US, economic data released this week
included the November ISM manufacturing number, which at 53.6 was below
expectations and below October’s 55.7. Pending home sales and domestic
vehicle sales picked up but the best news of the week was on employment.
The Challenger job cuts reading for November showed a 72% fall in
planned firings, the lowest in the past couple of years, whereas October
non farm payrolls fell by 11,000 versus the -125,000 expected, with
September’s number being revised down to -111,000 from the original
-190,000. The Dow gained 0.8%, whilst the S&P 500 and the Nasdaq ended
the week higher by 1.7% and 2.6% respectively.
The ECB left interest rates on hold, at 1%, as unemployment for October
rose to 9.8% from September’s 9.7% and the Euro-Zone Q309 provisional
GDP remained at -4.1% annualised. The Zone’s retail sales for October
were flat versus the 0.2% expected, but it was an improvement on
September’s 0.5%. It was a light week for UK economic data, which
included a rise in average house prices of 0.5%, according to the
Nationwide for November and a 57.6% jump in new car registrations. The
FTSE 100 index added 1.5%, whilst the French CAC gained 3.4% and the
German DAX rose by 2.3%.
Out East, India’s Q309 GDP rose to 7.9% year on year, the fastest pace
in 18 months, whilst credit growth in Vietnam grew at 36% this year to
the end of November. Elsewhere, following the recent tussle between the
Bank of Japan and the Ministry of Finance, Japan has upped its
quantative easing, in a further effort to escape deflation. The Nikkei
soared by 10.4% and the Hang Seng gained 6.5%.
The $US index gained 1.1% to 75.8, in a wild week for currencies, with
other gainers including the $OZ and the $NZ. Losers included the Yen,
lower by 4.5% and the Swissie, which gave up 1.1%. Sovereign debt yields
jumped this week, with German bund yields up by 7bps to 3.23%, whilst
Japanese and UK 10-year yields rose by 4bps, and 16bps, ending the week
at 1.29% and 3.71% respectively. US Treasury 5 and 10 year yields soared
by 9.8% and 7.8%, in the main following the US employment data, ending
the week at 2.25% and 3.48% respectively.
Within the commodities complex the $crude oil price ended lower by 0.8%
at $75.5 a barrel, whilst the price of $Gold ended the week lower by
1.3% at $1162oz, despite the $45 drop on Friday.
Next week sees the latest trade data and consumer confidence figures for
the US, Japan and for the UK, with investor confidence, by way of the
December Sentix index, for the Euro-Zone also announced. Japan’s Q309
forecast GDP is due out, whilst US October consumer credit and November
advance retail sales will be released. The UK will also release October
industrial production numbers, November PPI and await any interest rate
change from the Bank of England’s MPC.
Friday also saw US regulators close down Ohio’s AmTrust Bank, the fourth
largest bank to fail this year. They also closed five others, bringing
the number of US banks failed this year to 130 versus the 25 in 2008 and
just 3 in 2007 and the most since 1992 at the height of the savings and
loan crisis.
There will be no week ending next week, as yours truly is off for a well
earned break. Normal services for the week ending 18th December 2009.
“The process by which banks create money is so
simple that its repulsive”
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