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2013-03-06
Economic Update


On an annual basis, South Africa’s PPI climbed 5.8% in January, compared to an increase of 5.2% recorded in the previous month. On a monthly basis, PPI rose 0.5% in January, compared to a 0.1% drop recorded in December.

On a seasonally adjusted basis, the Purchasing Managers' Index (PMI) for service sector in the UK rose to a reading of 51.80 in February, compared to a reading of 51.50 recorded in the previous month.

The British Retail Consortium has reported that its annual shop price inflation in the UK has risen to 1.1% in February compared to a 0.6% rate recorded in the previous month.

The official reserves in the UK declined $1333.00mn in February, compared to a $565.00mn increase recorded in the previous month.

Markit Economics reported that, final services PMI in Germany rose to a reading of 54.70 in February, above its flash estimate of 54.10, but lower than the January reading of 55.70.

The final services PMI in France rose to a reading of 43.70 in February, compared to its preliminary reading of 42.70. The index showed a reading of 43.60 in January.

Market Economics reported that, the final services PMI in the eurozone rose to a reading of 47.90 in February, above the flash estimate of 47.30. The index stood at a reading of 48.60 in January.

On a monthly basis, retail sales in the eurozone rose 1.2% in January, compared to a 0.8% drop recorded in the previous month.

The Institute for Supply Management reported that non-manufacturing index in the US rose to a reading of 56.00 in February, marking its highest level in a year and compared to reading of 55.20 recorded in January.

The IBD/TIPP economic optimism in the US dropped to a reading of 42.20 in March, compared to a reading of 47.30 recorded in the previous month.

Jeffrey Lacker, the President of the Federal Reserve Bank of Richmond, has indicated that given the massive size of the balance sheet, it would be hard for the central bank to exit from its ultra loose monetary policy when the time comes.

The results of a CBS News poll indicated that a majority of Americans expect to be personally affected by the automatic government spending cuts. The poll showed that 53.0% of Americans expect to be personally affected by the spending cuts, while 39.0% stated that they do not expect to be affected.Moreover,approximately $85.00bn in automatic cuts to both defence and domestic spending went into effect on 1 March 2013, as familiar disagreements over taxes and entitlement reforms prevented lawmakers from reaching a broader budget agreement.

One of the government's nominees for Bank of deputy governor, Kikuo Iwata stated that, although buying foreign bonds remains an option, it should be considered only if all other alternatives fail. He further stated that, longer-term government bonds should be bought to meet its 2.0% inflation target. He added, that the foreign bond purchases remain as a policy option, but it will give an impression that Japan is attempting to weaken the Japanese yen.

On a seasonally adjusted sequential basis, the Gross Domestic Product in Australia has expanded 0.6% in 4Q12, compared to an upwardly revised 0.7% growth rate reported in the earlier quarter.

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