CHINA’s economy grew 9.5% in the second quarter, its slowest pace in nearly two years, as government attempts to cool growth appear to be taking effect. But the performance was stronger than many economists had expected and there were few signs that the world’s second-largest economy faces the “hard landing” that some have predicted.
MOODY’S Investors Service yesterday cut Ireland’s credit rating to junk status, saying the country will likely need further official financing before it can return to international capital markets. Ireland, which had a top Aaa rating just over two years ago, suffered after a real-estate boom collapsed, fuelling bank bailouts and a surge in the country’s debt.
THE US TRADE deficit widened in May to the highest level since October 2008, reflecting a surge in the cost of imported crude oil. The gap grew 15% to $50.2 billion, exceeding all forecasts, Commerce Department figures showed yesterday. Exports held near April’s record, thanks to a weaker dollar and strengthening overseas markets.
FEAR that the Eurozone sovereign debt crisis could spread to states such as Italy and Spain sent shockwaves through stock markets yesterday, causing UK and European markets to fall steeply. US markets also suffered due to higher-than-expected import data, although they had been helped when the minutes of the Fed’s June meeting revealed that some officials are ready to provide more stimulus if the US recovery remained sluggish.
ASIAN shares moved higher following steep losses in the previous session, relieved by Chinese economic growth for the second quarter signaling that the world’s second-largest economy is unlikely to come in for a hard landing.
EUROPEAN and UK shares are set to dip slightly today, following hefty falls in the previous three days, as caution over the threat of contagion from the euro zone debt crisis lingered after Moody’s cut Ireland’s credit rating to junk. Falls may be limited by comparison to recent days, helped by gains in Asian stocks and metal prices.
ASIAN currencies strengthened overnight, led by South Korea’s won, on optimism the world’s fastest economic growth and rising interest rates will attract overseas funds.
STERLING clambered back from a 5-month low versus the dollar in volatile trade yesterday, but analysts said the outlook for the pound was weak after UK inflation unexpectedly eased, denting slim rate hike chances.
OIL declined from a three-day high in New York as investors bet that increasing US crude supplies and Europe’s spreading debt crisis signalled demand for raw materials may falter.
GLOBAL oil consumption will average 89.5 million barrels a day in 2012, OPEC’s Vienna-based secretariat said yesterday in its monthly report, giving its first forecast for next year. That’s up 1.5% from the 2011 estimate.
US ETHANOL refiners are consuming more domestic corn than livestock and poultry farmers for the first time, underscoring how a government-supported biofuels industry has contributed to surging grain demand.