G20 summit begins amid some good news on global economy

The Group of 20 (G20) summit kicked off in London even as recent economic reports suggest that the pace of the global economic slump may be easing. US durable goods orders and home sales rose in February, while March's factory activity revealed some signs of recovery from February despite contracting for the 14th month in a row. Chinese urban investment surged 26.5% in the first two months of the year and UK house prices unexpectedly rose for the first time since October 2007. German investor confidence in March reached its highest level since July 2007. Japan's monetary base logged the fastest rise since 2004, British factory activity contracted at slower pace in March and Australia's February trade surplus soared to A$2.1bn. Even the leading banks, whose deteriorating health has been the root cause of the current global turmoil have seen improvement in business in the first two months.

However, not all's well with the world. Spain mounted its first major bank rescue in 16 years as the state took over Caja Castilla-La Mancha after efforts to choreograph its purchase by a rival lender failed. Spain also became the first euro nation to see consumer prices fall. German retail sales dropped for a 10th month in March. Japan's much-watched survey of business sentiment came in even worse than expected, hitting the lowest result on record. Turkey's economy shrank more than 6% in the fourth quarter, making it more likely that the central bank will have to cut rates further. Euro-zone's February jobless rate rose to 8.5% while in the US a survey by ADP showed the worst-ever monthly loss for private payrolls. Fitch says that Emerging Europe's GDP will contract 3.1% in 2009. Out of the 21 countries covered in the region, GDP will contract in 19 of them, be flat in one and grow in only one.