Daily Market News Sharing

[everestmarkets]

Daily Market News sharing from Everest Market

JOHANNESBURG--High unemployment, indebtedness and eroding consumer confidence are weighing on household consumption in South Africa, the central bank said Tuesday, adding strain to an already beleaguered economy.

The South African Reserve Bank said in its annual economic report that declining rate of domestic expenditure and household consumption are adding to pressure on an economy expected to grow just 2% this year, after expanding 2.5% in 2012.

Household consumption grew by 2.3% annually in the first quarter of this year, the slowest rate since at least 2010. That dragged down gross domestic expenditure overall, which expanded 3.5% annually in the first quarter after growing 4.1% annually in 2012.

The bank said slower growth in disposable income, high unemployment, indebtedness and waning consumer confidence were to blame for the falling rate of consumption growth. South Africa's unemployment rate is 25.2% and consumer confidence has dropped sharply since the middle of 2012.




(END) Dow Jones Newswires

July 23, 2013 04:14 ET (08:14 GMT)

 

[everestmarkets]

BEIJING--China's government appears to be warming to the idea of stimulus measures as it is confronted with a steady drizzle of bad news on the economy--the latest a survey that found manufacturing employment at its weakest since the global financial crisis.

While Premier Li Keqiang has often played down the room for stimulus since taking office in March, many analysts are increasingly confident that the disappointing economic data will yield some modest pro-growth measures.

In widely reported, though unverified, remarks this week, the premier stressed his commitment to meeting the 7.5% GDP target for this year. Growth fell to 7.5% on year in the second quarter from 7.7% in the first and many economists think it will slow further, making the annual target a write-off. That would make Mr. Li the first premier to miss the target since 1998.

"The tolerance of slower growth is not unlimited," said J.P. Morgan's top China economist, Zhu Haibin in a research report on Wednesday.

Mr. Zhu expects the slowdown to be met with a series of targeted micro-measures to keep growth on track. That could include railway construction, new IT and telecoms infrastructure, funding for green technology, and tax breaks for the service sector and small and medium-size enterprises.

Crucially, these measures would be funded from the central government's budget, unlike past stimulus programs which often amounted to a license to banks to dole out loans to favored companies--often state-backed--with little attention to their creditworthiness.

Mr. Li's government could also speed up approvals of major investment projects, an old trick often pulled out when the economy starts to stutter. The government has been playing its cards close to the chest, and has yet to officially affirm that it will stimulate the economy.

The HSBC flash manufacturing Purchasing Managers' Index, a survey of the crucial manufacturing sector published Wednesday, provides one of the first insights into what happened in the economy this month. The index fell to 47.7 from a final reading of 48.2 in June, where anything below 50 indicates contraction.

Of particular concern to policy makers is the labor market. HSBC's employment subindex came in below the headline number at 47.3, the lowest level since March 2009, when firms laid off workers en masse in the teeth of the global financial crisis.

"As Beijing has recently stressed [the need] to secure the minimum level of growth required to ensure stable employment, the flash PMI reinforces the need to introduce additional fine-tuning measures," said Qu Hongbin, HSBC's chief China economist, in a statement accompanying the data.

Markets largely shrugged off the data, with the benchmark Shanghai Composite Index down just 1.2% as of 1 p.m. local time. The reaction would have been worse if investors were not confident that economic weakness will be met with countermeasures government, said Bank of America-Merrill Lynch economist Lu Ting in a research report after the PMI came out.

The pressure on China's manufacturing sector, once the mainstay of the economy, has been ratcheting up in recent years as rising wages and a slowly strengthening currency conspire to erode competitiveness. Though manufacturing wages in China are just 17% of those in the U.S., much poorer productivity means labor costs per unit of output have almost equalized, according to calculations by CLSA, a Hong-Kong-based brokerage. That has led to speculation of a "re-shoring" process with industry moving back to America.

"What's dragging down the average manufacturing productivity figures for China are the state-owned enterprises," said Amar Gill, CLSA's head of Asia research. "China needs to increase productivity at a faster rate than it has been able to achieve over the last 10 or 20 years. That will only happen if the private sector and small and medium-size enterprises get better access to financing."

On Friday, China scrapped the minimum interest rate on bank loans, a first step toward liberalizing the financial system to provide that kind of access to credit. But many state companies can still pull political strings to get cheap loans when they need them.


(END) Dow Jones Newswires

July 24, 2013 03:05 ET (07:05 GMT)

 

[everestmarkets]

The dollar fell against other major currencies in Asia Monday, hitting a fresh one-month low against the yen, amid expectations that the Federal Reserve will stick to ultra-low interest rates for a considerable length of time and caution over the pace of a U.S. economic recovery ahead of key economic indicators.

The Fed has said that it intends to keep short-term interest rates near zero at least until the jobless rate drops to 6.5% or unless inflation rises to annualized rate of 2.5%. Chairman Ben Bernanke suggested at his June press conference that the Fed might lower that 6.5% threshold for unemployment, which was set in September. Such a move would drive home to markets that short-term interest rates will stay low for a long time.

"Expectations for a forward guidance change are behind the dollar's falls," said Tsunemasa Tsukada, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking.

Among key data to be released this week are U.S. gross domestic product figures for the second quarter Wednesday, the Fed monetary policy outcome Wednesday and U.S. jobs data Friday.

"The U.S. jobs data is the most important," said Akira Moroga, manager of forex products group at Aozora Bank. "While Fed officials may discuss potential changes in forward guidance, market participants aren't expecting a changed to be announced at this time."

The dollar was at Y97.86 as of 0450 GMT after falling to a fresh one-month low of Y97.63. The U.S. unit was at Y98.20 late Friday in New York, according to EBS. The dollar was at CHF0.9282 from CHF0.9289 late Friday.

The Wall Street Journal Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 73.765 from 73.840.


Interbank Foreign Exchange Rates At 00:50 ET / 0450 GMT


Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31

USD/JPY Japan 97.85-88 98.05-12 -0.22 98.34 97.64 +12.82
EUR/USD Euro 1.3276-80 1.3283-88 -0.06 1.3293 1.3276 +0.63
GBP/USD U.K. 1.5378-82 1.5379-86 -0.02 1.5403 1.5378 -5.33
USD/CHF Switzerland 0.9283-88 0.9278-86 +0.04 0.9289 0.9272 +1.46
USD/CAD Canada 1.0272-76 1.0278-91 -0.10 1.0285 1.0264 +3.49
AUD/USD Australia 0.9258-62 0.9249-57 +0.08 0.9286 0.9248 -10.90
NZD/USD New Zealand 0.8081-84 0.8071-81 +0.08 0.8098 0.8074 -2.36

Euro Rate
EUR/JPY Japan 129.94-96 130.25-42 -0.29 130.60 129.78 +13.54

 

[everestmarkets]

July 30 2013

Robust employment prospects and moderate inflation have propelled German consumer sentiment to a fresh six-year high, the country's largest market research institute said Tuesday, indicating private consumption will be a key driver of growth in Europe's largest economy this year.

The GfK's forward-looking consumer sentiment indicator rose for the seventh straight month, to 7.0 points in August from 6.8 points in July, hitting its highest level since September 2007 and beating economists' forecast of a smaller increase to 6.9 points. While GfK's overall consumer climate indicator refers to August, all sub-indicators refer to the current month.

The research firm forecasts private consumption--which accounts for more than half of Germany's gross domestic product--will rise about 1% this year in inflation-adjusted terms, despite "restrained" exports and corporate investment.

German households' income expectations, meanwhile, hit their highest level in over two years in July, GfK said, noting most consumers consider it "advisable to make major purchases' in light of record low interest rates.

The roughly 2,000 consumers polled by GfK each month were also modestly optimistic about the country's economic outlook, the survey showed.

"Since the end of last year, the economic outlook has been on an upward trend, although there is still considerable room for improvement in the indicator value," GfK said. Economic expectations were slightly above average in July, GfK said, suggesting Germany's economic recovery will be sluggish, held back by persistent recessions in a number of euro-zone countries.

 

[everestmarkets]

July 31 2013

FRANKFURT--German jobless claims unexpectedly dropped in July amid accelerating economic growth in Europe's largest economy, data from the BA labor agency showed Wednesday, indicating that the labor market is catching up further from a weak start to the year.

German jobless claims in July fell by 7,000 on the month, after declining by a revised 13,000 in June and beating economists' forecast for an unchanged outcome. The data are adjusted for seasonal swings.

The German labor market is benefiting from a pickup in economic activity in the second quarter, said the head of the BA, Frank-Juergen Weise. Most economists, including researchers at the Bundesbank, expect that gross domestic product gained "strongly" in the second quarter, following almost no growth at the start of the year.

 

[everestmarkets]

August 5, 2013

Euro-zone Business Activity Grows

Activity among businesses in the euro zone grew modestly in July for the first time in a year and a half, adding to evidence the crisis-hit economy is stabilizing after a long recession.

Data company Markit said Monday its composite purchasing managers' index, based on polls of company executives in the manufacturing and services sectors, rose to 50.5 in July from 48.7 in June.

That is the first above-50 reading, signalling growth, since January 2012. It was revised up from an early estimate last month of 50.4.

The improvement was driven by manufacturing, growth in which outweighed a slight contraction in the services sector. Factory activity in Germany, the bloc's biggest economy and main exporter, showed the strongest performance in 18 months.

The PMIs add to other evidence, such as a slight fall in unemployment, that suggest the economy of the 17 nations that use the euro has passed its worst point after suffering an 18-month recession up to the end of March. Official data for the April-to-June period are due later this month and are expected to show the economy held steady or even put on modest growth. Monday's surveys for July suggest the improvement continued into the third quarter.

 

[everestmarkets]

August 6, 2013

Europe's stock markets are set to edge lower Tuesday, with comments from Dallas Fed chief Richard Fisher bringing the topic of the U.S. central bank scaling back its $85 billion-a-month bond-buying program back into the spotlight.

Read more at : http://bit.ly/11Jire7

 

[Agnnis bingamin]

The dollar reached the highest in four weeks against a basket of its peers before data forecast to show U.S. consumer spending rose for a third month, building the case for the Federal Reserve to reduce stimulus next month.

 

[Neil Broom]

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[fxapex]

Is US shutdown going to have a deep impact on the market.......

 

[fideliscm]

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