[B]Chinese Yuan Declines Even As Paulson Meets With Chinese Officials[/B]
Declining against the US dollar in the overnight, the Chinese yuan also fell slightly against the Euro and British pound. Supportive of a move to 7.5745 versus the greenback was sentiment that Paulson?s visit will likely lead to anything but further revaluation efforts in the underlying currency by the Chinese government. Notably, the sentiment stems from statements recently made by China?s Vice Premier Wu Yi. In defense of the pace at which policies have been implemented, Wu noted the growing problem of domestic poverty as the balance to recent developments. With 23 million people below the poverty line, the Vice Premier noted that the nation is essentially “no threat to anyone” even as growth continues to be spurred by a massive influx of investment and surging exports. As a result, with Paulson unlikely to really win any concessions with Chinese officials, sentiment continues to remain up beat that he will return with some positive feedback in stemming further US legislation against the world?s fastest growing economy.
[B]Chinese Stock Markets Close On Fresh High[/B]
Despite recent increases in the reserve requirement by the Chinese government, equity shares continued higher and closed at a fresh high in the overnight session. Supported by bids for commodity stocks, the benchmark Shanghai Composite index ended up 30.26 points to close at 4,471.03. Guangzhou Development Industry Holdings vaulted to the 10 percent daily limit as first half profits skyrocketed higher by 68 percent from a year ago. Laiwu steel also gained, up 3.8 percent, as Chinese demand is expected to continue well into next year. Comparatively, however, banking sector stocks declined as the higher reserve requirement will likely curb lending practices temporarily. In Hong Kong, the benchmark Hang Seng Index rose higher in tandem with the Straits Times Index as HSBC shares announced stronger than expected first half results. Ultimately, Hong Kong stocks closed higher by 445.04 points at 23,184.94 as the Straits Times Index ended up 21.37 points at 3,547.66
[B]Hong Kong Retail Sales Remain Supported[/B]
Retail sales in the Hong Kong economy surged higher than the consensus expectations as stock market gains and rising wages have lifted consumption in the country. For the month of June, the value of retail sales jumped by 14.3 percent versus estimates that pitted a 10 percent gain for the survey. Volume was also higher in the month, jumping 12.8 percent compared to year ago figures. Boosting consumer confidence and spending has been recent gains in stock market holdings as the Hang Seng Index has climbed 16 percent this year. Subsequently, with output rising, employment has also been favorable. According to recent figures, unemployment has dropped to an almost 10-year low of 4.2 percent. Ultimately, today?s report will likely boost sentiment of the overall economy with growth forecasts still expected to show 6 percent by year?s end.
[B]Singapore Unemployment for Q2 At Six-Year Low[/B]
Singapore unemployment rate for the second quarter has fallen to the lowest level in six years. The survey, according to the Ministry of Manpower, reflects expansion in the Asian economy and could signal near term inflationary pressures may be on the rise. Compared to the 2.9 percent witnessed in the first quarter of the year, the unemployment rate declined to 2.4 percent as businesses continued to add to individual labor forces. Incidentally, the ministry also stated that the economy added 61,900 new jobs in the quarter, the highest quarterly rise on record. The news helped to fuel speculation of continued growth in the economy, supporting stronger Sing dollar to the tune of 1.5118, an almost 10-year low.