By Becket Adams
January 31, 2012
Here’s what’s important in the financial world this morning:
China: China has been keeping itself busy buying up enormous amounts of gold, according to a recent Forbes report. This month alone, China has “imported 102,779 kilograms of gold from Hong Kong in November, an increase from October’s 86,299 kilograms.”
Given that Beijing does not release gold trade figures, the Hong Kong numbers are the best indicator anyone has to go on. Analysts believe China bought as much as 490 tons of gold in 2011, double the estimated 245 tons in 2010, according to Forbes.
EU: The eurozone finalized its bailout fund on Monday after 25 of 27 EU member states signed off on a €500 billion permanent European Stability Mechanism rescue fund. The U.K. and the Czech Republic did not sign it.
The European Central Bank was pleased by the agreement after expressing its desire for the euro governments to get their finances in order.
“It is the first step towards a fiscal union. It certainly will strengthen confidence in the euro area,” ECB President Mario Draghi said.
Japan: Japan’s industrial production rose higher than expected in December to 4 percent. Continuous gains are unlikely with the declining global demand and a strengthening yen. Other surprising increases included a 0.5 percent rise in household spending and unemployment, which increased to 4.6 percent from November’s 4.5 percent.
Honda’s fiscal quarter three operating profit dropped 65 percent to ¥44.3 billion ($580 million), falling short of ¥81.2 billion expectations. For the year, the company sees its full-year operating profit also dropping 65 percent to ¥200 billion vs. a ¥283 billion estimate. This is the lowest level the company has seen in three years and they attributed it to the natural disasters in Japan and Thailand and the strong yen.