India's new finance minister is laying out a wide-ranging program designed to revive the country's economy. P. Chidambaram says he will work with the central bank to implement measures that will include an assault on inflation, a possible cut in interest rates, a progressive tax regime and financial consolidation. 

China approves projects at steady pace as inflation moderates

Economists say China's inflation rate may have dropped to 1.7% in July, one factor expected to clear the way for more economic stimulus. Stimulus, however, already appears to be well under way, with authorities approving more than 300 development projects a month since March. 

Bernanke: Fed should take more detailed look at struggling economy

U.S. Federal Reserve Chairman Ben Bernanke indicated that the Fed should take a harder look at microeconomic data when considering the overall health of the U.S. economy. Such data, he said, might reveal that "many individuals and households continue to struggle with difficult economic and financial conditions" despite other metrics that appear more optimistic. One such measure released Monday indicated that U.S. banks are now lending more than at any point since the recession ended in June 2009. 

U.K. manufacturing figures disappoint

Launching what is likely to be a week of gloomy indicators for the British economy, new figures show that the country's small and midsize manufacturers in July had their biggest decline in output since late 2009. The survey by the CBI, a top British business lobbying group, also found that manufacturers expected basically flat demand over the coming three months. 

Market Activities

INTERNATIONAL MARKETS OVERVIEW

Shares in Europe and the U.S. scored gains Monday amid new optimism in resolving the euro crisis and continued buoyancy in the U.S. supported by better employment figures for July. The Stoxx Europe 600 rose 0.5%, and the S&P 500 ended with a 0.2% gain after a late decline tempered a stronger advance earlier in the day. Here is a continuously updated list of global stock indexes. 

Economic Trends & Outlook

South Korean finance ministry sees no urgent need for added budget

Amid calls from the ruling party for a supplementary budget to address what it calls an economic depression, South Korea's Ministry of Strategy and Finance has stated its reservations. "Our stance is that we can consider [such as plan] as an alternative if economic conditions get worse, but we are not yet in that situation," a senior official said. The Saenuri Party has said as much as 6 trillion won could be allocated in a supplementary budget. 

Bank of Korea is expected to cut rates again

HSBC predicts another interest rate cut by the Bank of Korea this week. The expected quarter-point reduction would follow a cut last month that caught many by surprise.

Domestic demand boosts Indonesia's 2nd-quarter growth

Indonesia's economy picked up steam in the second quarter, growing at a 6.4% pace, up from 6.3% in the first quarter. The Central Statistics Agency attributed the gain to strong domestic demand that more than balanced lower demand from overseas. 

Singapore economy shows some growth, but outlook remains cloudy

Although it now appears Singapore's economy grew rather than shrank during the second quarter, the outlook remains dim, given a still-uncertain global economy. The dull outlook has caused many analysts to dial down their growth forecasts for the city-state in 2012 and 2013. 

Taiwan sees a one-month jump in inflation

Taiwan's inflation rate jumped to 2.46% last month from 1.77% in June, a gain attributed mainly to volatile food costs but also to the recent surge in global oil prices. The core consumer price index, however, appears to be holding steady for the time being. 

Ad survey shows Australia's job market continues to weaken

As if to confirm economists' projections of a softer Australian labor market over the remainder of the year, a survey of newspapers' employment ads showed the fourth consecutive month of decline with a 0.8% drop in July. Additional softening might open the way for interest rate cuts by the Reserve Bank of Australia.

Capital Markets & Financial Products

South Korea records a surge in corporate bonds

Corporate bond issuances jumped nearly 11% in July from June after the Bank of Korea's interest rate reduction. "Corporate debt issuances surged for the second month in July due largely to the central bank's key rate cut and businesses' continued efforts to pre-emptively secure sufficient liquidity, revitalizing Korea's corporate debt market," observed the Korea Securities Depository. 

South Korean conglomerates assail proposals to ban cross-shareholding

Proposals to ban cross-shareholding among affiliates have drawn opposition from South Korea's leading conglomerates. Such measures would force companies "to divert money to buy up more stakes that would have been used to hire more workers and make business investments," said Bae Sang-kun, a senior official at the Federation of Korean Industries.

Cut in China trading fees fails to inspire

Another cut in transaction charges by the China Securities Regulatory Commission hasn't inspired much confidence among traders and analysts. For one thing, it's uncertain whether the savings will be passed on to investors. But the step is seen as a further indication of the dwindling importance of regulatory measures in the face of an extended global economic crisis. 

China-Japan tensions grow as economic ties expand

Relations between China and Japan that have alternated over the centuries from brutal invasions to highly lucrative investment have evolved into renewed animosity in Japan as China becomes a major investor. Japanese today acknowledge that closer ties with China can be key to reviving their economy but nonetheless remain wary of Chinese investment coming their way. 

Industry & Regulatory Update

South Korean regulation helped contain loss of foreign capital last year

South Korean measures taken after the 2008 global economic meltdown helped stabilize the foreign currency market during the eurozone debt crisis last year, according to the Korea Development Institute. The cap on forward positions for South Korean branches of foreign banks held down the supply of foreign capital and helped contain its shrinkage to $390 million in the latest crisis, down from a loss of $560 million in 2008. 

New York state may suspend Standard Chartered

Standard Chartered's U.S. unit might face a suspension in New York state over dealings with Iranian entities. It is alleged that the parent bank has done more than $250 billion in business with Iran over the past seven years, in violation of U.S. sanctions.

People & Personalities

Sherry Liu steps down as RBS chief in China

Sherry Liu has resigned as Royal Bank of Scotland's chairman in China. RBS said that Alex Chu, the bank's head of international banking for North Asia, will now oversee the board of RBS China.