Monday, June 14, 2010


BLOOMBERG Sydney, 10 June

Asias economies signalled they are best placed to weather Europes debt crisis this week as data from Chinas exports to job growth in South Korea and Australia surpassed analysts forecasts.
Regional stocks rose after a report showed Chinese shipments abroad climbed 48.5 per cent in May from a year earlier, more than the 32 per cent median forecast in a Bloomberg survey, and separate figures showed a jump in property prices. Unemployment rates in South Korea and Australia fell last month, according to government figures, and Japan reported its economy expanded more than previously estimated in the first quarter.
The resilience may amplify American calls for Asian nations to reduce reliance on exports and increase their contribution to a world recovery clouded by Europes fiscal woes. China has so far resisted letting its yuan rise against the dollar, seeking to shield exporters, while Japans central bank has flagged the recovery in refraining from stepping up injections of cash.
These numbers are very positive, said Brian Jackson, aHong Kong-based strategist at Royal Bank of Canada. Asian countries have pretty strong fiscal positions and theyve got growing domestic demand which will help insulate against any shocks out of Europe. Also, the sharp pick-up in Chinas trade surplus will not go unnoticed in Washington, where there will be more pressure on the US administration out of Congress to take a tougher line with China on its currency, Jackson said.
The economic reports helped stoke a surge in stock markets around Asia. The MSCI Asia Pacific Index rose 0.8 per cent to 110.68 as of 1:54 pm in Tokyo, and S&P Index in Sydney advanced 1.1 per cent at 3:40 pm in Sydney. In contrast the Standard & Poors 500 Index lost 0.6 per cent to 1,055.69 as of 4pm in New York yesterday.
Asias growth contrasts with several European nations that may see their gross domestic product shrink, with the risk of a double dip recession, Andrew Burns, lead writer of the World Banks Global Economic Prospects 2010 report, said in atelecast from Washington late June 9. Burns didnt single out European countries by name.
Eastern Europe, Central Asia and Latin America are the developing regions most in danger of an impact from the crisis that started in Greece, he said.
East Asia wouldnt be unscathed by a return to recession in the advanced economies, Burns added.
Japans economy expanded more than previously estimated in the first quarter. PHOTO: BLOOMBERG
Trade deficit in US widened BLOOMBERG Washington, 10 June
The trade deficit widened in April to the highest level in more than a year as agrowing US economy and higher oil prices caused imports to climb faster than exports, economists said before a report today.
The gap increased to $41 billion, the highest level since December 2008, from $40.4 billion in March, according to the median forecast of 75 economists.
The fallout from the European debt crisis may limit trade flows in coming months as the subsequent plunge in oil prices restrains imports. The increase in the value of the dollar since the turmoil began also makes American goods less competitive abroad, raising the risk that the gains in exports, which have helped lift companies like Dow Chemical Co, will cool.
The Commerce Departments trade data is due at 8:30 am in Washington. Economists estimates ranged from deficits of $37.5 billion to $44 billion.

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