More Americans than forecast filed for unemployment benefit whilst USA manufacturing flash PMI missed expectation printing a twelve month low…
The department in the USA govt. apparatus responsible for the weekly unemployment claims number, appears to have got ahead of the curve regarding the missing prints from Nevada and California. Thursday’s weekly unemployment claims print came in at 350,000 down 12,000 from the revised figure of 362,000 the previous week. The 4-week moving average was 348,250, an increase of 10,750 from the previous week’s revised average of 337,500. The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending October 12, unchanged from the prior week’s unrevised rate. As we’ve stated on previous occasions these weekly figures from the USA are remaining week after week in a stubborn range of circa 330-350K each week.
US International Trade in Goods and Services: August 2013
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced on Thursday that total August exports of $189.2 billion and imports of $228.0 billion resulted in a goods and services deficit of $38.8 billion, up from $38.6 billion in July. August exports were $0.1 billion less than July exports of $189.3 billion. August imports were virtually unchanged at $228.0 billion. In August, the goods deficit increased $0.1 billion from July to $58.2 billion, and the services surplus was virtually unchanged at $19.4 billion. Exports of goods decreased.
If ever any of our readers wondered just how much public relations ‘spin’ certain publishers attach to their press releases then look no further than the latest publication courtesy of the CBI. Their latest report stated this;
Steady growth and rising optimism among UK’s manufacturers – CBI
“Optimism among UK manufacturers rose at the fastest rate since April 2010 as orders and output continued to grow steadily in the three months to October. That’s according to the latest CBI quarterly Industrial Trends Survey. The survey of more than 350 manufacturers reveals total new orders grew for the second consecutive quarter and output rose for the third consecutive quarter. Total new orders grew at the fastest pace since April 2012, with growth in the volume of domestic orders at its highest rate since April 2011.”
Buried deep in the report was the following nugget of desperately poor information, that an organisation busily cheer leading for the UK economy, would rather keep buried. The CBI’s industrial trends survey reported that confidence in the sector grew this month, but a slump in the export order book to -12 slowed output. The survey found that the export order book fell from +6 to -12. Output over the next three months is expected to slow after seven months of double-digit expansion, culminating in a +33 figure in September, which declined to +9 in October.
Market overview
Despite poor unemployment data and a falling manufacturing PMI that missed the predicted print by some distance, the DJIA closed up 0.62%. The SPX closed up 0.33% and the NASDAQ closed up 0.56%. European markets also brushed off a series of poor PMIs to close up. STOXX index up 0.72%, FTSE up 0.58%, CAC up 0.35%, DAX up 0.68%. Despite an Italian confidence survey falling the MIB closed up 1.28% on the day. The index was outdone by the Athens exchange which closed up 1.56%.
Commodities broke their losing streak; ICE WTI oil closing up 0.27% on the day at $97.12 per barrel, NYMEX natural closing up 0.28% on the day at $3.63 per therm. COMEX gold rose sharply in the two trading sessions on Thursday, up 1.22% on the day at $1350.30 per ounce. Silver on COMEX was up 0.91% on the day at $22.82 per ounce.
Looking towards tomorrow’s open the DJIA equity index future is up 0.67%, SPX up 0.38% with the NASDAQ equity index future up 0.93%.
Forex focus
The dollar lost 0.2 percent to $1.3801 per euro late in New York and reached $1.3825, the weakest since November 2011. It fell 0.1 percent to 97.28 yen after touching 97.16 Wednesday, the lowest since Oct. 9th. Europe’s shared currency gained 0.1 percent to 134.26 yen after rising as much as 0.5 percent earlier and weakening 0.2 percent. The dollar slid to a two-year low versus the euro as weaker-than-forecast economic data and concern that U.S. growth was hurt by a government shutdown added to bets the Federal Reserve will delay slowing stimulus until next year.
The loonie, as the Canadian dollar is known, fell by 0.4 percent to C$1.0422 per U.S. dollar in Toronto. It has dropped as much as 1.5 percent during the past two days and reaching the weakest since Sept. 9th. One loonie buys 95.95 U.S. cents. The Canadian dollar had the biggest two-day slump in four months after the central bank altered its forward guidance narrative regarding future interest-rate rises that had been in place for more than a year, as risks of a worsening economy have increased.
Bonds
The benchmark 10-year yield rose two basis points, or 0.02 percentage point, to 2.52 percent at 5 p.m. in New York. The yield dropped to 2.47 percent yesterday, the lowest level since July 22nd, and has fallen six basis points this week. The 2.5 percent note due in August 2023 fell 5/32, or $1.56 per $1,000 face value, to 99 27/32. Treasury 10-year note yields traded at almost a three-month low as signs of a loss of momentum in global economic growth stoked bets the Federal Reserve will delay slowing its stimulus program until next year.
High impact news events and policy decisions that could affect sentiment on October 25th
A major publication, that could impact on the UK FTSE and the value of sterling, is the latest UK preliminary GDP figure, published courtesy of the UK’s ONS. The expectation is that the print will come in at 0.8%, up from 0.7% in the previous quarter. The German IFO business index is predicted to come in at an improved 108.2. The EU economic summit is worth keeping aware of given the potential for a surprise policy announcement. Core durable goods orders in the USA are expected to come in at 0.6% up from the -0.1% figure last month.
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