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December 2012

Prospects Daily: EU approves second phase of Spanish banking bailout, US GDP growth revised up to 3.1% in third quarter, Georgia cuts policy rate

Financial Markets…The European Union on Thursday approved the second phase of the Spanish banking-sector overhaul, signing off recapitalization aid of €1.87 billion ($2.47 billion) for four former saving banks. The country has already received €39.5 billion of recapitalization aid to support four other already-nationalized lenders and to set up a so-called “bad bank”.

Prospects Daily: German business confidence rises, S&P upgrades Greece, Philippines balance of payments surplus grows

Financial Markets…The European stock index (the Stoxx 600) rose 0.6% to its highest level in 19 months following higher-than-expected German business confidence. The euro advanced to an 8-month high against the US dollar in early trading, appreciating to $1.3927. The 17-nation currency also strengthened to the highest level versus the yen since August 2011.

Prospects Daily: Hungary, Turkey, and Sweden cut policy rates, US current account deficit narrows

Financial Markets…Global stocks advanced on Tuesday, with the benchmark MSCI world equity index gaining 0.6%, as growing optimism on U.S. budget talks boosted investor confidence. The MSCI Asia Pacific Index rose 0.5%, heading for the highest closing in nine months, and the Stoxx Europe 600 Index climbed 0.3%, extending its year-to-date gains to 13%. U.S. equities also opened higher in early morning trade with the S&P 500 Index rising 0.2%.

Prospects Weekly: Rising business sentiment in developing countries suggest that the recent uptick in developing country industrial production will continue into Q4

Rising business sentiment in developing countries suggest that the recent uptick in developing country industrial production will continue into Q4, this contrasts with persistently weak sentiment in the Euro Area and Japan (US sentiment rose in November).

Prospects Daily: Euro Area exports fall…Russia’s industrial production growth edges up, Philippines’ remittances growth accelerates

Financial Markets… Net foreign purchases of U.S. financial assets fell to $1.3 billion in October, down from $3.2 billion in September, as investors sharply reduced their holdings of equities and mortgage-backed bonds. China remained the biggest foreign U.S. creditor, increasing its U.S. Treasury holding by $7.9 billion to $1.16 trillion. Japan continued to be the second-largest foreign debt holder, raising its Treasury holding by $5.2 billion to $1.13 trillion.

Prospects Daily: US industrial production rebounds, Flash Markit PMI suggests that Chinese manufacturing activity is expanding at a fastest pace in 14 months

Financial Markets…The euro jumped to an eight-month high versus the yen, appreciating to 109.98 yen in earlier trading, as European leaders pledged on Friday to take further steps to tackle the region’s lingering debt crisis. The 17-nation currency also gained against the dollar, climbing 0.2% to $1.3089 and extending a weekly gain to 1.3%.

Prospects Daily: US unemployment claims fall, Retail sales growth accelerates in Brazil

Financial Markets…U.S. Treasuries declined for a third day, with the 30-year bond yield rising as much as 3 basis points to a five-week high of 2.92%, amid more-than-expected drop in weekly jobless claims and pick-up in November retail sales in the U.S. The Treasury plans to sell $13 billion of government securities today, the last of the three debt auctions this week for a total of $66 billion.

Prospects Daily: Euro Area industrial production falls in October, India’s industrial production accelerates

Financial MarketsGreek 10-year bond yields dropped 42 basis points to 12.79% on Wednesday, after sliding to as low as 12.46%, after the country said it has successfully completed a bond buyback program that started last Monday. According to Greece’s Public Debt Management Agency, investors tendered Greek government bonds with a face value of €31.9 billion, and the weighted-average repurchase price was set at 33.8% of face amount.

Prospects Daily: German investors’ sentiment rises…Turkey’s current account deficit narrows, Tajikistan becomes the 158th member of the WTO

Financial Markets… European stock markets rose for a seven straight day, with the benchmark Stoxx Europe 600 Index advancing 0.3% for its longest streak of gains in 17 months, as German investor confidence jumped to a seven-month high in December. Speculation on further stimulus measures from the Federal Reserve also weighed positively on the region’s shares.

Prospects Daily: Germany’s exports rise…China’s economy continues to rebound on strong domestic demand, Turkey’s growth slows in third quarter

Financial Markets…The euro weakened to a two-week low of $1.29 earlier Monday, and European benchmark stock index (Stoxx Europe 600) fell as much as 0.6%, amid political turbulence in Italy. Italian Prime Minister Mario Monti said on Saturday he intends to resign, sparking concerns over who will navigate the country’s efforts to reduce debt.

Prospects Daily: US consumer confidence falls; inflation moderated in Chile, Peru and Mexico but rose slightly in Brazil

Financial Markets…U.S. Treasuries slid for the first time in four days, with the benchmark note yields 3 basis points to 1.62%, as a government report showed U.S. employers added more than forecasted jobs in November. U.S government bonds have advanced 2.8% this year as of yesterday, after gaining 9.8% in 2011 and 5.9% in 2010.

Prospects Daily: German factory orders rebound, Romania’s GDP contracts in third quarter

Financial Markets…Greece’s sovereign credit ratings was cut to ‘SD’ (selective default) from ‘CCC’ by Standard and Poor’s on Wednesday, after the country began a €10 billion ($13 billion) debt buyback plan on Monday. The rating agency said that Greece’s debt-reduction measures as a precondition for the next tranche of bailout aid from international lenders constitutes a distressed debt restructuring, which in the S&P’s rating criteria means default.

World Bank published latest commodity prices: December 2012

John Baffes's picture

In November 2012, energy and non-energy prices fell by 1.6% and 2.0%, respectively.  Food prices are down by 1.9%, beverages declined by 3.2%, raw materials dropped by 2.2%, metals eased by 1.6% and fertilizers fell by 3.5%. The US dollar appreciated 1.4% against the euro and 0.7% against a broad index of currencies.

Prospects Daily: Brazil's services PMI advances, India allows FDI in retail sector

Financial Markets…Global equities advanced on Wednesday, with the benchmark MSCI All-Country World index gaining 0.2%, driven by Asian shares that climbed to a 16-month high on Chinese optimism after the Communist Party’s new leaders said they would actively promote urbanization. Stock gains were limited due to more-than-estimated drop in euro-zone retail sales in October.

Prospects Weekly: Retail sales growth picked up in Q3 in high income countries, syndicated bank lending to developing countries fell in 2012

After a mid-year slump, retail sales growth picked up in Q3 in high income countries (with the exception of Japan) and retail sales in developing countries sustained their robust growth. Syndicated bank lending to developing countries fell sharply in 2012 due to deleveraging in high-income country banks, tighter regulations and a subdued global economy.

Prospects Daily: Australia and Uganda cut policy rate, Brazil’s industrial production accelerates

Financial Markets… The euro rose to a six-week high against the dollar, appreciating to $1.3077, and Europe’s benchmark stock index (Stoxx Europe 600) gained for a second day, as growing optimism over a successful Greek buyback program boosted investor sentiment. Greece started the €10 billion ($13 billion) repurchase of government bonds maturing between 2023 and 2042 on Monday.

Prospects Daily: Euro Area PMI signals slower pace of decline, US manufacturing index drops 2.2 points, PMIs across the developing countries signal expansion

Financial Markets…Spain has formally requested a €39.5bn bailout for its struggling banking sector pending the approval today at the meeting of Euro-zone finance ministers in Brussels. If approved, aid is to be disbursed by December 12th. Global stock markets were mixed on the positive news on China’s rebound, Spanish bail-out, weak US manufacturing report, and ongoing jitters over the looming "fiscal cliff".