| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: Jun 10, 2014 - 6:24 AM


Markets: Japan upgrades GDP growth in Q1 2014 as business investment rises
By Finfacts Team
Jun 9, 2014 - 4:13 PM

Email this article
 Printer friendly page
Shinzo Abe, Japan's prime minister (r), with the other G-7 leaders at a summit in Brussels, June 05, 2014

Japan's economy grew an annualised 6.7% in the first quarter of 2014 in real terms, upgraded from preliminary data due mainly to an upward revision to corporate capital investment, the government said Monday.

The January-March expansion in GDP, the total value of goods and services produced at home, corresponded to a 1.6% increase from the previous quarter, the Cabinet Office said.

The government said in the initial report released May 15 that the world's third largest economy grew an annualized 5.9% in the quarter.

Conall Mac Coille, chief economist at Davy commented today: "One year ago, the IMF recommended that UK Chancellor George Osborne should relax the pace of his fiscal consolidation strategy, warning in May 2013 of the UK’s weak growth prospects with risks remaining tilted to the downside. Suffice to say, the 3.1% UK GDP growth in the year to Q1 2014 has shown that the IMF’s predictions were too pessimistic. So this year’s IMF UK Article IV report, released on Friday, struck a very different tone, with few recommendations on fiscal or monetary policy. However, the IMF did warn that action is warranted to address the risks from the UK housing market. Specifically, the IMF recommended that limits on high loan-to-income mortgage lending should be implemented early and gradually.

Indeed, Chancellor George Osborne said on Friday that the Bank of England should use the macro-prudential tools at its disposable if the housing market posed risks to financial stability. So investors will now look to Bank of England’s June 17th Financial Policy Committee to see what action may be taken to cool the UK housing market.

Recent data points have provided a mixed picture of the UK housing market. The Halifax indicated a rise of 3.9% in house prices on the month in May, up 11% on the year. In contrast, mortgage approvals fell to 62,900 in April, down from the 75,800 peak in January. This could indicate that new rules from the Mortgage Market Review (MMR), requiring banks to do stricter affordability tests and implemented in April, are now cooling activity."

Economic View: S&P restores Ireland’s rating to A-; Juliet Tennent of Goodbody comments - - "After the market close on Friday, S&P raised the Irish sovereign one notch from BBB+ to A- and maintained the outlook as positive. The upgrade was driven by improved prospects for Ireland’s domestic economy which saw the agency revise its average real GDP growth prospects for 2014 to 2016 to 2.7% from 2%, with Ireland's ability to attract foreign investment expected to bolster growth. Echoing Moody’s recent upgrade, S&P also noted the positive credit impact of the faster than expected redemption of NAMA bonds, which removes a significant contingent liability from the sovereign.

In maintaining its positive outlook, S&P stated that, (1) additional data confirming that the economic recovery is “well-entrenched”, (2) a narrowing of fiscal deficits to well below 3% of GDP and (3) additional measures by the major banks to address asset quality, could result in a further upgrade.

The move by S&P is in line with our expectations and confirms that the rehabilitation of Ireland’s credit worthiness remains underway. While the market has moved well ahead of the ratings agencies, the continued positive ratings cycle should continue to support a tightening of spreads relative to German bunds.

Banks: S&P upgrade implications for the banking system: Eamonn Hughes and Colm Foley of Goodbody comment - - "On Friday evening, S&P raised its long term sovereign credit rating on Ireland from BBB+ to A-, with the outlook remaining on positive. The upgrade reflected the brightening economic prospects, detailed in the economics piece above. However, S&P indicated that the better macro backdrop should underpin improvements in the financial system as well. S&P noted the return to the debt markets for the Irish banks during 2013, but regarded this return to external funding as still tenuous.

S&P regards NPLs as still very high across the system (35% of loans) and whilst some lenders are reporting declining stocks of NPL’s, S&P regards that this process will be slow. The highest NPLs are in commercial real estate, though S&P notes that these NPLs are well provisioned. However, the main concern for S&P is in the mortgage books where all distressed loans are estimated at c.26.5% by S&P. The agency acknowledges that the banks, prompted by the authorities have developed their loan work-out capabilities and will soon be better placed to address the asset quality of their mortgage books through foreclosure, rescheduling or other remediation. Elsewhere, S&P assesses contingent liabilities from the financial sector as limited given the thoroughness of the restructuring of the system in the last five years.

In its outlook section, S&P expects the banks to take additional resolute steps to address asset quality, including continued provisioning and loan write-offs. Our forecasts incorporate additional loan losses above trend levels at the banks in 2014 and 2015 prior to normalising. Nevertheless, the improving ratings profile should also help lower funding in due course for the financial system."

US Markets

In New York Monday, the Dow rose 28 points or 0.27% to 16,953.

The S&P 500 added 0.14% and the Nasdaq advanced by 0.27%

US benchmark updates

Asia Markets

The MSCI Asia Pacific Index gained 0.2% in Hong Kong Monday after rising 1.2% last week.

Japan's Nikkei 225 rose 0.31%; China's Shanghai Composite slid 0.03%; South Korea's KOSPI fell 0.27% and Australia's S&P/ASX 200 rose 0.50%; and in Mumbai, the Bombay Stock Exchange the S&P BSE India Sensex Index climbed 0.72%.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600  is up 0.21% in mid afternoon trading Monday.

In Dublin, the ISEQ  is up 0.25%.

Aer Lingus is down 2:40% and CRH is up 0.31%.

European Benchmarks

Irish Share Prices

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.3589 and at £0.8095.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time high of 11,771 on May 21, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 3.11%, to 1,619 points, Bloomberg report.

On Friday in London the BDI closed up 12 points or 1.23% to 989. The index is down 56.57% year to date and up 21.80% in 12 month period.

The index rose by 220% in 2013 to 2,237.

Global rebalancing — the tanker scrapyard index?

Crude oil for June 2014 delivery is trading on the Chicago York Mercantile Exchange (CME/Nymex) at $103.88 up $1.22 from Friday's close. In London, Brent for June 2014 delivery is trading on the International Commodities Exchange at $109.87. The North Sea benchmark accounts for two-thirds of the global market.

Finfacts, July, 15, 2013: US West Texas Intermediate oil benchmark jumps in July - - margin between WTI and Brent falls.

Gold spot price

The spot price of an oz of gold is trading on the CME in Chicago at $1,253.50 up $1.40 from Friday's closing - - the gold price fell 28% in 2013, the biggest annual plunge since 1981.

Gold had hit a record high of $1,921.15 a troy ounce on Sept 06, 2011.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

International
Latest Headlines
Wednesday newspaper review: December 17, 2014
Tuesday newspaper review: December 16, 2014
Monday Newspaper Review - Irish Business News and International Stories - - December 08, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 25, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 21, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 20, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 19, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 18, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 17, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 14, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 13, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 12, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 11, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 06, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 04, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 03, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 31, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 30, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 29, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 22, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 21, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 16, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 13, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 09, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 08, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 06, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 02, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 01, 2014
Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014