India's key interest rate was left unchanged by the nation's central bank, which lowered its 2012 growth projection to 6.5% from 7.3% and raised the inflation outlook to 7%. But the bank cut the Statutory Liquidity Ratio, and leading lenders indicated their rates might come down a bit as a result. Meanwhile, India's April-June fiscal deficit was reported at 37.1% of the full fiscal year target; a year before, it was 39.4%. 

Former Indian finance minister returns to post

India's new finance minister is Palaniappan Chidambaram, who moves into the new post from his job as home minister. Chidambaram has been finance minister twice before, including a stint during the 2008 crisis when he earned plaudits for his economic management.

Spain sees rising capital flight

More than 41 billion euros in capital fled Spain in May as the government struggled to back one of the country's biggest banks. From the beginning of the year through May, 163 billion euros left the country, equivalent to 16% of Spanish GDP. Separately, Spanish retail sales for June were reported down 5.2% on a seasonally adjusted basis. 

German retail sales ebb even in robust job, wage environment

Despite strong wage gains and a solid job market, German retail sales were down for a third consecutive month in June, the longest run of declines since 2007. The 0.1% drop from May also came despite preliminary indications of improving consumer sentiment.

German coalition rules out euro-fund access to ECB liquidity

Proposals supported by France and Italy for permanent access by the euro rescue fund to the European Central Bank's liquidity got a cold reception in Germany, meeting outright rejection by the ruling coalition of Chancellor Angela Merkel. Characterizing such a license as a "wealth-destroying weapon," Rainer Bruederle of the Free Democratic Party said that financing debt "by means of the printing press leads to growing inflation dangers."

All eyes are on central banks, but how much more can they do?

Although markets around the world are pinning their hopes on the U.S. Federal Reserve and the European Central Bank to step up in the face of a mounting global crisis, doubts nonetheless abound about their capacity to help. "Central bankers are very conditioned to be confident in the power of monetary policy. But the markets are questioning how many arrows they have left in their quiver," said Benjamin Pace, chief U.S. investment officer for Deutsche Bank Private Wealth Management. 

U.S. home prices, business activity take upward paths

Seasonally adjusted U.S. home prices were up for the fourth consecutive month in May, and an index of business activity for July was positive as well, with both measures suggesting bright spots in the U.S. economy. On the fiscal side, however, the Treasury Department said the government expects to borrow $592 billion for the second half of the year in the midst of only modest economic growth.

Market Activities
INTERNATIONAL MARKETS OVERVIEW

Poorer-than-expected results from UBS and BP weighed on European stocks Tuesday, as did new indications that Germany might thwart action by the European Central Bank to address the euro crisis. The Stoxx Europe 600 index ended down 1%. On Wall Street, the S&P 500 Index edged 0.43% lower as investors awaited some indication from the U.S. Federal Reserve. Here is a continuously updated list of global stock indexes. 

Economic Trends & Outlook
Japan posts better jobs numbers, but outlook remains clouded

Despite lagging exports and a buoyant yen, Japan's unemployment rate declined in July to 4.3%, down one notch from June's 4.4%. Gains, however, were concentrated in the service sector while manufacturing employment was down, portending uncertainty in coming months as the euro crisis plays out. 

Taiwan, South Korea indicators all point downward

Taiwan's gross domestic product edged back 0.16% in the second quarter as the country's consumer confidence index fell in June. Meanwhile, South Korea reported a decline in output. In combination with an earlier reported slide in Japanese manufacturing, the indicators all pointed to a need for further stimulus across Asia. 

With local lending mandate and rail push, China looks to lift economy

Chinese private banks have been ordered to step up lending to local governments, apparently part of Chinese leaders' broader plan to stimulate the economy. The push comes as the Ministry of Railways boosts investment 16% in another sector of the country's infrastructure. Separately, foreign exchange regulators said China's capital and financial account pivoted to a deficit of $71.4 billion in the second quarter from a surplus in the preceding period.

Thailand exports decline 2% in first half

Thailand's exports were off 2.0% for the first half of the year, contributing to a slower Thai economy in June. Lingering problems in the eurozone contributed to the lower figures, and the Finance Ministry said it would dial back its export target in September as a result.

Thailand moves aggressively to seize business opportunities in region

Thailand is looking to bounce back strongly from the 2008 global financial meltdown and the country's devastating floods last year as its businesses seek out developing consumer markets in neighboring countries. The drive has included more than $20 billion of investment in the region, taking advantage of buying opportunities generated by the crisis. For all that, Thailand faces stiff competition and hurdles, including "the challenge ... to move up the value chain and not get stuck on low-value-added jobs," says Hozefa Topiwalla, head of research for Southeast Asia at Morgan Stanley in Singapore.

Capital Markets & Financial Products
Shaky markets are cited as 2 Asia-focused funds close

Volatile markets and wary investors are being cited as Lazard closes its South Korean-focused activist hedge fund and China International Capital Corp. pulls the curtain on its Asian long/short equity fund. The Lazard fund made its debut in 2006 and invested in small to midsize South Korean businesses with a nod to social responsibility. 

China central bank's reverse repo raises speculation on reserves cut

Raising speculation that a cut in the reserve requirement ratios for banks may be in store, China's central bank Tuesday injected 8 billion yuan into the market in a seven-day reverse repo. "Liquidity conditions at the end of July are apparently better than those in end-June. ... In the light of the current situation, the size of central bank's [potential] reverse repos would directly determine liquidity conditions in financial institutions," a trader with a state-owned commercial bank was quoted as saying. 

Malaysia launches Kuala Lumpur financial site

A major financial hub "that can grow both Islamic and conventional finance" was the hope as Malaysian Prime Minister Najib Razak opened a 70-acre financial district in Kuala Lumpur. The government expects 250 global companies to locate at the Tun Razak Exchange site. 

4 firms launch fund for Philippine infrastructure

Four investment firms are launching a $625 million fund targeted for infrastructure deals in the Philippines. "We aim to finance five to 10 investments with approximately $50 million to $125 million for each project. The fund should be fully deployed within the next three years and, given the robust pipeline in the Philippines, we are confident we can deploy it well," said Frank Kwok, senior managing director of Macquarie Infrastructure and Real Assets Asia, the fund manager.

Ethics & Standards
Guilty plea is entered in insider trading case against ex-Hanlong exec

A former vice president for Hanlong Mining has pleaded guilty to serial insider trading that dates from 2006. Calvin Bo Shi Zhu's plea comes with a decision pending from China's National Development and Reform Commission on Hanlong's proposed takeover of Australian miner Sundance Resources.