Waiting for U.S. and Canadian Labor Market Statistical Releases

October 6, 2017

Investors await the U.S. Labor Department jobs report for September at 08:30 EDT, knowing that it will be badly distorted by the hurricanes that hit Texas and Florida. Canadian labor market figures are due also.

Concern over Spain’s uncertain political tension continues to fester, tempering enthusiasm that otherwise would arise from upbeat data like today’s report on German industrial orders.

German industrial orders jumped 3.6% in August, far outpacing expectations of a sub-1% increase. Orders in July/August were on average 2.4% greater than the second-quarter mean, with advances of similar size from domestic demand and exports. The one cloud in the data was a 1.3% decline in domestic orders for capital goods, which tend to be a barometer of future business investment.

The dollar climbed overnight by 0.4% against the kiwi and sterling, 0.2% relative to the Australian dollar and 0.1% vis-a-vis the yen, Swiss franc, and Mexican peso. The loonie and euro are unchanged on balance.

Markets were still closed in China for a national holiday and South Korea for the Full Moon Festival. Elsewhere in the Pacific Rim, equities rose 1.0% in Australia, 0.9% in Singapore, 0.7% in Hong Kong and India and 0.3% in Japan.

Reflecting the crisis in Catalan, the stock markets in Spain and Italy are down 0.7%. The Paris CAC has edged 0.2% lower, but the British Ftse and German DAX have risen by 0.2% and 0.1%.

The ten-year German bund yield is two basis points higher, and its Japanese counterpart edged up a basis point.

West Texas Intermediate oil fell 1.0% to 50.28 per barrel. Comex gold is down 0.1% at $1,271.90 per ounce.

Despite a $1.7 billion decline in September, Japanese international reserves still show a year-to-date increase of just under $50 billion. Japan’s index of leading economic indicators rose 1.6 points to a 42-month high of 106.8 in August, while the index of coincident economic indicators printed 1.9 points higher at 117.6, highest since February 2008. A third Japanese data release shows a 0.9% on-year rise in nominal labor cash earnings. Real labor cash earnings were 0.1% higher.

Hong Kong’s private purchasing managers index, which had dipped under the 50 level that separates expansion from contraction in August, rebounded 0.5 points to a 2-month high of 51.2 in September.

Australia’s construction PMI fell 0.6 points to a 5-month low of 54.7 in September.

In the year to August industrial output in Spain rose 1.8%, but Italian retail sales fell 0.3%. Czech retail sales rose 0.4% on month and 4.8% on year in August.

Industrial production in Hungary, Norway, and Denmark grew by 6.8%, 6.7% and 4.0% in the 12 months to August.

France recorded smaller deficits in August on its trade balance of EUR 4.51 billion and current account of EUR 1.50 billion.

The Halifax index of British house prices rose 0.8% last month and posted a 4.0% on-year increase during the third quarter, the largest 3-month on-year pace since February.

In addition to the aforementioned U.S. jobs report, several Fed officials will be speaking publicly today, including Kapan, George, Dudley and Bostic.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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