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 Daily Economic News – April 28, 2014


AUTHORS                Derek Chen (x-81602)                      Eung Ju Kim (x-85804)
                       Gerard Kambou (x-32386)



U.S. government bonds fall for the first time in a week…U.S. pending
home sales rebound after falling for 8 months…Turkey’s consumer
confidence at two-year high

Financial Markets
U.S. Treasuries retreated for the first time in 6 days as upbeat housing data in March and prospect of
further scale-back in Fed’s stimulus damped demand for safe-haven debt. Benchmark 10-year yields
climbed 4 basis points (bps) to 2.70% in morning trade, the first increase in a week, while the 30-year
bond yields rose to 3.48% after reaching a 9-month low of 3.42% last Friday. The current 10-year yield is
more than 100 bps higher from a record low of 1.379% reached in July 2012, but is still standing below its
decade average of 3.45%.

Chinese stocks lost the most in seven weeks amid reports of weak corporate earnings and growing
concerns over the new IPOs. The benchmark Shanghai Composite Index slid for a fourth day, losing
1.6% at the closing, which is the biggest single-day drop since March 10. The Shanghai stock gauge
tumbled 2.9% last week, its biggest weekly slid since the week ending January 10 as manufacturing
gauge pointed to slowing economic growth and concerns grew a new round of IPOs may drain market
liquidity.

High Income Economies
Rebounding from a severe winter, U.S. pending home sales index surged up 3.4% to 97.4 in March after
edging down by 0.5% to a revised 94.2 in February. A pending home sale is one in which a contract was
signed but not yet closed. With the larger-than-expected increase, the index rose for the first time in nine
months, although it was still down by 7.9% (y/y) compared to March 2013.

The composite leading index for Taiwan, China rose 0.22% (m/m) to 104.49 in March, after climbing
0.24% in February. The coincident index also rose modestly by 0.08% from February, while the lagging
index declined at a slower pace of 0.15% in March, after a 0.24% fall in February.

Developing Economies
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Europe and Central Asia
Turkey’s consumer confidence index rose for the second consecutive month to a two-year high 78.5 in
April, up from 72.7 in March, but remained below the score of 100 which indicates a negative outlook.
Contributing to the improvement in the overall index, the general economic situation expectation index,
which pertains to the upcoming 12 months, rose to 107 from 95.9 in March; and the household financial
expectation index, which provides a measure of household financial outlook, rose to 94.9 from 91.9; while
the unemployment expectations index rose to 85.4 from 79.4 in March.

Latin America and the Caribbean
Mexico’s monthly trade balance posted a surplus of US$1.03bn in March, up from US$0.97bn in
February. However, on annual basis, Mexico’s trade surplus narrowed 41.4% in March compare d with the
previous year as imports accelerated. Year-on-year, exports grew 4.5% spurred by non-oil sales, which
increased 6.9% (y/y), while oil shipments fell 11.1% (y/y). Meanwhile imports rose 7.2% (y/y), driven by a
9.1% (y/y) surge in non-oil purchases. In the three months ended in March, exports rose 2.9% (y/y) while
imports increased 3.0% (y/y), resulting in a 16.7% (y/y) increase in the trade deficit.




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