Thursday, March 10, 2011

global Economic outlook for march 10 2011

global Economic outlook for march 10 2011

Dow Jones Industrials -0.01% at 12,213.09
Nikkei 225 -1.46% at 10,434.38
HK Hang Seng -0.82% at 23,614.89

China - Disruption to exports has caused an unexpected US$7.3bn trade deficit, the largest in 7 years. Exports rose an annual 2.4% the lowest figure since 2009 and imports climbed 19.4%. The Chinese New Year and Lunar Holiday is being cited as the major contributing factor.

* China's housing ministry is asking local governments to set price control targets by the end of the month in an effort to rein in rising prices once and for all.

* The people's bank of China has raised the yield on 3 month bills for the second consecutive week fuelling expectations that a rate rise is imminent.

Japan - A downward revision to capital investment and consumer spending has lead to a revision of the country's GDP in Q4. GDP shrank at an annualised 1.3% rather the 1.1% originally estimated. Consumer spending is widely estimated to have turned a corner recently and the general consensus is that with strong machinery order emerging over the last month the economy has turned the corner.

Europe - Further woes for the Eurozone with Spain joining Greece on the downgrade path. Moody's have slashed the Iberian nation's debt to Aa2 citing the eventual cost of restructuring the country's weathered banking system being far more than originally forecast.

* Fears re-emerged for Portugal yesterday after the country was forced to pay a higher premium in a debt auction. Yields on Portugal's 10 year bond had hit highs of 7.78% but were lower at 7.69% after the auction.

Libya - Continued escalation of violence in the west of the country this morning.

Egypt - Violence and religious clashes in Cairo have left 13 people dead and 140 injured as Coptic Christians and Muslims clashed.

Tanzania - A Tanzanian parliamentary panel is recommending reducing power supplies to mines, mainly in the north of the country to help other areas of the economy as power supplies are restricted due to low water levels in hydropower dams. Tanzania's power deficit recently rose to 230MW from 40MW in December

Yemen - As a result of mounting pressure on the regime President Ali Abdullah Salah has announced plans to change the country's constitution in an effort to dispel continued unrest. Two people were killed in clashes yesterday.

Zimbabwe - Government Ministers have announced that Zimbabwe will establish a sovereign wealth fund to own up to 51% of all mining companies operating in the country. The move will effectively nationalise half of the country's key resources. Guidelines will be published Friday.

Ivory Coast - The crisis took another turn yesterday with incumbent President Laurent Gbagbo seizing control of local cocoa and coffee exports and purchases. Presidential rival and internationally recognised winner Alassane Ouattara previously banned shipments of the commodities in an effort to deny Gbagbo funds. Forces loyal to Ouattara have reportedly taken control of several towns in the west of the country in an effort to try and put additional pressure on Gbagbo.

* Randgold Resources have again reiterated that its mine Tongon mine in the Ivory Coast is running normally.

Guinea - The country is revising its mining law for the first time in 16 years with the government reportedly looking into how it can "increase participation" in mined resources according to Mining Weekly. Estimates suggest that the new code could possibly include plans for government stakes up to 33% in some cases.

Currency - The dollar is up this morning on prospects that employment figures released later today will continue to show an improvement in the economy.

US$1.384/eur vs $1.387eur yesterday. Yen82.84/$ vs 82.84/$ SAr6.89$ vs 6.90/$ $1.614GBP vs 1.674/GBP
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