Archives of “Economy” category

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China premier Li Keqiang: China economy is facing new downward pressure

  
Analysis, Economy

Remarks by China premier, Li Keqiang

  • Domestic and foreign situation still complex and severe
  • Will take measures to reduce pressure of high commodity prices
  • Will keep yuan exchange rate basically stable
He has been repeating the above comments for quite a while now, so there isn’t much of a big change to policy stance by local authorities in that respect.
They are recognising that the economy is facing challenges but they maintain that supportive measures will be undertaken if and when necessary.

US initial jobless claims 268K vs 260K estimate

  
Analysis, Economy

US initial jobless claims and continuing claims for the current week

US initial jobs claims
  • Initial jobless claims 268K vs 260K estimate. Prior week revised to 269. This is the lowest level since March 14, 2021 it was 256K
  • 4 week moving average 272.75K versus 278.5K. THis  is the lowest since March 14, 2020 when it was at 225.5K
  • Continuing claims 2.08M vs 2.120M estimate
  • 4 week moving average of continuing claims 2.157K vs 2.257K last week. This is thhe lowest level since March 21, 2020
  • The largest increases in initial claims for the week ending November 6 were in Kentucky (+6,716), Ohio (+3,846), Tennessee (+2,411), Illinois (+1,893), and Michigan (+1,564),
  • The largest decreases were in California (-4,222), District of Columbia (-1,794), and Louisiana (-1,028).

PBOC sets USD/ CNY mid-point today at 6.3935 (vs. estimate at 6.3919)

  
Analysis, Economy

The People’s Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

  • USD/CNY is permitted to trade plus or minus 2% from this daily reference rate.
  • CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.
  • A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
  • The previous close was 6.3917
  • Yesterday’s reference rate was 6.3924

Japan trade balance for October Y -67.4bn (expected Y -310bn)

  
Analysis, Economy

Japan trade balance for October Y -67.4bn

  • expected Y -310bn, prior Y -624bn

Trade balance adjusted Y -445bn

  • expected Y -446bn, prior Y -625bn

Exports 9.4% y/y

  • expected 9.9% y/y, prior 13%

Imports 26.7% y/y

  • expected 31.9% y/y, prior 38.6%

Exports to:

  • China +9.5% y/y
  • Asia +15% y/y
  • the US +0.4% y/y
Exports and imports both miss in the month. Expectations are that Japan’s economic performance will improve for the rest of Q4 as it emerges from coronavirus restrictions.

Deutsche Bank CEO calls on central banks to fight inflation

  
Analysis, Economy

Deutsche Bank CEO, Christian Sewing, remarks at a banking conference

Inflation
He says that:

“I think monetary policy must take countermeasures here, and sooner rather than later. The supposed panacea of recent years – low interest rates with seemingly stable prices – has lost its effect, and now we are struggling with the side effects.”

Adding that he does not share the opinion that inflation increases are going to be temporary.

Japan Q3 preliminary GDP -0.8% q/q (expected -0.2%)

  
Analysis, Economy

Japanese third quarter growth data

Q3 GDP (preliminary):

  •  -0.8% q/q vs. expected -0.2% q/q, prior 0.5%
  •  -3.0% y/y vs. expected -0.8% y/y, prior 1.9%
  • GDP deflator (an inflation indication) -1.1% y/y. Falling 3 quarters in a row now.
  • Private consumption -1.1% q/q  vs expected at -0.5% and prior at +0.9%
  • Business spending (Capex) -3.8% q/q    vs. expected -0.8% and prior +2.2%

Exports -2.1% q/q, the first fall in 5 quarters

Graph does not include today’s data yet, but its back under the zero line for a contraction:
japan gdp q3 2021Comments from a Japanese data spokesman says declines in autos, household electronics consumption dragged down private demand. Auto, constructions, production were contributors to the capex decline.

US October CPI +6.2% y/y vs +5.8% expected

  
Analysis, Economy

US October 2021 consumer price index data

US CPI yy
  • Highest since 1990
  • Prior was 5.4%
  • m/m CPI +0.9% vs +0.6% expected
  • Prior m/m reading was +0.2%
  • Real weekly earnings -0.9% vs +0.8% prior
Core inflation:

  • Ex food and energy +4.6% vs +4.3% y/y expected
  • Prior ex food and energy +4.0%
  • Core m/m +0.6% vs +0.4% exp
  • Prior core m/m +0.2%
  • Full report

Note on the consensus numbers: I’ve seen some different estimates that were mostly lower than what I have here. So the numbers beat the estimates but perhaps by even more than is shown here.

The US dollar has jumped on the headlines around 20 pips across the board.
More details:
  • CPI food +0.9% m/m
  • Housing +0.7% m/m
  • Owners’ equivalent rent +0.4%
  • CPI energy +4.8%
  • Gasoline +6.1%
  • New vehicles +1.4%
  • Used cars +2.5%
Credit Suisse said a rise in housing of more than 0.5% would be a potential signal of more persistent inflation.
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