S.African repo rate held steady at 5 percent

Thu, 23 May 2013 22:05:15 +0800

PRETORIA (Reuters) - South Africa's Reserve Bank left its repo rate unchanged as expected at 5 percent on Thursday, citing concerns about the inflationary impact of a lower rand exchange rate against a weakening economic growth outlook. All but one of 25 economists polled by Reuters last week expected the Bank to keep rates on hold, and the majority forecast steady rates throughout 2013. ...

Exclusive: China urbanization plan hits roadblock over spending fears - sources

Thu, 23 May 2013 21:44:25 +0800

By Kevin Yao BEIJING (Reuters) - China's plan to spend $6.5 trillion on urbanization to bolster the economy is running into snags, sources close to the government said, as top leaders fear another spending binge could push up local debt levels and inflate a property bubble. Premier Li Keqiang has rejected an urbanization proposal drafted by the National Development and Reform Commission (NDRC), seeking changes to put more emphasis on economic reform, according to the sources, who are familiar with the matter. ...

Dutch to cut up to 12 percent of civil service jobs in five years

Thu, 23 May 2013 21:40:07 +0800

AMSTERDAM (Reuters) - Job cuts in the Dutch civil service will go deeper than initially planned, affecting up to one in eight employees over the next five years as the Netherlands pushes ahead with austerity measures. Prime Minister Mark Rutte, re-elected in September, has had to cut billions of euros from the budget to bring the deficit down, although it is still expected to exceed the European Union's target of 3 percent of economic output this year and possibly next. ...

Exclusive: China urbanisation plan hits roadblock over spending fears - sources

Thu, 23 May 2013 21:28:24 +0800

By Kevin Yao BEIJING (Reuters) - China's plan to spend $6.5 trillion (4.31 trillion pounds) on urbanisation to bolster the economy is running into snags, sources close to the government said, as top leaders fear another spending binge could push up local debt levels and inflate a property bubble. Premier Li Keqiang has rejected an urbanisation proposal drafted by the National Development and Reform Commission (NDRC), seeking changes to put more emphasis on economic reform, according to the sources, who are familiar with the matter. ...

Egypt to issue smart cards to fuel stations next month

Thu, 23 May 2013 21:24:59 +0800

CAIRO (Reuters) - Egypt will begin using smart cards in the next few weeks to distribute gasoline and diesel, Oil Minister Sherif Haddara said on Thursday, in a step towards meeting IMF terms for a loan. The first smart cards will go to fuel stations and then the program will widen to include all car owners. The government is turning to smart cards to reduce the amount of money it spends on subsidized energy products, which eat up a fifth of all state spending. The International Monetary Fund is asking Egypt to act to reduce its budget deficit in return for a $4.8 billion loan. ...

Factory activity slips to seven-month low in May: Markit

Thu, 23 May 2013 21:17:33 +0800

NEW YORK (Reuters) - Manufacturing slowed for a second straight month in May as weak overseas demand and government belt-tightening at home led to the sector's most sluggish rate of growth since October, a survey showed on Thursday. Financial data firm Markit said its "flash," or preliminary, U.S. Manufacturing Purchasing Managers Index fell to a seven-month low of 51.9 in May from 52.1 the previous month. A reading above 50 indicates expansion. The output subindex slipped to 52.8 from 53.7. The pace of hiring slipped to 52.2 from 53.2, the slowest since October. ...