One of the most respected credit agencies in the USA, Standard & Poor’s, has downgraded Greece’s credit rating this morning to that of an emerging market. S&P Dow Jones states that Greece no longer classifies as a developed market. Instead, the indices provider gives it “emerging market status” for the following reasons; the Greek equity market lags behind the advancements in market practices typical of other developed markets. Dramatic and consistent reduction in market size over the past few years. Failed market accessibility.
French Household consumption on goods slightly decreased in September (-0.1%)
In September, household expenditure on goods slightly decreased, by 0.1% in volume, after -0.3% in August. They decreased by 0.1% over the third quarter after +0,3% in Q2. This outline was due to the consumption of energy products (-3.0% after +2.5%). Engineered goods increased in September and over the third quarter. Durables increased after a slight increase in August (+0.1%), household expenditure on durable goods rose in September (+0.6%) and over the third quarter (+0.8%, after +1.6%). Car purchases accelerated in September (+1.0% after 0.4% in August).
Italy’s unemployment rate unexpectedly rises to recorded high
Italy’s jobless rate rose to an all-time high as companies failed to hire amid concerns about the persistent recession. Unemployment increased to 12.5 percent from a revised 12.4 percent in August, the Rome-based national statistics office Istat said in a preliminary report today. The September rate, the highest since the data series began in the first quarter of 1977, was above the 12.3 percent median of ten estimates in a Bloomberg survey.
ECB’s Nowotny says there will be further liquidity provision
Nowotny says the ECB will provide more liquidity by the time cheap long-term loans it made in Dec 2011 and early last year expire. He declined to comment on whether this would be through renewed LTRO’s ( long term financing operations ) or other means.
Japan commits to monetary stimulus as housing and infrastructure projects grow exponentially
The Bank of Japan kept its monetary policy steady on Thursday, encouraged by signs that its aggressive stimulus is working its way through broader sectors of the economy. The BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen to 70 trillion yen ($611 billion to $713 billion).
Japan’s housing starts and construction orders increased markedly, figures from the Ministry of Land, Infrastructure, Transport and Tourism revealed on Thursday. The annual increase in housing starts increased to 19.4 percent from 8.8 percent in August. The rate exceeded the 12.1 percent consensus. Annualized housing starts rose to 1.04 million from 960,000 in the previous month. It was forecast to rise to 983,000, construction orders received by 50 big contractors recorded an 89.8 percent annual growth
USA shrinks budget deficit but balloons national debt
The years of vast US budget deficits appears to be at an end, the gap between revenues and spending fell to just 4.1 per cent of gross domestic product in the last fiscal year. According to the US Treasury the deficit was $680bn, compared with $1.09tn, or 6.8 per cent of GDP, in 2012. The figure came in below budget projections earlier this year. However, despite the deficit shrinking, the national debt has ballooned by circa $6 trillion since 2008.
UK House prices continue to rise in October
The UK housing market appears to be following the more resilient upward trend evident in the wider economy in recent quarters. House prices increased by 1% over the month in October, maintaining the momentum that has been building in the second half of 2013. After averaging less than 1% in the first half of the year, the annual pace of house price growth accelerated to 5.8% in October from 5% the previous month. The ability and willingness of potential buyers to transact has been steadily increasing.
Market snapshot at 10:00 am UK time.
Asian bourse indices suffered losses in the overnight session; the Nikkei closed down 1.20%, the Hang Seng closed down 0.42% and the CSI down 1.40%. European markets are down in the early part of the morning session; STOXX down 0.07%, FTSE down 0.38%, CAC down 0.24%, DAX down 0.31%. Despite the S&P downgrade the Athens exchange is up 0.54%.
ICE WTI oil is currently flat at $96.76 per barrel, NYMEX natural is up 0.39% at $3.63 per therm, COMEX gold is down 1.12% at $1334.20 per ounce, with silver on COMEX down 2.80% at $22.34 per ounce.
Forex focus
The dollar advanced 0.2 percent to $1.3710 per euro early in London after gaining 0.5 percent during the previous three days. The U.S. currency fell 0.2 percent to 98.31 yen after climbing to 98.68 yesterday, the highest since Oct. 17th. The yen strengthened 0.4 percent to 134.79 per euro.
The U.S. Dollar Index, which monitors the greenback versus its 10 major counterparts, was little changed at 1,007.23 after climbing to 1,009.13 yesterday, the highest level since Oct. 17th.
Sterling rose 0.2 percent to 85.50 pence per euro after depreciating to 85.85 pence on Oct. 29th, the weakest since Aug. 29th. Sterling was little changed at $1.6037. The pound has fallen by 1.4 percent in the past month, the worst performer after the Canadian dollar among 10 developed-nation currencies tracked by Bloomberg’s Correlation-Weighted Indices. The euro rose 1.1 percent, while the dollar dropped 0.4 percent.
Bonds
The U.K. 10-year yield rose two basis points, or 0.02 percentage point, to 2.56 percent early in London after dropping to 2.54 percent yesterday, the lowest since Aug. 13th. The 2.25 percent bond due in September 2023 fell 0.18, or 1.80 pounds per 1,000-pound ($1,604) face amount, to 97.30. The yield dropped 16 basis points this month.
