Forex NEWS by RTT in partnership with InstaForex

[IFX Svetlana]

Eurozone December Industrial New Orders Growth Eases

Industrial new orders in the 16-nation currency bloc rose unexpectedly in December, but the pace of growth slowed.

Industrial new orders growth eased to 0.8% in December from 2.7% in November, the European Union statistics agency Eurostat said Wednesday. The monthly growth slowed in December, while the consensus forecast was for a fall of 1%. Excluding orders for ships, railway and aerospace equipment, the index slipped 0.4%.

New orders for capital goods rose sharply by 7% month-on-month and increase in non-durable consumer goods was 0.3%. A 1.5% decrease in durable consumer goods and a 4.1% fall in intermediate goods dragged down the growth.

Annually, orders were up 9.5% in December, reversing November's revised 0.6% fall, which was revised from 0.5%. For the whole year, the new orders index plunged 22.6%.

New orders in EU27 grew 0.6% in December from the prior month, pushing the annual growth to 6.3%. Excluding volatile orders, the index dropped 0.8%. The average new orders index plummeted 21.9% in 2009.

The available information revealed that total manufacturing working on orders improved in ten member states and fell in eleven. The largest increases were registered in France, Lithuania and Latvia. On the other hand, Hungary, Ireland and the Netherlands reported steep declines.

Driven by both domestic and external demand, factory orders in the largest Eurozone economy declined in December. According to data issued by the Federal Ministry of Economics and Technology, German factory orders fell 2.3% on a monthly basis in December after an increase of 2.7% in November.

In the fourth quarter of 2009, the EU16 expanded only 0.1% sequentially with the German GDP remaining flat. Italy's economy contracted 0.2%, while the French economy logged 0.6% growth in the final quarter. Over the whole year 2009, Eurozone shrank 4%.

 

[IFX Svetlana]

Japan Unemployment Rate 4.9% In January

Japan's unemployment rate came in at a seasonally adjusted 4.9 percent in January, the Ministry of Internal Affairs and Communications said on Tuesday, beating expectations for a steady performance after showing 5.1 percent in December.

The number of employed persons in January was 62.13 million, a decrease of 790 thousand or 1.3 percent from the previous year.

The number of unemployed persons in January was 3.23 million, an increase of 460 thousand or 16.6 percent from the previous year.

Commenting on the data at a regularly scheduled press conference, Japanese Finance Minister Naoto Kan said the numbers show that the labor market is "improving somewhat."

The job-to-applicant ratio was unchanged at 0.46, falling shy of expectations for a mark of 0.47.

Also, household spending was weaker than expected in January, adding just 1.7 percent on year versus expectations for a 2.5 percent gain after climbing an annual 2.1 percent in December.

The propensity to consume was up 1.7 points on year to 88.8 percent.

Also on Tuesday, the Bank of Japan said that the monetary base in Japan was up 2.2 percent on year in February to 95.69 trillion yen, after adding an annual 4.9 percent in January.

Banknotes in circulation were up 0.1 percent, while coins in circulation shed 0.7 percent.

The current account balance jumped an annual 15.3 percent to 1.48 trillion yen, including a 15.7 percent surge in reserve balances.

Seasonally adjusted, the monetary base was down 16.8 percent to 94.97 trillion yen.

 

[IFX Darika]

Dollar Mixed As Economic Picture Remains Murky

The dollar briefly touched a fresh 9-month high versus the euro and kept most of its dramatic recent gains against the sterling Tuesday morning in New York, with markets waiting for further clues about the condition of the US economy.

A string of lackluster economic data released over the past few weeks has fueled concerns that the robust growth seen in the fourth quarter of 2009 was a temporary result of massive government spending.

However, the economies in Europe remain even more distressed, making the dollar an attractive alternative to the euro and sterling.

An overnight surge brought the dollar to 1.3434 versus the euro, its highest level since last May. However, the buck quickly turned back to trade at 1.3550.

Tuesday, a flash report from the Eurostat showed that consumer price inflation in the euro area stood at 0.9% in February, down from 1% in January.

The dollar consolidated its gains against the sterling, holding near 1.4950. Yesterday, the dollar skyrocketed to 1.4790 amid concerns about the British economy.

U.K. construction activity contracted in February, a survey conducted by the Markit Economics showed Tuesday. The seasonally adjusted CIPS/Markit Construction Purchasing Managers' Index fell slightly to 48.5 in February from 48.6 in January.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply said, "While the UK economy slowly pulls into recovery mode, the construction sector has now been confined in recession territory for two years and is still very fragile."

Elsewhere, Japanese Finance Minister Naoto Kan said the government will not demand the Bank of Japan to purchase bonds directly from the government.

The dollar saw little movement against the yen, staying near 89 for a fourth day.

Conversely, the dollar remained under heavy pressure against its Canadian counterpart, hitting 7-week low of C$1.0340.

The Bank of Canada will make its interest rate announcement this morning. Economists expect the target for the key overnight rate to remain unchanged at 0.25 per cent.

Individual automakers are scheduled to release their monthly U.S. sales results for February. The data will reveal the unit sales of domestically produced cars and light duty trucks, including sports utility vehicles and mini-vans, during the month.

 

[IFX Svetlana]

China Targeting 8% GDP Growth This Year: PM

China's Prime Minister Wen Jiabao said Friday his country was seeking an 8% annual growth in gross domestic product (GDP), an inflation rate of about 3% and a basically stable Yuan currency for 2010, the year in which China is set to overtake Japan to become the world's second-largest economy.

In his annual "state of the Union" address to the opening session of the National People's Congress (NPC), China's top legislature, he also said that Beijing would maintain an appropriately flexible monetary stance and an active fiscal policy.

Expressing satisfaction over the country escaping, relatively unscathed, from the global financial crisis, Wen warned the nearly 3,000 delegates against complacency, and vowed to reverse the widening income gap between the rich and the poor as the country continued its economic advance.

"We must not interpret the economic turnaround as a fundamental improvement in the economic situation," he said, adding: "There is insufficient internal impetus driving economic growth."

Asserting that China needed to concentrate on restructuring the economy, Wen said: "This is a crucial year for.accelerating the transformation of the pattern of economic development."

After property prices peaked in 21 months in January, he set a target of 7.5 trillion yuan (?750 billion USD 1128 billion) for lending.

However, the premier did not announce any roll-back in the massive 4.0 trillion yuan (?400 billion USD 602 billion) stimulus package that spurred a rebound and helped to ensure the economy grow by 8.7 per cent last year.

The premier unveiled increases of 8.8 per cent on social spending and 12.8 per cent on rural outlays, as he pledged to expand pensions, raise health-and-social-security outlays to avert instability in the economy.

Wen warned of the latent risk in China's banks, and promised to crack down on property-speculation. He also cited excess capacity in manufacturing and weak support for the rural income growth. He urged Chinese firms to improve their ability to innovate and produce high-tech and high-quality products.

In his wide-ranging speech to the rubber-stamp parliament, the premier dwelt on high areas of concern among his 1.3 billion fellow-citizens: soaring house prices, jobs, inflation and corruption. He said: "Everything we do, we do to ensure that the people live a happier life with more dignity."

After the recent ethnic riots in Tibet and the Muslim far western Xinjiang province, the premier lay emphasis on the need to ensure minorities felt a "sense of citizenship", saying: "The Chinese nation's life, strength and hope lie in promoting solidarity, (and) achieving common progress of our ethnic groups."

Wen's speech came a day after Beijing announced an increase of 7.5 per cent in its defense budget for 2010, a reduction of 50 per cent compared to last year's planned growth of 14.9 per cent--the slowest pace of expansion in more than a decade.

Li Zhaoxing, spokesman for the annual session of the National People's Congress (NPC), told a press conference Thursday in Beijing that the planned defense budget was 532.115 billion yuan (about USD 78 billion), an increase of about 37 billion yuan from last year's figure.

This marks the first time that China's defense budget growth rate rose less than 10 per cent after more than 20 years of double-digit increases.

Defense-spending would account for 6.4 per cent of the country's total fiscal expenditure in 2010, the same as last year, he said, adding, as a proportion of the GDP, China was still spending less than many other countries, including the United States.

China's defense expenditure in recent years accounted for about 1.4 per cent of its GDP, he said, noting that ratio was four per cent for the United States, and more than two per cent for the United Kingdom, France and Russia.

Taking into account China's large population, its vast territory, and its long coastline, the country's defense budget was "comparatively low," Li said. But he pointed out that the figures were tentative until the budget plan was approved at the NPC annual session due to open Friday in Beijing.

The spokesman said the increased budget would be mainly used to support military reforms and improve its capability to deal with various security threats and complete diversified tasks. A part of the money would be used to raise the living standards of servicemen, he added.

Li also claimed that China was increasing transparency on its expenditure on defense after Washington repeatedly urged Beijing to be more open about its rapidly-rising military-spending. As a part of this exercise, he said his country was submitting defense budgets to the NPC annual sessions for approval, issuing white papers every two years on its national defense, and establishing a spokesperson system and websites for its Defense Ministry.

Asserting that the only purpose of China's military strength was to safeguard the country's sovereignty and territorial integrity, the NPC spokesman added Beijing had always taken the path of peaceful development in line with its national defense policy.