Early Headlines: India Growth to Beat China Next Year, Eurozone PMI Softens, China PMI Remains in Contraction, Japan $110 Billion for Asia and More
Early Bird Headlines 22 May 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
- Asia up after Wall Street sets record high, dollar steadies after slip (Reuters) Asian shares rose on Friday after Wall Street set another record high with prospects for a Federal Reserve rate hike in June all but quashed, while the dollar steadied after losing ground to the euro for the first time this week on downbeat U.S. data. Shanghai is at a seven-year high and Japan is close to a 15-year high.
- Future of domestic surveillance powers uncertain as Congress fights (Reuters) The future of the U.S. government's power to spy on Americans' phone calls was up in the air on Thursday as Congress fought over proposed reforms, with no clear outcome in sight. Lawmakers were close to deadlock over the central question of how far citizens' privacy rights should be infringed to protect the country from violent extremists. Experts also disagreed on how counter-terrorism might be affected if lawmakers failed to prevent the June 1 expiration of portions of the USA Patriot Act, which was approved after the Sept. 11, 2001, attacks.
- The biggest ranch in America, larger than the whole of London, has gone on sale for $725m (The Independent) At 510,527 acres, the W T Waggoner Estate Range is the largest continuous ranch in North America and spans six counties in northern Texas. It has been in the same family for 166 years but current heirs cannot agree how it should be run.
- Libor’s Relevance Rising Again When It Comes to Fed Rate Outlook (Bloomberg Business) Just when there seems to be a lot of cold water being thrown on expectations for a Fed rate hike before the end of the year, a jump in LIBOR (London Interbank Offered Rate) is putting a little flame under the cold water. Some are suggesting the LIBOR rate move suggests a September Fed hike.
- Cleanup of oil-fouled California beach could take months (Reuters) Up to 2,500 barrels (105,000 gallons) of crude petroleum, according to latest estimates, gushed onto San Refugio State Beach and into the Pacific about 20 miles (32 km) west of Santa Barbara on Tuesday when an underground pipeline that runs along the coastal highway burst.About 1/5 may have reached the ocean which is at the edge of a national marine sanctuary and state-designated underwater marine life preserve.
- Job creation at four-year high despite slower pace of economic growth (Markit) Markit's Eurozone PMI (Purchasing Managers' Index) registered 53.4 in May, according to the flash reading (preliminary, based on around 85% of usual monthly survey replies), down from 53.9 in April and the recent peak of 54.0 seen back in March. Employment indices continued to move higher, but analysts are seeing signs of softening in the Eurozone economy overall.
- India GDP to surpass China's in 2015-16: UN report (CNBC) A UN report says India's economic growth is projected to surpass that of China's, with the GDP expected to zoom by 7.7 percent in 2016. According to the report India will help accelerate economic growth in South Asia.
- India continues to lead in global confidence index: Nielsen (The Hindu) For the sixth quarter in a row, India continued to lead the global confidence index in anticipation of improvement in the economy through reforms and stimulus announced by the central government, according to Nielsen. In the first quarter of 2015, India's consumer confidence score rose to 130 followed by Indonesia (123) and Philippines (115) for the top rankings globally. See the next article.
- Are investors losing faith in the India story? (Business Standard) The investor class seems to be diverging from the broader population (see previous article). Large broking houses have now openly started questioning the speed of reforms. Jim Rogers was among the first to say that the Modi government has done nothing but talk in the year since it came to power. Marc Faber, editor of investment newsletter The Gloom Boom & Doom Report, says that the BSE Sensex can drop to 24,000 levels. Faber said that he is happy with Prime Minister Narendra Modi's willingness to reform the Indian economy, but "unhappy with the results".
- Statistical Flaws May Inflate China's GDP (Radio Free Asia) As China seeks to rekindle its slower-growing economy, it continues to struggle with shoddy statistical reports.
The National Bureau of Statistics (NBS) has tried for much of the past decade to improve the accuracy of its economic data. But problems persist, even as the official annual growth rate has slipped to its lowest level in 24 years. The latest glitch emerged after the NBS reported power generation numbers for the first quarter, showing rates far below the 7-percent rise in gross domestic product (GDP), the weakest quarterly result since 2009.
- China May flash HSBC factory PMI shrinks for third month, more stimulus seen (Reuters) Chinese factory activity contracted for a third month in May and output shrank at the fastest rate in just over a year, according to the preliminary HSBC PMI survey results., indicating persistent weakness in the world's second-largest economy that requires increased policy support. The Purchasing Managers' Index "flash" reading came in at 49.1 in May, below the 50-point level that separates growth in activity from a contraction on a monthly basis. Economists polled by Reuters had forecast a reading of 49.3, slightly stronger than April's final reading 48.9.
- Positive signs emerge for economy during Q2 (China Daily) We consider this an "official statement" from the government:
Positive signs have started to emerge in China's economy since the second quarter, suggesting deepened industrial restructuring amid rapid growth in the high-tech and Internet industries, according to economists.
The government's reform policies have started to show effects in reshaping the economic engine to depend on consumption and services, rather than the traditional investment-driven model, they said.
The country's GDP growth, which is likely to slip below 7 percent during the April-to-June period, may rebound in the third quarter, according to Wang Jun, a senior economist at the China Center for International Economic Exchanges, a government think tank.
- Japan unveils $110 billion plan to fund Asia infrastructure, eye on AIIB (Reuters) Japan is playing one-upsmanship with China with an Asian infrastructure plan of $110 billion over five years, more than the $100 billion China has pledged to the AIIB (Asia Infrastructure Investment Bank).
- Bank of Japan may upgrade economic view Friday: report (MarketWatch) The Bank of Japan may be set to upgrade its assessment of the economy for the first time in almost two years, a Nikkei news report said late Wednesday. The language appearing in recent central-bank policy statements have described a "moderate recovery trend," and a more bullish description would be in line with the government assessment, which was raised in March for the first time in eight months, the report said. (If we see such a report it will be in What We Read Today later today.)
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