OECD projects slower global recovery amid rising risks The Organization for Economic Cooperation and Development notes growing risks to the global economy and calls for further stimulus to maintain what it forecasts will be a moderate pace of recovery. In its latest Economic Outlook, the OECD notes the slowdown in China and crisis in Ukraine while revising its 2014 global growth forecast to 3.4% from the previous 3.6%. "The extent of the slowdown and the fragility of the banking system in China are uncertain. Risks also remain from the possible interaction of financial vulnerabilities in some EMEs and prospective monetary policy normalisation in the United States," the report says. Market News International (5/6) ECB may need to act as interbank rates rise With interbank rates in Europe beginning to top the European Central Bank's benchmark, the ECB may need to step in to prevent a monetary tightening that could threaten a still-nascent economic recovery. Banks in the region now believe that the ECB may consider ending its absorption of cash from crisis-era bond purchases or undertake other policies that have been on the table since last year. Bloomberg (5/6) U.S. trade gap narrows, but economy may have shrunk, too The U.S. trade deficit for March narrowed 3.6% to $40.4 billion as exports rose. But the gap was greater than the $38.9 billion that the government used as an assumption last week when it issued an advance estimate of annualized first-quarter growth of 0.1%, which means the U.S. economy actually may have shrunk for the first time in three years. "There is a very high chance that GDP will be revised to show a contraction in the first quarter, possibly in the neighborhood of minus 0.5%," said John Ryding, chief economist at RDQ Economics in New York. Reuters (5/6) Markets may get a head start on India election results Exit polls from India's elections that will begin to be reported May 13 may prove to be more decisive for markets than official results due May 16. "Whatever is the result of the exit polls, it will start impacting the markets from May 13 onwards," said Vikas V. Gupta, head of research and product development at ArthVeda. "It is also possible that there is some privately carried-out exit poll information for their private consumption available to some sophisticated investors." The Economic Times (India) (5/6) Report: China's service-jobs growth seen canceling need for stimulus Sustained robust growth in China's jobs market appears to be one big reason that Beijing isn't hurrying to provide stimulus as other signs point to an economy that continues to lose momentum, according to one analysis. And the fast-growing service sector may be the main supporting factor. "GDP growth has halved since peaking above 14 percent in 2007. But, with a greater share of output coming from more labor-intensive sectors, and the economy itself much larger, more new jobs are being created today," wrote economists Julian Evans-Pritchard, Mark Williams and Qinwei Wang at London-based Capital Economics. Bloomberg (5/5)  |
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CFA® members entitled to 20% discount. Register here using promo codes of 'CFA_II' for institutional investors and 'CFA_NII' for non-institutional investors. | | | | |  | CFA Institute Japan Investment Conference | 2 July 2014 Learn insights from Japanese and international institutional investors and strategists at the Japan Investment Conference in Tokyo. Speakers include Richard Koo, Chief Economist of Nomura Research Institute and Prof. Avinash Persaud, Chairman of Intelligence Capital Ltd., etc. Register by 2 June 2014 and save JPY 10,000. | | | | | Singapore, U.S. agree to share tax information Tax-dodging Americans are the target as Singapore and the U.S. have agreed to share tax information under the impetus of a new U.S. law. Foreign firms found not to be in compliance with the U.S. Foreign Account Tax Compliance Act of 2010 will face a 30% withholding tax on their U.S. investment income. The Business Times (Singapore) (5/6) | | Economic Trends & Outlook | India economic adviser projects moderate current-account gap An improving inflation and export picture and lower gold imports should keep India's current-account deficit near 2% in the current fiscal year, said C. Rangarajan, the prime minister's chief economic adviser. In fact, Rangarajan said, restrictions on gold imports may be removed as the investment value and appeal of the precious metal erode. Business Standard (India) (5/5) Citigroup optimistic on India growth While risks remain -- including the possibility of a poor monsoon season -- and recent data are uninspiring, Citigroup is predicting 5.6% growth for India's economy this fiscal year. On the upside, "a decisive election outcome and consequent uptick in consumer and business activity could offset such risks to some extent," the bank said. Business Standard (India)/Press Trust of India (5/5) OECD sees brighter growth outlook for South Korea Global recovery and exports should lift the South Korean economy this year, the Organization for Economic Cooperation and Development said as it raised its Korean growth estimate to 4% from the previous 3.8%. The OECD said the country's sound fiscal situation also provides scope for fiscal and monetary measures as needed to stimulate growth. The Korea Herald (Seoul) (5/6) Australia central bank keeps rates on hold Tamer inflation and a continued boom in the housing market as well as uncertainty over the new government's policy direction were cited as factors as Australia's central bank left interest rates in place for the ninth straight month. "Some indicators of business conditions and confidence have improved from a year ago and exports are rising," said bank Governor Glenn Stevens. "But at the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative." The Australian (tiered subscription model) (5/6) Australia trade surplus narrows but remains strong Australia's trade surplus fell to AU$731 million in March from AU$1.257 billion in February but rounded out three strong months of surplus for the first quarter. "It's a pretty solid start to the year and confirms a solid contribution from net exports to economic growth for the first quarter as well," said David de Garis, senior economist at Australia Bank. The Sydney Morning Herald (Australia) (5/6) | | Capital Markets & Financial Products | U.S. investors skeptical over India elections U.S. investors are holding back amid growing doubt over India's elections, refusing to count on a decisive victory by the favored Bharatiya Janata Party, observers say. "Contrary to the widely held view of bullish foreign investors, we found most investors cautious on trusting opinion polls," Credit Suisse's Neelkanth Mishra said on the basis of his contacts with U.S. investors. "The common refrain was, 'You cannot go to an investment committee with opinion poll results.' " The Economic Times (India) (5/6) | Please contact one of our specialists for advertising opportunities, editorial inquiries, job placements, or any other questions.
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