Somber Emerging Market Economic News

November 3, 2015

Brazil’s manufacturing purchasing managers index fell 2.9 points to a 79-month low of 44.1 in October.

Following a 49% year-to-date slide of the Zambian kwacha, the central bank of Zambia’s key interest rate was raised today by 300 basis points to 15.5%.  Currency depreciation is feeding a double-digit inflation rate there.

The private non-oil PMI readings of Egypt, Saudi Arabia, and the United Arab Emirates each dropped in October.  Egypt’s 47.2 reading was down from 50.3 in September and represents an 8-month low and the first sub-50 outcome since July.  Saudi Arabia’s 55.7 score constitutes a record low just two months after August’s 5-month high of 58.7.  The UAE reading declined 2.0 points to a 2-1/2 year low of 54.0.

Retail sales in Hong Kong slumped 6.4% in the year to September versus a 5.3% drop in the 12 months to August.  Sales in 3Q were 0.3% lower than in 2Q.

South Africa’s composite PMI dropped 0.8 points in October.

Japanese markets were shut Tuesday for Culture Day.

West Texas Intermediate crude oil strengthened 1.0% to $46.59 per barrel.  Comex gold dipped 0.1% to $1,132.56 per troy ounce.

Ten-year sovereign debt yields in Germany and Britain remain unchanged.

In spite of a 0.3% further dip in Chinese share prices, many other Pacific Rim markets posted advances.  Gains amounted to 1.4% in Australia, 1.1% in Taiwan, 1.5% in Indonesia, 0.9% in Singapore, and 0.7% in New Zealand, South Korea and Hong Kong.  In Europe, equities have fallen by 1.2% in Greece and 0.4% in Germany and Switzerland, but they are up 0.5% in the U.K. and Italy and 0.3% in Spain.

The dollar is narrowly firmer, having risen 0.4% against the euro and kiwi, 0.3% versus the Swiss franc, 0.2% relative to sterling, and 0.1% vis-a-vis the yen and loonie.  The Aussie dollar bucked the trend, gaining 0.3% against its U.S. counterpart.

The Reserve Bank of Australia’s Official Cash Rate was left at a record 2.0% low for a sixth straight time, but the accompanying statement kept alive the possibility of some further easing: “Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. The Board will continue to assess the outlook, and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”

New Zealand house price inflation accelerated to 14.0% in October from 12.6% in September.

The British construction purchasing managers index slid 1.1 points in October but conveyed continuing robust activity with a reading of 58.8.  Growth in new business was at a one-year high, and construction jobs grew at their best pace in 11 months.

Irish unemployment edged down 0.1 percentage point to 9.3% in October and was 1.3 percentage points lower than a year earlier.

South Korean CPI inflation accelerated more than anticipated in October but stayed below the 1.0% threshold at 0.9%.  Core inflation climbed 0.2 percentage points to 2.3%.

In Turkey, CPI inflation fell 0.3 percentage points (ppts) to 7.58%, and PPI inflation plunged 1.2 ppts to 5.74%. 

Romanian on-year non-auto retail sales growth accelerated to 10.9% in September from 8.0% in August, 8.5% in July and 7.7% in June.  Romanian producer prices fell 2.8% in the year to September.

There are a number of scheduled U.S. data releases today: factory orders, the IBD/TIPP optimism index, the NY factory PMI known as the NAPM index, and weekly chain store sales.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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