Economists see best hope for 2013 in U.S. economy | China slams U.S. over quantitative easing | Schapiro to depart SEC on Dec. 14
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November 27, 2012
CFA Institute: Financial NewsBrief - Aisa Pacific Edition
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White House sounds alarm over "fiscal cliff"
Reuters
Although U.S. consumer confidence is at a post-recession high, it could easily be undermined by failure to reach agreement on the budget and avoid the "fiscal cliff," a White House report warns as lawmakers settle into negotiations on the potential economic disaster. Going over the "cliff," the report says, would cut GDP growth by 1.4 percentage points as well as throw a wet blanket on spending over the crucial holiday season. Los Angeles Times (tiered subscription model) (11/26)
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Economists see best hope for 2013 in U.S. economy
Economists see a brighter 2013 for the U.S. than for other major global economies, if only Washington can solve its debt and deficit problems. The consensus forecast also notes that the U.S. growth estimate for the third quarter is likely to be revised sharply upward, perhaps to 2.8%, although that pace is not believed to be sustainable. Reuters (11/25)
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China slams U.S. over quantitative easing
Describing the U.S. Federal Reserve's quantitative easing as an "irresponsible and beggar-thy-neighbor policy," China says emerging-market currencies are suffering amid high volatility as a result. "The right path to resolve this issue is by enhancing the responsibility of and promoting coordination among the international reserve-currency issuers," Zhu Hong, China's deputy permanent representative to the World Trade Organization, said at a WTO meeting in Geneva. Bloomberg (11/26)
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Schapiro to depart SEC on Dec. 14
After four difficult years of reform, Mary L. Schapiro is stepping down as chairman of the U.S. Securities and Exchange Commission, effective next month. Schapiro, who came to the SEC after stints at the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, is credited with reshaping the agency's top ranks and successfully campaigning for more funding after a series of scandals in which the SEC was accused of slack oversight. The New York Times (tiered subscription model)/DealBook blog (11/26), The Washington Post (tiered subscription model)/Bloomberg (11/26), Financial Times (tiered subscription model) (11/26)
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U.K. turns to Canada for next central bank chief
Carney, King/Reuters
In a surprise move, the current head of Canada's central bank has been selected as the next governor of the Bank of England. Mark Carney, renowned for helping Canada avoid the worst effects of the global financial meltdown, will succeed Mervyn King. Financial Times (tiered subscription model) (11/26), The Wall Street Journal (tiered subscription model) (11/26)
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As eurozone tries to solve Greek crisis, trouble brews in Catalonia
Negotiators once again gathered Monday to try to formulate a solution that would allow the next batch of vital financial aid for Greece to go forward. Elsewhere in the beleaguered eurozone, Spain's Catalonia region set about trying to form a government after voters, as expected, gave a majority to parties that advocate a referendum on separating from Spain. Reuters (11/26), Financial Times (tiered subscription model) (11/26)
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INTERNATIONAL MARKETS OVERVIEW
European investors focused on yet another attempt at clearing the way for more funding for Greece, while U.S. holiday sales and budget worries kept U.S. investors occupied Monday. Shares ended lower on both sides of the Atlantic, with the Stoxx Europe 600 down 0.49% at 272.00 and the S&P 500 finishing 0.20% lower at 1,406.29. Here is a continuously updated list of global stock indexes. The Wall Street Journal (tiered subscription model) (11/27), The Wall Street Journal (tiered subscription model) (11/26), CNNMoney (11/26)
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U.S. holiday sales, lower yen buoy Asian shares
A strong weekend of holiday spending in the U.S. and the prospect of improving Japanese exports on the back of a declining yen helped lift some Asian markets Monday. The Nikkei rose 0.24% to 9,388.94 and the S&P/ASX gained 0.25% to 4,424.20 while the Hang Seng eased 0.24% to 21,861.81 and the Kospi was down 0.15% at 1,908.51. Bloomberg Businessweek (11/26)
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Economic Trends & Outlook
Indian currency dives as economists project slower growth
Reuters
Economists' forecasts of sustained slow growth for the Indian economy cast the nation's currency to a two-month low. Third-quarter figures are due Friday, and economists expect 5.2% annual growth, which would be off the finance minister's prediction last week of 5.5%. Bloomberg Businessweek (11/26)
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South Korean consumer confidence takes a turn for the better
Although South Koreans remain marginally pessimistic, their confidence has improved this month, with an index reading of 99. Indications pointing to stronger industrial output and the lowest unemployment figures since 2008 appear to be lifting spirits. Bloomberg Businessweek (11/25)
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Singapore facing delicate economic balance in 2013
Reuters
Striking a balance between building up the labor market and incomes and keeping inflation in check is the task confronting Singapore policymakers in the months ahead, according to speakers at the 18th Singapore Economic Roundtable. "There is a short-term conflict between the authorities' desire to manage inflation over time and the strategy to encourage tightness in the labor market in order to achieve structurally increased productivity and incomes," said Edward Teather, economist at UBS Investment Research. Separately, the city-state posted a 2.1% decline in October factory output, dragged down by a sharp falloff in the biomedical sector. The Business Times (Singapore) (11/26), The Business Times (Singapore) (11/26)
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Vietnamese growth forecast is lowered again
Although economic performance is expected to improve in 2013, Vietnam is likely to see growth of only 5.2% this year, the government now estimates. Figures have been disappointing through the first 10 months of 2012, and the forecast has been lowered twice from an initial projection of 6.5% GDP growth. Asia News Network (11/26)
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Taiwan growth outlook improves with help from U.S., China
Taiwan's economic growth should manage to stay just above 1% for the year on the strength of recent improvement in exports and investment, according to the Directorate General of Budget, Accounting and Statistics. Recent upturns in the U.S. and Chinese economies are credited for the new forecast of 1.13%, up from the previous 1.05%. China Economic News Service (Taiwan) (11/26)
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Capital Markets & Financial Products
China's PICC launches IPO in Hong Kong
Reuters
People's Insurance Co. of China launched its initial public offering in Hong Kong as it seeks to raise a total of $4 billion. The institutional tranche, launched last Thursday, was reported fully sold. Caijing Magazine online (11/26)
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Moody's says now is the time for financial reform in China
Moody's is ruling out a hard landing for China's economy but says financial reform should be stepped up to ensure projected annual growth of 7.5% through 2014. Reform is needed, Moody's says, to improve efficiency now that a stretch of easy growth is over. China Daily (Beijing) (11/26)
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Korea Exchange sees 20% decline in dollar futures activity
Recession and reduced volatility have led to a 20% falloff in turnover of dollar futures at the Korea Exchange this year, the exchange says. Domestic institutional investors accounted for a smaller share of activity while foreign investors' share was up. MK.co.kr (South Korea) (11/26)
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Regulatory Update
Once again, outsourcing to India is cited in big bank's trading loss
Reuters
For the third time, global bank outsourcing of oversight functions to India is being called into question, this time in a US$2.3 billion loss caused by a rogue trader at UBS. The accusation by British and Swiss regulators follows similar episodes at British banks HSBC and Standard Chartered. The Hindu (India)/Press Trust of India (11/26)
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Credit Suisse makes cuts in Asia as others expand
Credit Suisse will be reducing staff at its Asia AM unit as it combines its funds arm into its private bank. The Asian portion of the move, however, contrasts with actions by other banks, which are expanding their Asian staffing. AsianInvestor.net (11/26)
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