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February 6, 2013
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  Top Stories 
  • U.S. files massive fraud suit against S&P
    Citing Standard & Poor's incentive to win business from investment banks, the U.S. Justice Department has filed a $5 billion fraud lawsuit against the ratings agency. The allegation is that S&P understated risks associated with mortgage-backed securities, whose collapse eventually led to the global economic meltdown. "Put simply, this alleged conduct is egregious -- and it goes to the very heart of the recent financial crisis," said Attorney General Eric Holder. Reuters (2/5) , Financial Times (tiered subscription model) (2/5) LinkedInFacebookTwitterEmail this Story
  • U.S. service industries extend growth in January
    The outlook for U.S. consumer spending improved as service industries sustained their December pace of expansion in January. The Institute for Supply Management's nonmanufacturing index of 55.2 remained well above the 50 break-even mark and indicates the U.S. is "starting to see more evidence of an improving labor market," said Kevin Cummins, an economist at UBS Securities in Stamford, Conn. "So far, it doesn't seem the consumer has fallen off a cliff" due to a payroll tax increase that took effect last month, Cummins said. Bloomberg (2/5) LinkedInFacebookTwitterEmail this Story
  • Beleaguered Bank of Japan chief offers to leave early
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    Shirakawa/Reuters
    A decisive turn in Bank of Japan policy may come sooner rather than later, with Governor Masaaki Shirakawa offering to leave office three weeks early, in mid-March. Shirakawa has repeatedly been criticized by the government of Prime Minister Shinzo Abe, which says the bank has been too timid in addressing Japan's economic stagnation. Separately, Finance Minister Taro Aso restated the government's determination to act, telling lawmakers that its "top priority is restoring a strong economy by pulling the country out of economic stagnation stemming from the strong yen and deflation." The Wall Street Journal (2/5) , Yomiuri Shimbun (Japan)/Jiji Press (2/5) LinkedInFacebookTwitterEmail this Story

  • U.K. service sector turns positive; eurozone index improves
    A U.K. purchasing managers' index for the service sector swung to a positive reading of 51.5 in January from December. Meanwhile, a similar index for the eurozone improved as well, though it remained in a negative mode with a reading of 48.6, marking a full year of contraction. BBC (2/5) LinkedInFacebookTwitterEmail this Story
  • Retail sales plunge in austerity-hobbled eurozone
    Eurozone retail sales took a dive in December, down on both a month-to-month and year-to-year basis. For the year, sales were off 1.7%, the poorest performance since 2009. With punishing unemployment across the region and austerity-imposed tax bills, "it still seems unrealistic to expect any marked pickup in consumer spending in the near term at least as [households] still face serious headwinds," said Howard Archer, an economist at IHS Global Insight. The Wall Street Journal (2/5) LinkedInFacebookTwitterEmail this Story
  • German machinery orders pick up pace with eurozone boost
    German economic performance continued to outpace that of its eurozone partners in December with a smart 4% rise in orders for machinery and plants. The gain reverses a 3% drop in November, with foreign orders "mainly driven by demand from euro member states," said Ralph Wiechers, chief economist for the VDMA machine-makers' association. Bloomberg Businessweek (2/5) LinkedInFacebookTwitterEmail this Story
  • Tame inflation is seen for China
    Economists predict that China's January inflation rate will come in at a modest 2%, with no likely upward price pressures for the time being. However, the widespread "impression of a Goldilocks economy with inflation under control and solid growth ... is unlikely to last," said Credit Agricole economist Dariusz Kowalczyk. The Business Times (Singapore) (2/5) LinkedInFacebookTwitterEmail this Story

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  Market Activities 
  • INTERNATIONAL MARKETS OVERVIEW
    Corporate news and earnings on both sides of the Atlantic lifted shares Tuesday, with European stocks getting a further boost from a favorable reading on eurozone service-sector activity. The Stoxx Europe 600 rose 0.58% to 285.56, and the S&P 500 gained 1.04% to 1,511.29. Here is a continuously updated list of global stock indexes. The Wall Street Journal (2/6) , Bloomberg (2/5) , CNNMoney (2/5) LinkedInFacebookTwitterEmail this Story
  • Unsteady outlook for Europe unsettles Asian markets
    Investor concern over what appears to be a return of Europe's debt crisis pushed down shares Tuesday across Asia. The Nikkei fell 1.90% to 11,046.92, the Hang Seng plunged 2.27% to 23,148.53, the Kospi lost 0.77% to 1,938.18 and the S&P/ASX fell 0.51% to 4,882.70. Bloomberg (2/5) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 
  • India's service-sector activity picks up
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    Reuters
    Following on a strong January reading for Indian manufacturers, HSBC's purchasing managers' index for India's service sector rose to 57.5 last month from 55.6 in December. "Service-sector activity continued to pick up pace, led by a faster inflow of new business," said Leif Eskesen, HSBC's chief economist for India. The Wall Street Journal (2/5) LinkedInFacebookTwitterEmail this Story

  • Taiwan inflation eases
    Taiwan's inflation rate eased in January to 1.15% from 1.6% in December. The moderation should give the central bank more leeway "to keep monetary policy accommodative," said Ma Tieying, a Singapore-based economist at DBS Group Holdings. However, Taiwan's Directorate-General of Budget, Accounting and Statistics said inflation could pick up in February because of the Lunar New Year holiday. Bloomberg Businessweek (2/4) , The Taipei Times (Taiwan) (2/6) LinkedInFacebookTwitterEmail this Story
  • Australian central bank keeps rates unchanged
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    Reuters
    As expected, Australia's central bank left interest rates unchanged at its first policy meeting of the new year. However, "the inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand," bank Governor Glenn Stevens said in a statement. The Age (Melbourne, Australia) (2/4) LinkedInFacebookTwitterEmail this Story

  • Philippine inflation heats up
    The Philippines' headline inflation rate and core inflation both rose in January, but the headline rate remained well within the central bank's forecast range. Looking ahead, "inflation is likely to drift upwards moderately amid strong economic growth, but there is no urgency to hike policy rates," said DBS Bank economist Eugene Leow. Business World (Philippines) (2/6) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • South Korea now sees net outflow of foreign funds
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    Reuters
    An apparent midmonth switch in sentiment by foreign investors led to a net foreign capital outflow from South Korean stock and bond markets of US$2.5 billion in January, according to data from the Financial Supervisory Service. Early in the month, investors were bullish on prospects for global recovery, but attention later switched to the negative competitive effects of the strong Korean won. MK.co.kr (South Korea) (2/5) LinkedInFacebookTwitterEmail this Story

  • Global investor risk appetite rose in January
    January was a pivotal month for global investor sentiment, switching from an emphasis on safety to a higher tolerance for risk, according to the Institute of International Finance. The IIF noted that equities and higher-yielding corporate bonds were more in demand last month as funds flowed out of U.S. Treasurys and other safe instruments. Xinhuanet.com (China) (2/5) LinkedInFacebookTwitterEmail this Story
  Industry & Regulatory Update 
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