EU: Merkel says Germany backs Draghi on conditions for ECB help. Chancellor Angela Merkel backed the European Central Bank’s insistence on conditions for helping reduce borrowing costs in indebted countries, saying Germany is “in line” with the ECB’s approach to defending the euro. Merkel, facing European pressure to ease bailout terms and allow shared debt as well as calls by global partners to stop contagion hailed Canada’s budget and debt discipline as a model for the 17-nation euro area. (Bloomberg)

 

UK: Retail sales unexpectedly rise on fuel discounting in July as promotions helped to boost gasoline sales and food sales increased. Sales including auto fuel gained 0.3% from June. Sales in June were revised to a 0.8% gain from 0.1%, which means second-quarter sales fell 0.3%, less than initially estimated. Jobless claims dropped in July and the BOE says cooling inflation may help to bolster demand. (Bloomberg)

 

China: FDI down 3.6% in first 7 months. China's foreign direct investment (FDI) inflows fell 3.6% in the first seven months of the year versus 2011, extending the longest run of falls since the global financial crisis in the latest sign of slowdown in the economy. The Commerce Ministry said China drew USD66.7bn in FDI between Jan and July. July's inflow alone was USD7.6bn, down 8.7% y-o-y. Investment flows into China's lynchpin real estate sector which directly affects around 40 different business sectors in the world's second largest economy fell 9.3% for the first seven months of 2012 versus 2011, but ministry spokesman Shen Danyang sought to downplay the significance. (Reuters)

 

Indonesia: Yudhoyono plans Indonesian spending boost in 2013 to spur growth. Indonesia plans to increase government capital spending by 15% next year as President Susilo Bambang Yudhoyono pledges to boost infrastructure to ensure sustainable growth. Capital spending will rise to IDR193.8tr (USD20bn) in 2013. “We’ll raise capital spending to boost infrastructure in order to support domestic connectivity, energy and food and to support the economy,” the president said, pledging to maintain the fiscal deficit at a “safe level” and reduce debt. (Bloomberg)

 

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