What happened this week 01/07 – 05/07

Thailand

  • Car scheme blamed for slow growth — Narongchai Akrasanee, a member of the BoT’s MPC, estimates the country’s economy will grow by just 4% this year as domestic consumption ebbs. Thais’ ability to spend has been curbed, as many are obliged to service loans for cars bought under the government’s first-time car buyer scheme, he said. (Bangkok Post, 03/07/13)
  • BoT files somber update — Domestic consumption and exports remained weak in May, while the impetus from the government’s first-time car buyer scheme ran out of steam, pointing to a continued lackluster economy in the second quarter, says the Bank of Thailand. Matee Supapongse, the central bank’s senior director for macroeconomic and monetary policy, reiterated it will slash the full-year growth forecast from 5.1% on July 19. Proametee Vimolsiri, deputy secretary-general of the NESDB on Thursday said this year’s GDP will likely grow below 5% in its forecast of 4.2-5.2% while the FPO trimmed its projection to 4.5% from 4.8%. (Bangkok Post, 29/06/13)
  • Inflation falls again — Inflation in June hit a 43-month low as government measures and subsidies held down prices, while fresh food prices returned to normal with better weather. Commerce Ministry figures showed inflation based on l450 consumer items slowed for a sixth straight month in June, with prices rising 2.25% YoY. (Bangkok Post, 02/07/13)
  • Consumer confidence slides — Consumer confidence sagged for the third consecutive month in June as concerns grew over an economic slowdown in the wake of torpid exports and political risks as well as the world’s fragile economy. A survey by the University of the Thai Chamber of Commerce reported the Consumer Confidence Index dropped to 81.6 points from 82.5 in May. A score of less than 100 points indicates pessimism among consumers, while a reading about 00 means they expect conditions will improve. (Bangkok Post, 05/07/13)

Global

  • US: The Purchasing Managers’ Index (PMI) came in better than expected. The index for June registered 50.9, up from May’s reading of 49, the Institute for Supply Management (ISM), a supply management research association, said Monday. Market analysts had expected the index to stand at 50.5. “The ISM index meanders back above the 50-line in June, but remains weak after a brief foray into the low mid-50s in the first quarter. The employment index, meanwhile, is the lowest since September 2009,” FTN Financial Chief Economist Christopher Low commented in a note on Monday. Meanwhile, U.S. construction spending rose 0.5% in May following a revised down 0.1% increase in April, the U.S. Commerce Department reported Monday. (Xinhua, 02/07/13)
  • US: The U.S. private sector added 188,000 jobs in June, according to the ADP National Employment Report released Wednesday. Meanwhile, in the week ending June 29, the advance figure for seasonally adjusted initial claims was 343,000, a decrease of 5, 000 from the previous week’s revised figure of 348,000, the U.S. Labor Department said Wednesday. Economic activity index in the U.S. non-manufacturing sector registered 52.2 in June, lower than the 53.7 in May, the Institute for Supply Management, a supply management research association, reported Wednesday. Besides, U.S. trade deficit in May added 12% to US$45.0bn as imports increased while exports decreased, the U.S. Commerce Department said Wednesday. (Xinhua, 04/07/13)
  • US: U.S. factory orders data beat market consensus by a penny. The factory orders in May rose 2.1%, according to the Commerce Department, slightly higher than analysts’ forecast of 2.0%. Factory orders in April rebounded 1% following a 4.7% decline in March. (Xinhua, 03/07/13)
  • The US ISM New York Index contracted for the first time in a year in June, falling to 47 from 54.4 recorded in May, according to data released by NAPM-New York. (FXstreet.com, 02/07/13)
  • Europe: France is working to generate €14bn (US$18.2bn) in spending cuts next year and in 2015 as it wants to tame the public deficit to 3% of economic output by 2015, Finance Minister Pierre Moscovici said Tuesday. (Xinhua, 02/07/13)
  • Greek gov’t confident of deal with troika auditors for bailout by Monday — The Greek government on Thursday said it will have struck a deal with troika auditors in Athens by Monday on the terms of the release of further bailout aid to the debt-laden country this summer. (Xinhua, 04/07/13)
  • ECB leaves key interest rates unchanged — The European Central Bank (ECB) on Thursday left its key interest rates unchanged at record lows for an extended period and said it could cut them further. The Governing Council expects the key ECB rates to remain at present or lower levels for an extended period of time,” said ECB president Mario Draghi at a news conference here, after the ECB left interest rates at 0.5%. (Xinhua, 04/07/13)
  • Spain raises €4bn at higher costs in bond auction — Spain raised €4bn (US$5.20bn) at higher interest rates in auction of three- and five-year bonds on Thursday. A total of €2.98bn worth of treasury bonds with a five-year lifespan carried an average interest rate of 3.79%. It was the first time the Spanish treasury auctioned these bonds. The remaining €1.02bn worth of bonds with a three-year lifespan fetched an average interest rate of 2.86%, above 2.71% of the previous auction held in June and the highest interest rate for three-year bonds since April. (Xinhua, 04/07/13)
  • Eurozone: Unemployment rate of the euro area rose to 12.1% in May from the revised figure of 12% in April, reaching its highest level since such records began in 1995, the European Union (EU) statistics office said Monday. In May, the EU unemployment rate was 10.9%, the same as the previous month, Eurostat figures showed. (Xinhua, 01/07/13)
  • China: The Chinese government on Monday reported that its manufacturing Purchasing Managers’ Index (PMI) dropped to 50.1 in June from 50.8 in May. While a separate survey from HSBC showed the PMI of China’s manufacturing industry declining to 48.2 in June from 49.2 in May. A reading below 50 indicates a deterioration in activity. (Xinhua, 02/07/13)
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