2014년 8월 1일 금요일

July 29, 2014

New Sanctions Readied by U.S., EU as Russia Prepares
  • The U.S and European Union may impose tougher sanctions against Russia
    • As Vladmir Putin’s government sought replacements for defense imports and considered restrictions on some agriculture products from America and its allies.
  • The new sanctions are aimed at “key sectors” of Russia’s economy
    • Finance, defense and energy
  • However, Russian government says that sanctions won’t achieve their goal and Russia will become self-sufficient
    • Russia also signaled possible retaliation that it may ban imports of chicken from the U.S and fruit from Europe because of concern about contamination.
    • Russia was the second-largest market after Mexico, for U.S chicken last year. It counts about 7% of U.S poultry exports
  • The U.S is likely to deny Russian access to oil-production equipment that could be used in the Arctic and deep waters, and add more banks and energy companies to the list of those banned from U.S financing
Japan’s Retail Sales Drop in Challenge to Abe Reflation
  • Japan’s retail sales feel more than forecast in June, capping a weak quarter that challenges Abe’s bid to reflate the economy while heaping a heavier tax burden on consumers
    • Sales ▼0.6% YoY; forecast was ▼0.5%
    • In the second quarter, sales ▼7% QoQ
  • Abe is counting on consumers to bear a higher sales
    • The Bank of Japan drives the cost of living upward with record monetary easing
    • The risk is that spending fails to regain vigor, sapping strength from an economy lacking support from exports
  • The effort to recover domestic demand is running up against a failure of companies to pass along record cash holdings in the form of higher wages that could help households cope with rising prices and the heavier tax burden
    • The minimum wage stays the same since May from a year earlier
  • Unemployment ▲ to 3.7% (3.5% previous month)
    • However, labor force ▲by 120,000 people
    • It indicates that the current level of vacancies still points to further declines in the jobless rate in coming months
  • Pending Home Sales Index ▼1.1% (102.7 in June, 103.8 in May)
    • It ▼7.3% YoY (110.8 in 2013 June)
      • However, the index is still above 100 for the second consecutive months
    • The market is stabilizing, but ongoing challenges are impending full sales potential
      • Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved
      • However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates
S. Korea June trade data offers mixed picture on economy
  • The current account registered surplus of $7.92 billion for June 2014(▼ by 12.8%)
    • The goods account surplus narrowed to $6.65 billion from $9.13 previous month
    • The service deficit ▲ to $0.58 billion from $0.34 billion
  • Exports ▼ to $50.28 billion from $52.38 billion (▼4.0%)
  • Imports ▲ to $43.63 billion from $43.25 billion(▲0.9%)
  • The services account deficit ▲$0.58 billion from $0.34 billion
    • The other business services account deficit worsen
  • The financial account recorded net outflow of  $9.84 billion
    • Up from $8.13 billion the previous month
  • Direct investment recorded outflow of $2.06 billion (▼$2.06 billion)
    • ▼ from $3.34 billion, as foreign direct investment shifted to a net inflow
  • Portfolio investment recorded a net outflow of $4.22 billion (▲$4.22 billion)
    • ▲ from $3.31 billion, as inflows of foreign investors’ equity securities ▼
  • Other investment recorded a net inflow of $0.28 billion
    • ▼ sharply from $3.95 billion due mostly to increased lending by domestic financial institutions
  • Reserve assets ▲ by $4.54 billion

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