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Prospects Daily: Greece’s industrial output raises for first time in four years...Russia issues $1.1 billion bonds

Global Macroeconomics Team's picture

Financial Markets… Stock markets fell on Wednesday as worries over Europe’s debt crisis and slowing global growth spurred expectations of lower corporate earnings. The MSCI Asia Pacific Index geared for a one-month low, and the Stoxx Europe 600 Index fell for a third day. U.S. stock index futures also pointed to lower opening.

Russia’s government sold 34.23 billion rubles ($1.1 billion) of 10-year notes, the biggest amount since at least 2003, as the prospect of foreign trading through a single clearing house (Euroclear) cut borrowing costs. The bonds were priced at an average yield of 7.79%, 9 basis points below the 7.88% yield on comparable bonds sold last month.

Korean government bond yields dropped to record lows as investors expect the country’s central bank to cut its policy rate tomorrow for the second time this year to stimulate the economy. The benchmark 3-year bond yield slid 5 basis points to 2.72%, an all-time low. 10-year yields fell 5 bps to 2.91%, also the lowest level on record.

High-income Economies
France’s industrial production rose 1.5% (m/m) in August following a 0.6% increase in July—contrary to that indicated by poor performance in business sentiment surveys—largely due to a nearly 10% surge in auto sector output, and an increase in food oils and beverage production.

industrial output rose 1.7% (m/m) in August following a 0.1% contraction in July. However, statistics offices in both countries warned that factory closures during the summer holiday month could potentially distort the reported data. 
Greece’s industrial output rose 2.5% (y/y) in August, the first positive reading since April 2008, after falling 4.9% (y/y) in July. The rise was led by export-oriented sectors that have benefited from falling labor costs.  

Sweden’s industrial output rebounded by 3.2% (y/y) in August (+0.4% m/m), after contracting 0.9% (y/y) the previous month. Industrial orders from Swedish companies, however, fell an annual 6.5% and decreased a monthly 1.4% in August.
Norway’s consumer price inflation remained steady at 0.5% (y/y) in September from August, but core inflation fell slightly to 1.1% (y/y) from 1.2% in August. Denmark’s inflation rate slowed to 2.5% in September from 2.6% in August.

Estonia's trade deficit eased slightly to 107.7mn euros compared with a deficit of 111.7mn euros in July.
South Korea's seasonally adjusted unemployment rate stayed at 3.1% in September.

Developing Economies
Philippines' exports fell 9% (y/y) in August on weak external demand. Electronics shipments fell 14.9% (y/y), but their 5.4% (m/m) increase from July was nevertheless an encouraging indicating that the export decline may be bottoming out. Exports for the first eight months of 2012 rose 5.4% to $35.28bn, well below the government's 10% annual export growth target.

Romania’s consumer price inflation increased to 5.3% in September on higher food prices, well above the central bank’s 4.2% upper limit of the target range for annual inflation.

Contrary to the global trend in interest rate cuts, the central bank of Serbia raised its key policy rate by another 25 basis points to 10.75% yesterday, the fourth increase this year for a cumulative 100 basis rise. Monetary tightening was implemented to slow down inflation which, at 7.9% (y/y) in August, was above the 5.5% upper limit of the bank´s targeted range.


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