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October 26, 2012
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  Top Stories 
  • U.S. orders, jobs and home-sales data yield muddy outlook
    NO IMAGE FOUNDFigures for U.S. pending home sales last month and applications for jobless benefits last week pointed to weak growth, while durable-goods orders suggested businesses were becoming more cautious with a slowdown in investment. "The uncertainty and global slowdown are clear negatives for capital spending. The third quarter was soft, and we can't see the fourth quarter being much better," Nigel Gault, chief U.S. economist at IHS Global Insight, said of the goods orders. Minnesota Public Radio/The Associated Press (10/25) , Reuters (10/25) , Bloomberg (10/25) LinkedInFacebookTwitterEmail this Story

  • U.S. Fed to sustain bond buying
    The U.S. Federal Reserve pledged to extend its open-ended bond-buying program at the end of its two-day policy meeting, citing a still delicate recovery. The Fed's closing statement said that "economic growth might not be strong enough to generate sustained improvement in labor market conditions" if the bank were to cease its stimulus. United Press International (10/25) LinkedInFacebookTwitterEmail this Story
  • Headwinds set to smack U.S. consumer economy in 2013
    Even setting aside the so-called fiscal cliff, the consumer-driven U.S. economy is expected to come under considerable pressure in 2013. Ordinary households' tax bills will be rising just as food price increases reach the retail level and health care costs climb, especially early in the year, analysts say. "You could argue that we are still at recession levels on a lot of the consumer indicators. I don't expect the consumer to be a powerhouse," said Jeffrey Cleveland, a senior economist at investments manager Payden & Rygel in Los Angeles. Reuters (10/25) LinkedInFacebookTwitterEmail this Story
  • China leading index suggests further slackening in growth
    Recent signs of stabilizing growth in China's economy are tempered by a Conference Board leading index showing only 0.3% growth between August and September, down from 1.7% a month before. "The near-term outlook continues to be uncertain," said Andrew Polk, a Conference Board economist in Beijing. He said the index's "very modest pickup in September, due in large part to a heavy drag from real estate, points to an economy that is unlikely to pick up rapidly in the near term." Bloomberg (10/25) LinkedInFacebookTwitterEmail this Story
  • U.K. growth of 1% signals no more central bank stimulus for now
    Stronger-than-expected growth of 1% in the U.K. economy in the third quarter means the Bank of England is unlikely to provide any more stimulus in November. The latest reading, however, was boosted by one-time factors, and the longer-term outlook remains uncertain, analysts say. "Even though the gain in GDP in part probably is temporary, we no longer expect" the Monetary Policy Committee to further expand quantitative easing in November, said Citigroup economist Michael Saunders, but "we do expect the MPC will expand QE markedly further over time." Bloomberg Businessweek (10/25) LinkedInFacebookTwitterEmail this Story

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  Market Activities 
    Corporate results helped lift stocks in Europe on Thursday while keeping a lid on U.S. shares, which rose somewhat nonetheless on the strength of encouraging economic data. The Stoxx Europe 600 ended 0.26% higher at 270.23, and the S&P 500 was up 0.30% at 1,412.97. Here is a continuously updated list of global stock indexes. The Wall Street Journal (10/26) , Bloomberg Businessweek (10/25) , CNNMoney (10/25) LinkedInFacebookTwitterEmail this Story
  • China, U.S. data buoy Asian shares
    A favorable reading for China's factory output and another indicator of strength in the U.S. housing market elevated shares across Asia on Thursday. The Nikkei surged 1.13% to 9,055.20, the Hang Seng added 0.21% to 21,810.23, the Kospi was up 0.55% to 1,924.50, and the S&P/ASX edged 0.10% higher to 4,510.50. Bloomberg Businessweek (10/25) LinkedInFacebookTwitterEmail this Story
 Advance your understanding of equity portfolio construction
Don’t miss the Advances in Equity Portfolio Construction Program on 20–21 November in Singapore, hosted with EDHEC-Risk Institute. This two-day seminar offers the technical and conceptual tools to better understand the limits and benefits of different portfolio construction approaches. CFA Institute members receive a 25% discount on registration.

  Economic Trends & Outlook 
  • S&P: Slowing Chinese economy to stress-test banks
    Chinese banks' balance sheets are about to show the effects of a rising number of corporate defaults and narrower net-interest margins as the country's economy slows, warns Standard & Poor's. The ratings agency says more challenging operating conditions over the next few years will test many banks, with smaller ones likely to face consolidation pressures. China Daily (Beijing) (10/25) , Caijing Magazine online (10/25) LinkedInFacebookTwitterEmail this Story
  • Moody's keeps Taiwan credit rating at Aa
    Citing strong amortization of foreign debts and policy control over foreign currencies, Moody's has affirmed Taiwan's credit rating of Aa with a stable outlook. Also noted was the lower ratio of government deficit to gross domestic product, down to 2.2% in 2011 from 4.5% two years earlier. China Economic News Service (Taiwan) (10/25) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • Chinese foreign currency dealings point to strong yuan
    Rising expectations for China's currency led to more selling of foreign currencies than buying through China's banks last month, the government reported. "The surplus suggests Chinese business and individuals have become more willing to hold onto the yuan at a time of rising expectations for a stronger currency," observed Zhao Qingming, a financial expert at the University of International Business and Economics. (China) (10/24) LinkedInFacebookTwitterEmail this Story

  • Taiwan OTC market seeks dual listing of ECBs in Taiwan
    In a move to boost the availability of funds and opportunities for securities firms, Taiwan's over-the-counter market is calling on the Financial Supervisory Commission to authorize simultaneous listing of Eurodollar convertible bonds floated by Taiwanese enterprises abroad in Taiwan for trading and issuance of renminbi-denominated bonds. The dual listing will raise liquidity by opening fund raising in both the primary and secondary markets. China Economic News Service (Taiwan) (10/25) LinkedInFacebookTwitterEmail this Story
  Industry & Regulatory Update 
  • Japan's banks expect to reduce business over U.S. derivatives rules
    Japan's banks apparently will not refuse to register with U.S. regulators in response to new Dodd-Frank rules governing financial derivatives. But, as with other Asian banks, a pullback in trading with U.S. counterparts appears to be in store. "We'll lean towards avoiding transactions with our U.S. partners, at least in the initial phase," the head of derivatives trade at a major Japanese bank said at an industry conference in Tokyo. The Wall Street Journal (10/25) LinkedInFacebookTwitterEmail this Story
  • Asian traders urge India to clamp down on information leakage
    With 92% of Asia Trader Forum members complaining that India hasn't done enough to address the problem of information leakage, a meeting is scheduled for November with the Securities and Exchange Board of India that it is hoped will lead to swift action. "In India, you have this culture that local Indian funds almost feel as though they have the right to obtain trading information of the foreign institutional investors [FIIs] through their brokers. The brokers in turn fear that they would lose business from their domestic clients if they don't disclose what they know about foreign clients' orders," said one head trader based in Hong Kong, describing the problem. (10/25) LinkedInFacebookTwitterEmail this Story

  Ethics & Standards 
  • Rajat Gupta receives 2-year prison term
    Rajat Gupta/Reuters
    Citing "a terrible breach of trust," a U.S. judge sentenced former Goldman Sachs director Rajat Gupta to two years in prison for leaking corporate secrets. Gupta told a hedge fund about plans by Berkshire Hathaway for an investment to support Goldman during the economic meltdown. The Wall Street Journal (10/25) LinkedInFacebookTwitterEmail this Story

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