U.S. mortgage applications slumped last week, reflecting lower demand for home loan refinancing as interest rates advanced to their highest since October.

Australia's central bank says the economy is likely to slow, easing inflationary pressures that led to another interest rate increase last week. And, in China, one of the country's largest road and rail contractors has begun Hong Kong's biggest share listing. Claudia Blume in Hong Kong has more on these and other business stories from the region.

A rate increase by Australia's central bank is putting a heavy burden on many of the nation's homeowners. Rates have been increased to more than seven percent, in a move aimed at curbing rising inflation. Phil Mercer reports from Sydney.

The head of the U.S. central bank says the current housing crisis in the United States demands a "vigorous response."

The likelihood of an interest rate rise has sparked fresh political argument about the eventual outcome of the Government's plan to lower inflation.

The Ministry of Finance said on Wednesday that China will issue 28 billion yuan (3.9 billion U.S. dollars) worth of long term book-entry treasury bonds, with a fixed annual interest rate of 4.16 percent.

Applications for home mortgages sank to their lowest level this year, as rising long-term interest rates restrained inducements to refinance, an industry group's data showed on Wednesday.

The dollar rose against the euro and yen before a government report that may show U.S. inflation expedited last month, giving the Federal Reserve less reason to lower interest rates.

The Mortgage Bankers Association's weekly application survey stated that mortgage application volume dropped 22.6 % during the week ending Feb. 15 as most interest rates grew.

Fed Rate Cut By 0.5 Percent: Federal Reserve Announcement Lowers Interest Rate to 3.0 percent hoping to remedy the U.S. Economy, which according to some analyst may already be in full recession.

The U.S. central bank Tuesday begins a key two-day policy meeting that many economists predict will result in another interest rate cut, to help boost the troubled economy and stop a sell-off in global stock markets.

The Federal Open Market committee cut the minimum interest rates that banks can charge one another for making loans by 0.75 percent, driving rates down to 3.5 percent. The emergency rate cut came a week before the next scheduled meeting on January 30th 2008.