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April 25, 2013
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  Top Stories 
  • Expectations grow that ECB will cut rate to record low
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    Reuters
    Major banks are predicting a rate cut to a record low in the eurozone when the European Central Bank meets next week after a recent run of gloomy economic figures. "The disappointment from the latest data increases further the downside risks to the ECB's baseline scenario and increasingly challenges the pace of the gradual recovery expected," said Nick Matthews, an economist at Nomura in London. Bloomberg (4/24) LinkedInFacebookTwitterEmail this Story

  • German business sentiment sours in April
    German business sentiment has plunged this month in line with other recent indicators that the German economy is slowing. Lagging exports to China and eurozone neighbors and a sluggish private sector were contributing factors cited as the Ifo think tank's widely watched index slid to 104.4 in April from 106.7 in March, below even the most pessimistic forecasts. Reuters (4/24) LinkedInFacebookTwitterEmail this Story
  • U.K. retail sales surprise with negative growth in March
    Thwarting forecasts of strong growth, U.K. retail sales growth fell to a reading of minus 1 in March, in part due to record cold weather. Consumers are lacking the confidence to go out and spend, according to Barry Williams, chief merchandising officer for food at Wal-Mart Stores' Asda unit. Data due today will reveal whether the U.K. has entered a triple-dip recession. Bloomberg Businessweek (4/24) LinkedInFacebookTwitterEmail this Story
  • Chinese provinces post suspiciously high growth figures
    Several Chinese provinces have reported first-quarter growth in double digits, and figures that are generally higher than the 7.7% reported nationally are raising further questions about the veracity of Chinese economic data. Analysts suspect a number of motivations and factors behind the suspect data, including faked exports to claim export tax rebates and the sheer complexity of compiling GDP figures. Caijing Magazine online (4/24) LinkedInFacebookTwitterEmail this Story
  • Japan sees broadly based economic improvement
    The economies of eight of Japan's 11 regions improved in the first quarter, the Finance Ministry reported. Overall, the ministry has raised its assessment and outlook for the nation's economy for the first time in three quarters as the new government's fight against deflation begins to take hold. Xinhuanet.com (China) (4/24) LinkedInFacebookTwitterEmail this Story
  • Plunge in U.S. durable-goods orders highlights weakening economy
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    Reuters
    U.S. durable-goods orders were down 5.7% in March, reversing 4.3% growth in February and adding to accumulating evidence of a slowing economy. March's drop was the steepest in seven months and seen by some as a result of government budget cutbacks. "We have seen a considerable loss of momentum in the economy, and that has been obvious in the round of data we had over the last four weeks or so," said Jacob Oubina, a senior U.S. economist at RBC Capital Markets in New York. Reuters (4/24) LinkedInFacebookTwitterEmail this Story

  • Bottlenecks hold back U.S. housing market that wants to recover
    The housing market that underpins much of the U.S. economy is running into pricing and scarcity problems that are restraining growth even as demand grows. Materials prices are up with producers so far reluctant to step up output for fear that demand may subside, and skilled labor is in short supply. "Higher costs are one reason home construction is not rebounding faster," said Michelle Meyer, senior U.S. economist at Bank of America. Bloomberg (4/24) LinkedInFacebookTwitterEmail this Story
A New Look at Currency Investing
by Momtchil Pojarliev, CFA, and Richard M. Levich
Research Foundation Publications (December 2012)

The authors of this book examine the rationale for investing in currency. They highlight several features of currency returns that make currency an attractive asset class for institutional investors.
  Reader Survey 
  • Poll Results: What austerity measures are likely to be most effective in achieving sovereign financial recovery?
    A combination of tax increases and spending cuts  38.20%
    None, austerity is doing more harm than good  34.83%
    Spending cuts  21.35%
    Tax increases  5.62%
  • Analysis
    Earlier this week, we asked readers, What austerity measures likely will be most effective in achieving sovereign financial recovery? Some 35% responded, "None -- austerity is doing more harm than good." About 65% of respondents believe that austerity is necessary. This view is strongly in accord with the northern European nations -- including Germany, the Netherlands, Finland, and the United Kingdom -- which continue to advocate for austerity in handling Europe's economic and debt woes. However, support for such measures is beginning to attract some notable critics, including European Commission President José Manuel Barroso and more neutral parties, such as the International Monetary Fund and Bill Gross of PIMCO, the world's largest bond fund manager. Gross reminded Europe that to engender economic growth, it needed to spend money. I think all respondents would agree that there are no easy solutions to sovereign financial recovery. -- Jason A. Voss, CFA, Content Director, CFA Institute LinkedInFacebookTwitterEmail this Story
  Market Activities 
  • INTERNATIONAL MARKETS OVERVIEW
    Strong corporate results and rising hopes for stimulus from the European Central Bank lifted shares Wednesday in Europe, with the Stoxx Europe 600 climbing 0.68% to 294.63. In the U.S., however, there was little direction amid mixed earnings reports, with the S&P 500 ending virtually unchanged at 1,578.79. Here is a continuously updated list of global stock indexes. The Wall Street Journal (4/25) , Bloomberg (4/24) , CNNMoney (4/24) LinkedInFacebookTwitterEmail this Story
  • Asian shares surge
    The previous day's strong performance on Wall Street inspired by strong corporate results helped lift stocks across Asia on Wednesday. The Nikkei surged 2.32% to 13,843.46, the Hang Seng rose 1.73% to 22,183.05, the Kospi added 0.87% to 1,935.31 and the S&P/ASX climbed 1.72% to 5,102.40. CNBC (4/23) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 
  • Australian inflation low enough to allow for rate cut
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    Reuters
    Australia's inflation rate of 2.5% in the first quarter leaves scope for the central bank to cut rates, analysts say. The rate is well within the band of 2% to 3% set by the Reserve Bank of Australia and leaves the way open for a cut below the current record low 3% interest rate if the economy slows later in the year after a peak in mining investment. The Sydney Morning Herald (Australia) (4/24) LinkedInFacebookTwitterEmail this Story

  • Analysts see only modest improvement for South Korean economy
    Analysts estimate that South Korea grew a modest 0.6% in the first quarter, an improvement on recent performance but still short of outright recovery. "Growth in the first quarter was slightly better than the last, but there is little difference," said Lee Sang-jae, a Hyundai Securities economist. "Beside the fact that the government boosted its spending, there were no big changes in domestic consumption or exports." China Securities Journal/Reuters (4/24) LinkedInFacebookTwitterEmail this Story
  • Debt-strained South Korean consumers keep spending down
    Worries on several fronts including a high debt burden are restraining consumer spending in South Korea, suggesting little help forthcoming from the domestic economy as Korean exports are challenged by a falling yen. Last year, the nation's ratio of household debt to income jumped to a record 136% as debt levels rose 5.2% amid income growth of only 4.1%, according to data from the Bank of Korea. The Business Times (Singapore) (4/24) , MK.co.kr (South Korea) (4/24) LinkedInFacebookTwitterEmail this Story
  • Taiwan's export orders down 6.6% in March
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    Reuters
    Taiwan's export orders fell 6.6% in March, disappointing analysts who had predicted a 1.9% gain and still forecast modest growth for the year. "The data was weaker than expected and highlights how Taiwan's economic recovery is tracking that of the global economy -- a gradual but bumpy upward trend," Moody's Analytics economist Katrina Ell said in a note. The Taipei Times (Taiwan) (4/25) LinkedInFacebookTwitterEmail this Story

  • Vietnam projects lower inflation for April
    Vietnam's inflation rate is cooling, with the government projecting a 6.61% price increase in April from a year before. In the country's two major urban centers -- Hanoi and Ho Chi Minh City -- the consumer price index is expected to be down slightly from March. Across the country, a forecast 0.02% price rise from March would be the lowest for April in nine years. Xinhuanet.com (China) (4/24) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • In groundbreaking accord, Australian central bank to buy China bonds
    Australia's central bank said it may invest as much as 5% of its foreign currency assets in Chinese government bonds, having concluded a groundbreaking deal for such transactions. The People's Bank of China "has approved an initial investment quota, and we are currently working through the necessary agreements prior to the investment being made," said Reserve Bank of Australia Deputy Governor Philip Lowe. The Wall Street Journal (4/24) LinkedInFacebookTwitterEmail this Story
  • Ping An Bank plans 50 billion yuan in subordinated bonds
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    Reuters
    Ping An Bank has announced plans to bolster its tier-two capital over the next three years with the issue of as much as 50 billion yuan in subordinated bonds. As of the first quarter, the bank's capital adequacy ratio was reported at 10.17% and its core capital adequacy ratio was 8.25%. China Daily (Beijing) (4/24) LinkedInFacebookTwitterEmail this Story

  Industry & Regulatory Update 
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