74752

                      DECPG Daily
        Economics and Financial Market Commentary
                     January 8, 2013
           Allen Dennis (84812), Eung Ju Kim (85804), Sanket Mohapatra (37721),
                            Ekaterine T. Vashakmadze (36773)
  You’ll find recent issues of this Daily and lots of other current analysis and hi gh-frequency data at our
                                    website: http://www.worldbank.org/gem

Financial Markets… Ireland auctioned through a syndicate of banks its first bond since
its sovereign bailout in November 2010, selling €2.5 billion of debt maturing in October
2017. The National Treasury Management Agency targeted a transaction size of around
€2 billion, but strong investors’ demand pushed the total order book to €7 billion. The
new issue was sold at a yield of 3.35%, down from 3.45% indicated at its launch.
Syndicated lending volumes in the Asia-Pacific region (excluding Japan) tumbled 17.6%
to $376.4 billion in 2012 from $456.8 billion in 2011 as rising borrowing costs forced
companies to turn to less expensive funding alternatives, such as bonds and bilateral
loans. Meanwhile, bond issuance in Asia outside of Japan surged 46.6% to a record
high of $788 billion in 2012 and the number of transaction jumped 29.2% to 4,907,
according to Bloomberg data.
Gold for February delivery advanced 0.4% to $1,653.30 an ounce in New York trading,
gaining for the first time in four days, as multi-month low prices and speculation of
increased demand from China spurred buying. Gold price tumbled to a four-month low
of $1,626 last Friday.
High-income Economies…Euro Area monthly retail sales rose for the first time in four
months in November, increasing a modest 0.1% (m/m) following a 0.7% drop in
October. However, seasonally adjusted sales declined at a 5.1% annualized pace in the
three months to November, a faster pace than the 3.3% fall recorded in October.
The European Commission’s Economic Sentiment Indicator (ESI) for the Euro Area
rose for the second consecutive month in December, with the index climbing to 87 in
December from 85.7 in November. Economic sentiment in the Euro Area improved
among consumers and across all sectors, except retail trade.
A separate release from Eurostat showed Euro Area unemployment rate edging up to
11.8% in November from 11.7% in October. At 26.6%, Spain had the highest
unemployment rate in the Euro Area; Germany’s unemployment rate was 5.4%; and
France’s stood at 10.5%.
German manufacturing orders declined 1.8% (m/m) in November, partially reversing
October's 3.8% increase in orders. Foreign orders were down 4.1% (m/m), led by a
6.5% drop in orders from countries outside the Eurozone. In contrast, domestic orders
rose 1.3% (m/m) in November, building on to October's 0.2% increase.
Developing Economies…Chile’s inflation slowed to 1.5% (y/y) in December from 2.1%
in November - coming in well below the central bank's 3% annual inflation target.
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Colombia’s inflation slowed to 2.4% (y/y) in December from 2.8% in November and is
well within the annual inflation target of 2-4%.
Industrial production in Turkey increased 11.3% (y/y) in November reversing a 5.7%
(y/y) contraction recorded in October. Manufacturing output grew 13.3% (y/y), while
mining and quarrying output rose 7.5%. On a monthly basis, production grew by 1.5% in
November compared with a 2.6% contraction in October.

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