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The Overnight Express: North American Edition

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Chinese Authorities Say Economy Grew Over 7% in the First 9 Months of 2009

Mon, Oct 19 2009, 11:39 GMT
by Erik Franco

The Overnight Express

The following is a summary of the main economic events from the Asia-Pacific and European sessions:

• NDRC’s Xiong Bilin says Chinese economy is likely to have grown over 7% during the first three quarters of 2009; says the country will easily reach its 8% growth target for the year.

• Barrons says the U.S. economy is strong enough to withstand 2.0% interest rates; says the Fed should hike.

• Fed Chairman Bernanke avoids monetary policy and the economy in his opening remarks at a San Francisco conference on Sunday; all eyes and ears are on his speech to the same conference, at 11:00 a.m. EDT on Monday.

• FT: A law that foreign governments cannot hold stakes in domestic banks goes to the Mexican Supreme Court; the case could force Citigroup and other U.S. financials to liquidate their investments in the country.

• Sunday Times interview: BOE’s Posen says he favours an extension of the central bank’s asset purchase program; says the recession may be bottoming out, but the financial recovery is “not there yet”; adds that the central bank is “not worried about over-shooting its inflation target” at present.

• UK Rightmove house prices rise 0.2% year-over-year in October, their first annualized increase since June of 2008 and following a 1.5% decline the month prior; monthly house prices are up 2.8% compared to the 0.6% growth rate in September.

• UK FSA unveils new mortgage lending rules designed to guard borrowers from high-risk borrowing.

• ECB’s Bini Smaghi tells audience in Florence, Italy, that the financial sector cannot depend “indefinitely” on the extraordinary measures deployed by central banks; says, “An exit strategy will inevitably be put in place in due course”; adds that lending to non-financials will likely continue decreasing this year and only increase again in 2010.

• BOJ Governor Shirakawa tells audience in Tokyo that the Japanese and global economies are showing signs of improvement, but that downside risks remain; sees improvements in debt markets, although domestic demand will likely remain weak.

• The minutes of the BOJ’s September meeting suggest members saw a waning need for the central bank’s credit facilities; says prospects of economic recovery remain “highly uncertain”.

• Japan’s tertiary index increases 0.3% month-over-month in August, better than the 0.1% gain expected.

• Japanese nationwide department store sales fall an annual 7.8% in September; faster than August’s 8.8% contraction; Tokyo sales down 10.5% after a 10.3% drop previously.

• Asahi TV interview: Japanese public finances minister Sengoku says the government aims to slash ¥3 trillion ($33 billion) in ministries’ spending next fiscal year; this would leave a total budget of ¥92 trillion, according to Sengoku.

• RBA Assistant Governor Lowe tells audience in Sydney, Australia, says the central bank is undergoing a more normal setting of monetary policy, given the economy’s resilience to the crisis; says higher rates are “entirely appropriate”.

• Crain's Chicago Business: CME has held informal discussions with the CBOE over a possible takeover.

• UK’s Sunday Times newspaper: Barclays will announce record 2009 profits of £10 billion, according to the newspaper, which doesn’t divulge its sources; Barclays refuses to comment.

• Dutch Bank DBS is official declared bankrupt by a court in Amsterdam after government attempt at a deal with a foreign investor falls through.

• WSJ: CIT Group has agreed to sweeten the terms of its bond-restructuring program geared at enticing bondholders to convert $31 billion in bond debt by at least $5.7 billion.

• WSJ: Vivendi is nearing an agreement over what its minority stake in NBC Universal is worth; GE is in talks to sell the firm to Comcast.

• WSJ: GM is looking to finalize the sale of its German Opel operations to Magna International as soon as this week.

• Nikkei: Mitsubishi is about to launch debtor-in possession financing in the U.S. through an American asset management firm; plan will extend between $500 and $700 million.

• DJN: Russian oil firm Lukoil submits enhanced offer for Iraqi West Qurna-1 oil field, one of the country’s largest, and agrees to Baghdad’s production-sharing demands.

Published on  Mon, Oct 19 2009, 11:42 GMT