The following are events and news reported Thursday, 15 July related to the financial crisis and other top news in the global financial system:
* Chinese economic growth slowed in the second quarter, the National Bureau of Statistics said Thursday, as moves by the central government to restrict the flow of credit to local governments and the real estate industry crimped activity. China's GDP grew 10.3% y/y during the second quarter, decelerating from 11.9% growth during the first, the NBS said. The economy expanded by 11.1% y/y in the first half of the year to CNY17.4 trillion, the NBS said, still well above the Chinese government's target of 8% growth for the year.
* The slower expansion of Chinese economy in the second quarter is in line with government wishes and will help prevent economic overheating, Sheng Laiyun, the spokesman for the National Bureau of Statistics, said Thursday. Sheng said the second quarter expansion pace remained in a "normal range" despite the slowdown.
* The Conference Board said its leading index for China rose 0.8% in May to 145.8 after remaining unchanged in April (revised down from +0.3%) and rising 0.7% in March (revised down from 1.1%). The New York-based business association said its coincident index, which measures current activity, rose 0.9% to 184.6 in May after climbing 1.4% in April and 0.5% in March. Four of the five components rose in May.
* A managed, floating yuan exchange rate is in China's long-term interest, a senior People's Bank of China official said in comments published Thursday. Hu Xiaolian's speech was posted in both Chinese and English on the central bank's website nearly a month after the government ended the yuan's de facto peg against the U.S. dollar. Hu outlined the government's commitment to a managed float over the long-term, arguing that the regime is essential for economic rebalancing, improving the efficiency of monetary policy, preventing financial crises and defusing trade tensions.
* The Bank of Japan policy board voted unanimously to leave the target for the overnight lending rate among commercial banks unchanged at 0.1% while revising up its economic growth forecast for the current fiscal year, the central bank announced Thursday. In light of evidence of a continued recovery in Japanese exports and production, the BOJ board upgraded its real gross domestic product median forecast for fiscal 2010 to +2.6% from the +1.8% it projected in its semi-annual Outlook Report issued in April.
* The Eurozone has no choice but for its governments to cut budgets and for the European Central Bank to withdraw its "strongly expansive" monetary policy, ECB Governing Council member Mario Draghi said Thursday.
* Federal Reserve Board Chairman Ben Bernanke will present the Fed's semi-annual report on monetary policy next Wednesday, July 21, before the Senate Banking Committee. A spokesman for the House Financial Services Committee said that he expected Bernanke to appear before the House panel the following day, Thursday, July 22, to give testimony before the House.
* The German Finance Ministry expects to meet the deficit limit of 3% of GDP set under the EU Stability and Growth Pact already by 2012, the Ministry said Thursday. Mainly due to the better federal revenue expectations and the planned budget consolidation measures of the federal government, the Ministry lowered its forecasts for the country's total public deficit. It now predicts a deficit of 4.5% of GDP in 2010, of 4% in 2011, 3% in 2012, 2% in 2013 and 1.5% in 2014.
* RealtyTrac Thursday released its midyear U.S. Foreclosure Market Report, which showed a total of 1,961,894 foreclosure filings reported on 1,654,634 U.S. properties in first 6 months of 2010, -5% vs. the previous six months but +8% in total properties from the first 6 months of 2009. Foreclosure filings in June -3% from May, and down nearly 7% from June'09. June was the 16th straight month where the total number of properties with foreclosure filings exceeded 300k. Foreclosures filings down nearly 4% in Q2. Bank repossessions +5% from the previous quarter and +38% from Q2 2009 to 269,962 -- a new quarterly high for the report.
* UK householders injected a net total of stg3.204 billion into home equity during the first quarter of 2010, data from the Bank of England showed Thursday. This marks the eighth consecutive quarterly net injection of equity, although the total was slightly smaller than the fourth quarter of 2009.
* In its monthly Oil Market Report released Thursday, OPEC predicted world oil demand to grow 1.0 million b/d to 86.4 million b/d in 2011. Demand growth will come primarily from non-OECD, mainly China, India, the Middle East and Latin America. On the product side, demand for industrial fuels will be strong as a result of the ongoing economic recovery. The current economic situation in most developed countries remains sluggish, OPEC said, with the economic recovery is not only slow, but also facing considerable uncertainty. In 2010, given the slow world economic recovery, world oil demand growth is forecast at 0.9 mb/d or 1.1 %.
* It is a safe bet that the Federal Reserve's next move on interest rates will be a rise, but now is not the time for it, Federal Reserve Bank of Richmond President Jeffrey Lacker said in an interview published Thursday. Despite current weak data, the Fed is nowhere near wanting or needing to make additional asset purchases, Lacker told the Financial Times.
* Bank of England Monetary Policy Committee Member David Miles said Thursday that the time is not yet right to tighten monetary policy as economic conditions in the UK are not yet 'normal'. Miles said he does not believe that the current above-target inflation rate is sustainable, given that underlying inflation pressures are not strong. Miles went on to say that above target inflation would be unsustainable without a pickup in wages, which he regarded as unlikely.
* Bank of Japan Governor Masaaki Shirakawa said on Thursday that both upside and downside risks to Japanese economic growth have increased slightly since April, when the BOJ's board presented its medium-term projections in the semi-annual Outlook Report.
* The long-term gains of consolidating public finances outweigh the short-term pain, the European Central Bank said in its Monthly Bulletin on Thursday. The central bank also said that studies suggested that early adjustments should be more effective and less painful. The central bank also said a timely dismantling of employment-protection programs established during the crisis is necessary to allow labor markets and economies to undergo necessary restructuring.
