Asia

China Manufacturing Ticks Up In April But Still Contracts. China's manufacturing downturn eased slightly in April as declines in new orders and output slowed, a preliminary survey showed on Wednesday, though factory activity showed an overall contraction for the fourth straight month. The HSBC/Markit flash Purchasing Managers Index (PMI) for April rose to 48.3 from March's final reading of 48.0, still below the 50 line separating expansion from contraction. The survey showed contractions in new orders and output moderated somewhat, though new export orders slipped back below the 50 line after a pickup in March, suggesting that the external environment remains difficult for Chinese firms. (Reuters)

S. Korea’s Economy Grows More Than Forecast As Exports Climb. South Korea’s economy expanded at a faster pace than forecast, showing momentum that could boost inflation pressures and build a case for a rate increase. Gross domestic product grew 0.9 % in January-March period from the previous quarter, the Bank of Korea said today in a statement in Seoul, above the median 0.8 % estimate of 13 economists surveyed by Bloomberg News. From a year earlier, GDP increased 3.9 %. (Bloomberg)

Thai Central Bank Refrains From Rate Cut As Unrest Persists. Thailand kept its key interest rate unchanged today, pausing after a cut last month as the central bank assessed the impact of the reduction and a political deadlock on the economy. The Bank of Thailand held its one-day bond repurchase rate at 2 %, with monetary policy committee members voting six-to-one in favor of the decision, it said in Bangkok today. Eighteen of 19 economists in a Bloomberg News survey predicted the outcome, with one expecting a quarter %age point cut. (Bloomberg)

Australia's First Quarter Inflation Surprisingly Soft. Australia's inflation data came in softer than expected in the first quarter, lowering the prospect of a potential rate hike and sending the Aussie dollar tumbling. The consumer price index (CPI) rose 2.9 % in the first quarter from the year-ago period, data showed on Wednesday, lower than the 3.2 % a Reuters poll had forecast. The CPI rose 0.8 % on a month-on-month basis, compared to a Reuters forecast for a 0.6 % rise. (CNBC)

New Zealand Central Bank Hikes Rates, Signals More Tightening. New Zealand's central bank raised interest rates on Thursday and signaled that it would keep tightening monetary policy in the coming months as the central bank tames inflation pressures which have been brewing as the country's economy strengthens. The Reserve Bank of New Zealand lifted its official rate by 25 basis points to 3.0 % in a widely expected move, continuing its tightening path mapped out last month, when the central bank took the lead among developed nations in raising rates in the current cycle. (Reuters)

USA

US Factory Activity Expands In April, Pace Stalls. The U.S. manufacturing sector expanded in April though the rate of growth was slightly lower than expected as inventories fell, but factory output growth hit its fastest pace in three years, an industry report showed on Wednesday. Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index dipped to 55.4 in April from 55.5 in March. Economists polled by Reuters expected a reading of 56.0. A reading above 50 signals expansion in economic activity. (Reuters)

Housing Rebound In U.S. Losing Steam As Prices Rise. The housing recovery in the U.S. is running out of steam as buyers balk at record prices and higher mortgage rates that are making properties less affordable. Sales dropped a surprising 14.5 % to a 384,000annualized pace, lower than any forecast of economists surveyed by Bloomberg and the weakest since July, Commerce Department data showed today in Washington. Three of the four regions saw setbacks, with demand in the West slumping to the lowest level in more than two years. (Bloomberg)

Europe

Euro Factory Surveys Rise As Price Weakness Persists. Euro-area services and manufacturing expanded faster than economists forecast in April, indicating the economy continued to strengthen at the start of the second quarter. A composite index based on a survey of purchasing managers in both industries rose to 54 in April from 53.1 in March, London-based Markit Economics said today. That exceeded the median estimate of 53.0 in a Bloomberg News survey of economists and was the highest reading in almost three years. A reading above 50 indicates expansion. (Bloomberg)

EU In Slow Progress On Deficit Cuts. New figures from the European Commission show that EU governments are gradually making progress with their financial problems. The budget deficit - the amount of new borrowing they undertake - came down last year. For the whole EU, it fell from 3.9% of GDP in 2012 to 3.3%. For the eurozone, the decline was from 3.7% to 3%. But they are still borrowing substantial amounts, so the total accumulated debt continued to rise. That pattern affected both the eurozone and the European Union as a whole. (BBC)

Bank Of England Raises UK Growth Forecast. The Bank of England's Monetary Policy Committee (MPC) has increased its UK economic growth forecast for the first quarter of the year, from 0.9% to 1%. Minutes from the latest MPC meeting showed the revised estimate. There was further good news for the economy from a survey by the CBI, which indicated strong growth in orders for UK manufacturers. The business lobby group said orders had been growing at the fastest pace since 1995. (BBC)

UK Business Confidence Gets Biggest Boost Since 1973. Optimism among U.K. manufacturers rose at its fastest rate since 1973 in the first three months of this year, according to a survey out on Wednesday. The quarterly survey of 405 manufacturers by the CBI (a U.K. business lobbying group) found that over two-fifths of businesses were more optimistic about the business situation than three months ago. Only 8 % were less optimistic. "There are still bumps in the road ahead, with only a tepid recovery likely in the euro zone, the pound creeping higher and a rapidly evolving situation in Ukraine. However, expectations for growth in the coming three months are positive and manufacturers plan to significantly ramp up investment in the year ahead," said Katja Hall, CBI chief policy director, in a news release. (CNBC)

Greek Debt Relief Beckons After 2013 Surplus. Greece had a primary surplus of 0.8 % of GDP last year, the European Commission said on Wednesday, a result that paves the way for some form of debt relief from euro zone governments that are now the main creditors of Athens. Greek public debt rose to 175.1 % of gross domestic product last year, the European Union's statistics office said, up from 157.2 % in 2012. To help bring it down, euro zone finance ministers agreed in November 2012 that they would "consider further measures and assistance, including inter alia lower cofinancing in structural funds and/or further interest rate reduction of the Greek Loan Facility, if necessary, for achieving a further credible and sustainable reduction of Greek debt-to-GDP ratio." (Reuters)

Portugal Sells 750 Million Euros In 10-Year Bonds In First Auction. Portugal auctioned 750 million euros ($1.04 billion) in 10-year bonds on Wednesday at an average yield of 3.58 % in its first auction since April 2011 as a full exit of its bailout program approaches. The country's borrowing costs dipped in the run-up to the auction with the benchmark 10-year bond yields falling to an eight-year low last week. They fell further following the auction, with the 10-year paper yielding 3.636 % on Wednesday. (CNBC)

Ukraine Said To Receive IMF Staff Support For $17 Billion Loan. International Monetary Fund staff endorsed a $17 billion loan to Ukraine to help the government pay its debts amid a projected economic contraction of 5 % this year, according to government officials who have seen the recommendations. The staff’s report was delivered to members of the IMF’s 24-seat board late on April 22, according to the officials, who spoke on condition of anonymity to discuss internal documents. The staff proposed an April 30 board meeting to consider the loan package, they said. (Bloomberg)

Currencies

Dollar rises vs. Aussie, falls against euro. The U.S. dollar rose against the Australian dollar after weaker-than-expected inflation data made investors adjust expectations for an Australian rate hike, while the euro strengthened after positive manufacturing data. The Australian dollar fell to 92.88 U.S. cents from 93.66 U.S. cents late Tuesday. The euro rose to $1.3816 from $1.3805 late Tuesday. In other action, the British pound fell to $1.6782 from $1.6826. The dollar fell to ¥102.53 from ¥102.60 late Tuesday. The New Zealand dollar edged down to 85.80 U.S. cents from 85.99 U.S. cents. The ICE dollar index , a gauge of the dollar’s strength against six rivals, was at 79.869 versus 79.891 late Tuesday. (Market Watch)

Commodities

Oil Futures Slip On Record U.S. Oil Inventories. Crude oil futures slipped on Wednesday after weekly data showed U.S. crude inventories hit a record high, though Brent managed to settle above $109 on support from the ongoing crisis in Ukraine. Brent crude for June delivery settled 16 cents lower at $109.11. U.S. Crude for June delivery settled 31 cents lower at $101.44 a barrel. (Reuters)

Gold Up Slightly, Holding Above Key Support After U.S. Data. Gold prices edged up on Wednesday, holding above a technical stronghold at $1,275 an ounce, though the metal is vulnerable to further losses as investor demand remains slack, analysts said. Spot gold was up 0.1 % at $1,284.50 an ounce by 3:16 p.m. EDT (1916 GMT). Among other precious metals, silver was up 0.3 % at $19.41 an ounce, while platinum rose 0.5% to $1,399.75 an ounce and palladium was up 0.4% at $783 an ounce. (Reuters)