France appears headed for recession, with the central bank projecting a 0.1% contraction in the economy in the third quarter. This would come after a similar pullback in the second quarter. Unemployment is spiking as well, with the labor-intensive auto and construction industries hit especially hard by the eurozone slowdown. 

Import, output figures turn down in Germany

Adding to accumulating signs of a German economic downturn, the government reported the second decline in imports in three months. June figures also showed a 0.9% drop in industrial output. "With the supposedly ultra-competitive German manufacturing sector in recession, the omens for the rest of the eurozone economy are extremely worrying," said Jonathan Loynes, chief European economist at Capital Economics. 

U.K. recovery will take time, Bank of England chief says

The Bank of England says it will take time to right the U.K. economy, given the constraints imposed by government deficit-cutting and the unresolved eurozone crisis. "Our efforts to bring about a rebalancing of the U.K. economy will require patience. The overall outlook for growth is weaker," said the bank's governor, Mervyn King. 

Loan figures likely to show further China credit loosening

In a further indication that Beijing is moving to lift China's lagging economic growth, steady growth in yuan-denominated loans by China's leading banks is seen for July, according to Goldman Sachs Gao Hua Securities. And looking ahead, the Bank of East Asia projects extended credit loosening, with banks likely to continue boosting credit structures in the final months of the year.

Market Activities
INTERNATIONAL MARKETS OVERVIEW

European stocks edged up and U.S. shares were largely unchanged in light trading Wednesday as the wait extended on both sides of the Atlantic for action from central banks. The S&P 500 was 0.04% lower, and the FTSEurofirst 300 closed with a 0.2% gain. Here is a continuously updated list of global stock indexes. 

Economic Trends & Outlook 

Indian growth, manufacturing forecasts are scaled back

An array of factors including political stalemate, weather and global markets were cited as Citigroup and CLSA cut their outlooks for India's growth in gross domestic product to 5.4% and 5.5%, respectively. Meanwhile, a manufacturing industry survey projected lower growth for the current quarter. 

S. Korea tax bill focuses on growth as slow lending points to stagnancy

Boosting the economy without tax increases is the goal, the South Korean government said as worked at formulating its new tax legislation. Meanwhile, new evidence of a lagging economy emerged, with commercial banks reporting slower growth in household loans in July. 

Vietnam sees inflow of ASEAN funds, projects

Encouraged by new openings for economic renewal, countries in the Association of Southeast Asian Nations have raised their foreign direct investment in Vietnam, with more than 2,000 projects funded as of the end of July, according to the Ministry of Planning and Investment. For its part, Vietnam has also invested outside its borders, including 214 projects in Laos and 112 in Cambodia.

Capital Markets & Financial Products
Taiwan, China take steps to further cross-strait investments

Easier rules for mainland investment in Taiwan are in order to help buoy the island nation's economy, the government said in announcing a fourth round of reviews. Meanwhile, China and Taiwan prepared to seal a legal-protection accord that should clear the way for greater investment in both directions. 

Lower turnover damps profit for Hong Kong Exchanges

A quieter market and lower listing fees were cited as Hong Kong Exchanges and Clearing posted a 21% drop in profit for the second quarter. With the prospect of fewer initial public offerings from China, the bourse operator is looking to boost its status by venturing into commodities with its bid for the London Metal Exchange. "Going forward, it will depend on how it integrates the LME and whether the average turnover will improve," said Jonas Kan, head of Hong Kong research at Daiwa Capital Markets. 

Singapore meets projections with 1.7% 1st-half growth rate

Pointing to economic sluggishness in Europe and the U.S., Singapore Prime Minister Lee Hsien Loong said the growth rate of the city-state's gross domestic product came in at 1.7% in the first half, in line with projections. Looking forward, Lee said that to "still be a shining red dot 20 years from now, we must rethink our approaches and reinvent ourselves. We must anticipate changes and prepare for what lies ahead." 

Japan extends overseas financing facility

Japan is extending to March 2013 an emergency yen financing facility that helps companies with overseas mergers and acquisitions and in acquiring natural resources. The low-interest facility from the Japan Bank for International Cooperation was instituted last year as the yen hit a high, making overseas purchases cheaper. 

Samsung Asset Management aims wide in overseas push

South Korea's biggest asset fund, Samsung Asset Management, says it's looking to Australia and Europe and is focusing on sovereign wealth funds in the Middle East in a broad overseas push. This would build on Samsung's current expansion into Japan and other North Asian markets as well as this year's entry into the U.S., where the fund has registered and agents have been hired. 

Immersed in scandal, South Korea revamps rate mechanism

With South Korean banks rapidly losing their reputations amid scandals, including what some have described as the country's counterpart to Libor manipulation, regulators are set to overhaul rate setting.

Shanghai exchange opens up ETF index tracking

In a bid to improve index efficiency and boost growth in the market, the Shanghai Stock Exchange is permitting some exchange-traded funds to track the same index at the same time. The scrapping of the former rule that allowed index exclusivity for ETFs is aimed at driving "healthy competition among FMCs and sustainable growth of the ETF market," said David Xu, managing director of passive investment at HuaAn Fund Management.

China to push for overseas expansion in culture industry

Overseas mergers and acquisitions and investments are the focus for China's Ministry of Finance in its budget for the culture industry. Overseas expansion, driven by state-owned enterprises, is likely to include building distribution networks and setting up affiliated companies.

Industry & Regulatory Update

South Korea plans to raise tax minimum for conglomerates

South Korea's biggest conglomerates will face a higher minimum tax rate under a government proposal designed to augment government revenues and provide fairer overall taxation. Currently, because of numerous tax breaks extended by the government for certain kinds of spending and investment, some corporations are paying less than the minimum.

Ethics & Standards

Bank of England head speaks up for Standard Chartered

Mervyn King, governor of the Bank of England, defended Standard Chartered against New York state regulators' allegations that the bank had hidden $250 billion of dealings with Iran, saying the amount was much smaller. One source said that settling the case could cost the bank as much as $700 million. Meanwhile, it appeared the New York probe may extend to Standard Chartered's outsourcing of key jobs to India.