Top Stories
U.S. trade, jobs figures point up, but wholesale inventories drop
U.S. exports were surprisingly strong in June, with growth of $1.7 billion over May's total helping to cut the country's trade deficit to its narrowest reading in 18 months. Separately, new U.S. claims for unemployment benefits dropped to 361,000 in the latest week, a further sign of a recovering job market. On the downside, wholesale inventories were down in June amid poor sales, indicating that consumer confidence continues to lag.
Central banks in Asia follow others, leave rates steady -- for now
Central banks in Japan, South Korea and Indonesia left their key interest rates unchanged Thursday, in line with their counterparts in the U.S., Europe and Australia. But analysts regard this as more of a wait-and-see situation than a vote of confidence, given the unsteady state of the global economy and the likelihood that monetary easing will soon be needed.
China industrial output, retail sales show weakness
Growth in China's factory output was at a three-year low and retail sales fell short of forecasts in July as effects of the eurozone crisis and other global ills began to take a heavier toll. With stimulus already under way, the fear is that government measures might not be enough to raise growth in the face of worldwide factors.
China, Taiwan sign investor-protection pact
China and Taiwan have signed an agreement designed to protect Taiwanese investors in mainland business ventures. It is seen as a sign of further progress in cross-strait trade relations.
With jobless rate reaching a record, Greece plans more cuts
The Greek bailout may come under additional pressure as the country's unemployment rate soared to a record 23.1% amid government plans for still more public servant layoffs as demanded by lenders. In the past two elections, mainstream parties that favored staying in the euro and vowed more budget cutting suffered major losses of support.
Steep drop in U.K. exports cancels one hope for recovery
A surprisingly sharp 8.4% drop in U.K. exports helped widen the country's trade gap for June to £10.1 billion, undermining government hopes that exports could soon spark the beginnings of a recovery. "The worsening trade position adds further gloom to Wednesday's downbeat assessment of the U.K. economic outlook from the Bank of England and highlights the extent to which U.K. growth is being hit by the ongoing crisis in the eurozone," said Markit chief economist Chris Williamson.
Europe's spreading woes begin to take toll in German powerhouse
Europe's economic and manufacturing engine in Germany is beginning to sputter as the slowdown through most of the rest of Europe begins to take hold for the world's third-largest exporter. The 1.5% decline in exports for June -- a sign of weakness in the most vital segment of the German economy -- is just the latest in a series of downward-pointing indicators.
Leading indicators for world are broadly negative, OECD says
The Organization for Economic Cooperation and Development forecasts below-trend economic activity for China, India and Russia and, overall, a general slowing worldwide, including the major developed economies. Leading indicators were particularly worrying for the eurozone but also down for the U.S. and Japan, indicating "fading growth momentum."
Market Activities
INTERNATIONAL MARKETS OVERVIEW
U.S. investors are taking a wary approach to stocks after recent gains and with economic indicators giving off different signals, while stronger indications of stimulus emanating from China helped boost shares in Europe for the fifth day in a row. The U.S. S&P 500 Index was basically unchanged with a 0.04% gain, while the FTSEurofirst 300 index closed 0.5% higher. Here is a continuously updated listed of global stock indexes.
Economic Trends & Outlook
India's industrial production drops 1.8% in June; Moody's cuts forecast
As if to confirm the gloomier forecasts for India's economy, industrial production in June declined a sharper-than-expected 1.8%, led by drops in manufacturing and capital goods. Output also was down in the quarter ended in June, by 0.1%. Separately, Moody's projected 5.5% growth for the Indian economy this year, lowering its forecast and joining others with sub-6% estimates.
Outlook is flat for South Korean banks, securities industry
With the growing risk factor of rising insolvencies in South Korea and little prospect of further interest-rate cuts, the outlook is for no improvement in profitability at the country's banks, the Korea Institute of Finance concludes in a report. The securities industry is in a similar situation, chiefly due to eurozone troubles and a slowing U.S. economy, the report says.
Defying predictions of an upward tick, Australia's unemployment rate held steady at 5.2% for July. A robust economy that has largely avoided the downturns seen elsewhere around the world generated 14,000 new jobs in the month, seeming to validate the central bank's decision not to cut interest rates.
Malaysia's industrial output moderates in June
Boosted by a jump in energy exports, Malaysia's industrial production was up 3.7% in June from a year before. As expected, however, the growth rate was down from May's 7.6% figure.
Capital Markets & Financial Products
Asia Alternatives looks for China private equity pools
Renminbi-denominated private equity pools in China are the target for $1.5 billion raised by Asia Alternatives through a new fund of PE funds. "It's the largest pool of capital we've ever raised," said Melissa Ma, managing director. Asia Alternatives looks for buyout, growth, venture capital and special-situations PE funds throughout the region.
Insurers step in as banks pull back
Asian insurance companies seeking high-yield opportunities in noncore investments offloaded by banks might find what they're looking for if they're willing to look offshore. But offshore is the key, as banks in Asia are under less pressure than those in other parts of the world to improve their capital ratios under Basel III.
Ethics & Standards
South Korean authorities to question HSBC, Standard Chartered
HSBC Holdings and Standard Chartered will be the subject of an inspection by South Korea's Financial Supervisory Service in connection with suspicions of money laundering. HSBC's Mexico unit was recently fined $27.5 million for not reporting suspicious drug money. And the New York unit of Standard Chartered is under investigation over allegations of dealings with Iran.
Bank of Tokyo Mitsubishi employee is questioned in Libor probe
An employee of Bank of Tokyo Mitsubishi is being questioned in London in connection with the Libor manipulation scandal.
U.S. trade, jobs figures point up, but wholesale inventories drop
U.S. exports were surprisingly strong in June, with growth of $1.7 billion over May's total helping to cut the country's trade deficit to its narrowest reading in 18 months. Separately, new U.S. claims for unemployment benefits dropped to 361,000 in the latest week, a further sign of a recovering job market. On the downside, wholesale inventories were down in June amid poor sales, indicating that consumer confidence continues to lag.
Central banks in Asia follow others, leave rates steady -- for now
Central banks in Japan, South Korea and Indonesia left their key interest rates unchanged Thursday, in line with their counterparts in the U.S., Europe and Australia. But analysts regard this as more of a wait-and-see situation than a vote of confidence, given the unsteady state of the global economy and the likelihood that monetary easing will soon be needed.
China industrial output, retail sales show weakness
Growth in China's factory output was at a three-year low and retail sales fell short of forecasts in July as effects of the eurozone crisis and other global ills began to take a heavier toll. With stimulus already under way, the fear is that government measures might not be enough to raise growth in the face of worldwide factors.
China, Taiwan sign investor-protection pact
China and Taiwan have signed an agreement designed to protect Taiwanese investors in mainland business ventures. It is seen as a sign of further progress in cross-strait trade relations.
With jobless rate reaching a record, Greece plans more cuts
The Greek bailout may come under additional pressure as the country's unemployment rate soared to a record 23.1% amid government plans for still more public servant layoffs as demanded by lenders. In the past two elections, mainstream parties that favored staying in the euro and vowed more budget cutting suffered major losses of support.
Steep drop in U.K. exports cancels one hope for recovery
A surprisingly sharp 8.4% drop in U.K. exports helped widen the country's trade gap for June to £10.1 billion, undermining government hopes that exports could soon spark the beginnings of a recovery. "The worsening trade position adds further gloom to Wednesday's downbeat assessment of the U.K. economic outlook from the Bank of England and highlights the extent to which U.K. growth is being hit by the ongoing crisis in the eurozone," said Markit chief economist Chris Williamson.
Europe's spreading woes begin to take toll in German powerhouse
Europe's economic and manufacturing engine in Germany is beginning to sputter as the slowdown through most of the rest of Europe begins to take hold for the world's third-largest exporter. The 1.5% decline in exports for June -- a sign of weakness in the most vital segment of the German economy -- is just the latest in a series of downward-pointing indicators.
Leading indicators for world are broadly negative, OECD says
The Organization for Economic Cooperation and Development forecasts below-trend economic activity for China, India and Russia and, overall, a general slowing worldwide, including the major developed economies. Leading indicators were particularly worrying for the eurozone but also down for the U.S. and Japan, indicating "fading growth momentum."
Market Activities
INTERNATIONAL MARKETS OVERVIEW
U.S. investors are taking a wary approach to stocks after recent gains and with economic indicators giving off different signals, while stronger indications of stimulus emanating from China helped boost shares in Europe for the fifth day in a row. The U.S. S&P 500 Index was basically unchanged with a 0.04% gain, while the FTSEurofirst 300 index closed 0.5% higher. Here is a continuously updated listed of global stock indexes.
Economic Trends & Outlook
India's industrial production drops 1.8% in June; Moody's cuts forecast
As if to confirm the gloomier forecasts for India's economy, industrial production in June declined a sharper-than-expected 1.8%, led by drops in manufacturing and capital goods. Output also was down in the quarter ended in June, by 0.1%. Separately, Moody's projected 5.5% growth for the Indian economy this year, lowering its forecast and joining others with sub-6% estimates.
Outlook is flat for South Korean banks, securities industry
With the growing risk factor of rising insolvencies in South Korea and little prospect of further interest-rate cuts, the outlook is for no improvement in profitability at the country's banks, the Korea Institute of Finance concludes in a report. The securities industry is in a similar situation, chiefly due to eurozone troubles and a slowing U.S. economy, the report says.
Defying predictions of an upward tick, Australia's unemployment rate held steady at 5.2% for July. A robust economy that has largely avoided the downturns seen elsewhere around the world generated 14,000 new jobs in the month, seeming to validate the central bank's decision not to cut interest rates.
Malaysia's industrial output moderates in June
Boosted by a jump in energy exports, Malaysia's industrial production was up 3.7% in June from a year before. As expected, however, the growth rate was down from May's 7.6% figure.
Capital Markets & Financial Products
Asia Alternatives looks for China private equity pools
Renminbi-denominated private equity pools in China are the target for $1.5 billion raised by Asia Alternatives through a new fund of PE funds. "It's the largest pool of capital we've ever raised," said Melissa Ma, managing director. Asia Alternatives looks for buyout, growth, venture capital and special-situations PE funds throughout the region.
Insurers step in as banks pull back
Asian insurance companies seeking high-yield opportunities in noncore investments offloaded by banks might find what they're looking for if they're willing to look offshore. But offshore is the key, as banks in Asia are under less pressure than those in other parts of the world to improve their capital ratios under Basel III.
Ethics & Standards
South Korean authorities to question HSBC, Standard Chartered
HSBC Holdings and Standard Chartered will be the subject of an inspection by South Korea's Financial Supervisory Service in connection with suspicions of money laundering. HSBC's Mexico unit was recently fined $27.5 million for not reporting suspicious drug money. And the New York unit of Standard Chartered is under investigation over allegations of dealings with Iran.
Bank of Tokyo Mitsubishi employee is questioned in Libor probe
An employee of Bank of Tokyo Mitsubishi is being questioned in London in connection with the Libor manipulation scandal.
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