Daily Review – Friday 04-Nov-2016

Daily Review – Friday 04-Nov-2016

US – Federal Funds Rate
To no-one’s surprise the FED left its interest rate unchanged. The market is gearing itself up for a post-election rate hike.

The FED’s following statement could support that:
“The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.”

 

US – Unemployment Claims
US labor department reported that jobless claims increased by 7K, from 258K to 265K in the week ended Oct. 29.

 

US – ISM Non-Manufacturing PMI
The Non-Manufacturing PMI registered 54.8% in October, 2.3% points lower than the September reading of 57.1%.
The non-manufacturing sector is still growing, but at a slower rate than previous month. The index has been above 50 for the past 81 months. The last time it was below 50 was in Dec’09.

 

US – Prelim Nonfarm Productivity q/q
US Bureau of Labor Statistics reported that the productivity in the nonfarm business sector increased by 3.1% in Q3.
This was the first quarterly increase in the nonfarm sector after three consecutive decreases.

 

US – Prelim Unit Labor Costs q/q
Unit labor costs in the nonfarm business sector increased 0.3% in Q3. This reflects a 3.4% increase in hourly compensation and a 3.1% increase in overall productivity.
Labor costs in the US have been increasing for 11 consecutive quarters since Q2’14.

 

US – Final Services PMI
The final Markit US Services Business Activity Index registered 54.8 in October, up 2.5 points from 52.3 in September and well above the crucial 50.0 mark.

 

US – Factory Orders m/m
The US Commerce Department said new orders for manufactured goods increased 0.3% in September after an upwardly revised 0.4% gain in August.

New orders for factory goods rose for a third straight month, but a further decline in order books suggested the manufacturing sector will struggle to get out of the prolonged slump.

 

US – Natural Gas Storage
The EIA reported that US natural gas storage increased by 54B cubic feet in the week ending Oct. 28, down from 73B in the week before.

 

UK – EU Membership Court Ruling
The High Court has ruled that the Parliament must vote on whether the UK can start the process of leaving the EU. This means that Theresa May and her government cannot trigger Article 50 of the Lisbon Treaty to begin the formal exit-negotiations on its own.
The government is appealing the High Court’s decision, with further a hearing expected next month.

UK – BOE Gov Carney Speaks

Mark Carney said the BOE is ready to tighten or ease monetary policy in response to inflation developments, dropping its earlier intention to cut the key rate to a new record low.
“Monetary policy can respond in either direction to changes to the economic outlook as they unfold to ensure a sustainable return of inflation to the target,” the BOE governor said on Thursday.

 

UK – Official Bank Rate
The BOE voted to maintain its interest rate at 0.25% as well as to not change and continue its bond purchase program.

 

UK – Services PMI
The UK services index rose to 54.5 in October, from 52.6 in September, signalling the fastest expansion since January.

 

EU – Spanish Unemployment Change
The number of unemployed people in Spain increased lower as to what the market was expecting (77.3K), but still a large number of 44.7K people become unemployed in October.

 

EU – Italian Monthly Unemployment Rate
The Italian unemployment rate rose a further 0.2% to 11.7 in September, from a upward revised 11.5% in August.

 

EU – Euro-area Unemployment Rate
The unemployment rate for the 19 countries that make up the Euro-area remained stable at 10% in September. On an annual basis September saw a 0.6% decrease compared to 2015.
The lowest unemployment rates in September 2016 were recorded in the Czech Republic (4.0%) and Germany (4.1%). The highest unemployment rates were seen in Greece (23.2% in July 2016) and Spain (19.3%).

 

Australia – Trade Balance
Australia reported a trade deficit of 1.23B AUD in September, a decrease of $667m (35%) on the deficit in August 2016 (-1.89B).

 

Australia – AIG Services Index
The Australian Industry Group’s Performance of Services Index (PSI) rose 1.6 points to 50.5 points in October, rising above the 50 point level indicating expansion after 2 months of sub-50 numbers.

 

New Zealand – ANZ Commodity Prices m/m
The ANZ Commodity Price Index is on its six-month consecutive rise and gained a further 0.7% in October, after reporting 5.1% in September.
Wool (-6.8%) and beef (-5.1%) suffered the largest falls. Butter (+6.5%), lamb (+5.5%) and aluminium (+4.5%) registered the largest gains

 

China – Caixin Services PMI
The Caixin China general services business activity index rose from 52.0 to 52.4 in October.

 

Upcoming Economic Calendar

 

Daily Review - Monday 07-Nov-2016 Daily Review - Thursday 03-Nov-2016