Business activity in the euro zone stayed robust in August as it outpaced Britain, where an economy increasingly bogged down by Brexit worries lost momentum, surveys showed on Tuesday. Growth in the euro zone slowed only marginally from the blistering pace set in the spring, according to a Purchasing Managers’ Index. An equivalent reading for Britain was the lowest since last September, shortly after the referendum vote to leave the European Union. “The story in the next couple of years is that by all probability – unless we get an external shock – the euro zone recovery is for real. I don’t see any reason why this will peter out anytime soon,” said Erik Nielsen, group chief economist at UniCredit. “Where would growth come from at … [Read More...]
SOURCE: MarketPulse – Read entire story here.
The Bank of England took steps to ensure British banks can keep lending and insurers do not dump corporate bonds in the “challenging” period that is likely to follow the country’s shock vote to leave the European Union. The central bank said it would lower the amount of capital banks are required to hold in reserve, freeing up an extra 150 billion pounds for lending in a reversal of a decision it took earlier this year, when it started tightening screws on lenders because Britain’s economy appeared on course for more growth. BoE Governor Mark Carney said the move represented a “major change” that would help the economy to weather the Brexit hit. “It means that three quarters of UK banks, accounting for 90 … [Read More...]
All of which will makes markets around the world shudder, shrug and generally behave like petulant teenagers. “Stocks have entered a new realm of volatility, unlikely to abate anytime soon,” according to a Wells Fargo research note issued on Monday. It warned, “Get used to it.” But it would be wrong to focus exclusively on Britain when considering the possible financial ramifications and permutations. In a truly dire scenario, Britain is just the leading domino. It’s the next dominoes — most likely across the Channel — that matter more. “We see Brexit as just one step in a process that is unavoidable of further referendums by other nations to exit the E.U.,” Felix Zulauf, an investor who operates a … [Read More...]
European equity markets have rebound from steep yesterday’s losses. On the forex market USD JPY and CHF were the biggest losers in yesterday’s rout. [Read More...]
As the UK’s Brexit referendum draws closer the shadow it casts over markets spreads to engulf the whole world. [Read More...]
Today we take a look at the evolving momentum behind the Brexit movement and as every move in financial markets or the global economy is blamed on the Brexit impact we take a look at value and overvalue in FX and asset markets… [Read More...]
Retail sales rose more than forecast in May, showing consumer spending will help boost economic growth in the second quarter. The 0.5 percent increase in purchases followed a 1.3 percent jump the previous month that was the biggest gain in a year, Commerce Department figures showed Tuesday in Washington. The median forecast of 81 economists surveyed by Bloomberg projected a 0.3 percent advance. Excluding purchases of autos and gasoline, sales climbed 0.3 percent. Steady gains in consumption will help the economy accelerate from a soft patch at the start of the year, bolstering forecasts by Federal Reserve officials that the slowdown would prove temporary. A pickup in wages generated by continued increases in employment will help ensure households remain a mainstay of the economic expansion. “This is a very strong spring quarter … [Read More...]
The Reserve Bank of Australia has cut rates and the country’s Treasurer Scott Morrison has delivered a fiscally responsible budget. The RBA was not just rattled by last week’s inflation print but clearly sees some potential for further such downside which could only be potentially stemmed using expansionary monetary policy. [Read More...]
Japanese Prime Minister Shinzo Abe and French President Francois Hollande agreed that sudden moves in foreign exchange rates were undesirable, media reports said, as the yen rose to 18-month highs against the dollar. The two leaders, after a meeting late on Monday in Paris, also agreed that the Group of Seven (G7) countries should be “flexible” in their fiscal spending policies to deal with increasing uncertainty in the global economy, Jiji and Kyodo agencies reported. The G7 leaders are due to meet in Ise-Shima, Japan on May 26-27. The yen rose to 18-month highs against the dollar after the BOJ kept monetary policy steady last week, defying market expectations that it would expand stimulus to protect Japan’s fragile economic recovery. via Reuters [Read More...]
The UK’s landmark “Brexit” referendum is fast approaching and while the “leave” camp may have seen its fortunes decline in recent polls frustration with the European Union remains high. This of course is not only the case in Britain. According to CNBC Denmark the Czech Republic and Poland could also head towards a departure from the union. “The main concern is that an unexpected [Brexit] could lead to similar initiatives in other member states” said Teneo Intelligence VP Antonio Barroso in a report this week. Recent UK surveys put support for a Brexit at around 40%. [Read More...]
Employers added more workers in February than projected but wages unexpectedly declined, dashing hopes that reduced slack in the labor market was starting to benefit all Americans. The 242,000 gain followed a 172,000 rise in January that was larger than previously estimated, a Labor Department report showed Friday. The jobless rate held at 4.9 percent as people entered the labor force and found work. Average hourly earnings dropped, the first monthly decline in more than a year. A job market in good health will reinforce job security and encourage Americans to spend, buffering the U.S. from the ill-effects of global economic weakness. While employment is robust, and will play a role in deciding the race for the White House, bigger wage gains are needed help move inflation closer … [Read More...]
A tentative improvement in risk sentiment helped European equity markets higher by midsession on Tuesday. [Read More...]
SOURCE: MarketPulse – Read entire story here.
Employment was virtually unchanged in January (-5,700 or 0.0%) and the unemployment rate edged up to 7.2%. In the 12 months to January, employment increased by 0.7% (+126,000). Over the same period, the unemployment rate rose from 6.6% to 7.2%, as the labour force grew at a faster pace than employment. There was little change in both full-time and part-time employment in January. However, compared with 12 months earlier, full-time work increased by 172,000 (+1.2%) while part time was little changed. Over the same period, the number of hours worked rose by 1.2%. In January, there were fewer employed people aged 55 and older. At the same time, employment increased among women aged 25 to 54. There were fewer people working in Alberta, Manitoba as well as Newfoundland … [Read More...]