US, economic data released this week
included August durable goods orders, which at -2.4% were far worse than
analyst expectations, and Q209 GDP numbers, which came in at a better
than forecast -0.7%. The S&P/Case Shiller home price index for July
improved, whereas new home sales for August disappointed. All eyes were
on the September unemployment data, which came in far worse than
predicted and more comment on this can be seen below. The Dow and the
S&P 500 fell by 1.8% each, whilst he Nasdaq ended the week lower by 2%.
Euro-Zone consumer confidence for September improved to -19 from the
prior -22, but the region’s unemployment rate for August increased to
9.6% versus July’s 9.5%.UK Q209 forecast GDP was a worse than expected
-5.5% annualised but house prices improved by 0.9% in September,
according to the Nationwide, versus Augusts’1.4%. August mortgage
approvals were higher than forecast but consumer credit fell by £0.3BN.
The FTSE 100 index fell 1.8%, whilst the French CAC and the German DAX
ended lower by 2.4% and 2% respectively.
Out East, “Glorious Property Holdings Ltd,” became the 5th straight IPO
in Hong Kong to slump in price on its debut day, this one by 15%.
Meanwhile, Japan’s unemployment rate for August fell to 5.5% from July’s
5.7% but housing starts for the same month fell by 38.3% annualised. The
Nikkei fell by 5.2% and the Hang Seng gave up 3.1%.
The $US index rose by 0.4% to 77, with other gainers including the South
Korean won and the $Canadian. Sovereign debt yields moved lower this
week, with German bund yields down by 13 bps to 3.13%, whilst Japanese
and UK 10-year yields fell by 6bps, and 17bps, ending the week at 1.25%
and 3.44% respectively. US Treasury 5 and 10 year yields jumped by 7.5%
and 3.9%, ending the week at 2.46% and 3.47%.
Within the commodities complex the $crude oil price jumped by 6% to
$69.95 a barrel, whilst the price of $Gold gained 1.2%, ending the week
at $1003oz.
Next week sees the latest trade data for the US and for the UK, with
August consumer credit numbers also due out for the US. August Euro-Zone
retail sales will be released, as will Q209 GDP data. The ECB and the
Bank of England MPC will decide on any policy change for interest rates,
whilst in Japan the latest machine tool orders and bankruptcies will be
announced.
Returning to the US unemployment situation, payrolls dropped by 263,000
in September, placing the official unemployment rate at 9.8, against the
9.7% in August. However the Labour Department have quite a few different
statistical measurements on unemployment, including the “U-6” measure,
which includes part time workers who want full time work and discouraged
workers who have stopped looking, but will take a job if offered one.
The U-6 unemployment rate for September was at 17%, up from 16.8% in
August and the 10.8% seen in September 2008.
“It’s
a recession when your neighbour loses his job,
but a depression when you lose yours”
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