Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the number of Americans filing new claims for unemployment benefits fell sharply last week to the lowest level since February 2008. And there was positive jobs surprise in Australia too - Australian employers hired almost three times the number of workers economists had forecast for September, even as the unemployment rate jumped, as many more people reentered the job market.
There has been a surprise also in the euro debt markets. Italy got away a big new debt auction successfully, with a bid-to-cover ratio of 1.7 and an interest rate at an impressive 2.86%. This is in stark contrast to Spain where their government bonds are facing a selloff by investors concerned that the nation’s credit rating will be cut to non-investment grade after Standard & Poor’s lowered its ranking for the debt.
The German-led drive for austerity is worrying the IMF: Christine Lagarde said overnight that debt-stricken Greece should be given more time to implement its austerity program and European countries should refrain from fresh budget cuts or tax rises if growth weakens.
Also worried are the South Koreans: The Bank of Korea has cut its base interest rate for the second time this year in a move designed to shore up Asia’s fourth-largest economy as it slows on the back of Europe’s protracted debt crisis and the economic slowdown in the US and China.
And Japan has signalled it is going its own way on its currency. It wants to rein in the yen's strength, it says. Apparently it has been negotiating a co-ordinated response with the US but now says differences on foreign exchange couldn't be resolved through negotiations.
Meanwhile, the lower US currency isn't helping its trade deficit which widened in August, as exports of agricultural and industrial goods fell.
The NZ$ was unaffected yesterday by all this and is still holding this morning at 81.8 USc and 72.9 on the TWI, levels it has been broadly at since early August - or, apart from an 8 week period mid-year, broadly at all year.
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5 Comments
Can the Gummster raid your fridge Walter , I love the rhubarb-crumble .....
..... MOA Breweries is to list on the NZX on November 13 . The company has successfully raised $ 16 million for $ 6 million upgrade work on their Blenheim brewery , and for working capital ...
The IPO price was $ 1.25 per share ...... and only 42.1 % of the company has been floated . This implies a total capitalisation of $ 30 million for the firm .....
...... but , revenue was only $ 4.3 million in the current financial year , and a net operating loss of $ 3.5 million achieved . Next year , revenues are expected to double , and a net loss of $ 2.5 million is predicted !
"Good jobs data"....why!....
"Initial jobless claims, which are a measure of the number of people recently laid off, fell by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years.
But the Labor Department spokesman said the numbers were skewed by one large state that underreported its data. The spokesman declined to identify the state, but economists believe California is the only state large enough to have such a significant impact on the overall numbers"
Read more at http://globaleconomicanalysis.blogspot.co.nz/#xEwbbiJIu68epyse.99
Last Friday the BLS published the Non-Farm-Payroll (NFP) numbers for September, at the same time revising upwards the previous month of August number by 50%, and a similar revision for July. The Bureau of Labor Statistics specialise in this. It's their job. And yet they made mistakes in July and August. The extent of the August mistake was a massive 50%. How can you make a 50% mistake adding up numbers? Stuffed if I know. They should be fired. Watch next months revisions.
As for last nights new-jobless-claims and under-reporting by one particular state, you'd have to wonder if that state was responsible for the revisions to the NFP. Jiggery-pokery.
Jeremy Warner over at The Telegraph sums up rather succinctly the reason why you should never take the IMF seriously...
Basically they have realised that austerity for everyone just leads to a debt trap, but because the IMF is still very European they won't admit that the problem is simply the Euro (i.e. it blatantly doesn't work).
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