Swiss manufacturing activity declined more than expected for the third month in line, according to industry data. Purchasing managers' index lost 2.1 points on a seasonally adjusted basis to 44.8 in November as compared with 46.9 in October, reported Swiss SVME, the purchasing manager's association, and Credit Suisse.
Use of the ECB overnight deposit achieved a new high for 2011 after global central banks took a coordinated action to ease cost of USD borrowings. The deposit level reached EUR 304.42 billion on Wednesday up from EUR 297.112 billion on Tuesday. Banks borrowed EUR 4.638 billion from the overnight facility on Wednesday as compared with EUR 2.705 billion on Tuesday, ECB reported.
Copper prices are highly dependent on China consumption and market deficit. Recent fall in China's PMI led to a decrease in copper prices. LME copper currently is traded at $8000/tonne falling by more than 20% since the beginning of 2011. However, the expected 250,000 tonnes copper deficit in 2012 may stimulate the growth of prices, however in case the metal's consumption also decreases, the deficit
European manufacturing activity decreased at the fastest speed in the last 28 months. The PMI tumbled from 47.1 in October to 46.4 in November. Analysts expected the indicator will be unchanged for the period. All euro-zone countries experienced a fall that signals spreading downturn, said Chris Williamson, Markit chief economist.
On Wednesday Senate Republicans came up with their proposal of payroll tax cut, significantly differing from that offered by Senate democrats. The Republicans propose to prolong tax cut by one year and keep rates at 4.2% on salaries below $106,800 instead of 6.2%. In contrast, Senate democrats earlier proposed further tax reduction to 3.1% next year. Both parties also cannot agree
US dollar was perceived to a the safe haven in November as spreading European sovereign debt crisis was increasing European bond yields meanwhile pushing down stock and commodity returns. In November US dollar gained 2.9% against Euro as investors hold their money in dollar nominated assets. Nevertheless, the greenback still is 1% down compared on yearly basis.
European stocks are traded mainly lower in Thursday morning giving back exorbitant gains caused by yesterday's action taken by global central banks. The Stoxx Europe 600 index lost 0.2% to 239.46, the German DAX 30 was down by 0.4% to 6,062.69 and the French CAC 40 index tumbled by 0.4% to 3,141.94. Meanwhile, the FTSE 100 index gained 0.2% to 5,517.75.
Gold futures are steady near two-week high after rapid yesterday's increase caused by news about coordinated action of central banks to inject liquidity in financial system. On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were traded at USD1,748.95 a troy ounce at the European morning trade, edging down 0.08% since opening.
Switzerland's GDP expanded in compliance with analysts' forecasts in Q3, according to official data. The country's GDP added 0.2% on a seasonally adjusted basis in Q3 compared with 0.4% growth in Q2. The economy of the country grew by 1.3% in Q2 at annual rate exceeding the expected 1.8%. The growth was mostly stimulated by increase in consumption and investments in construction. USD/CHF was traded
France and Spain are going to offer bonds worth €8.25 bn ($11 bn) in today's auction in order to reinforce euro zone's fire powers against contagion. Spain is planning to sell notes valued at €3.75 bn while France is going to offer bonds at €4.5 bn. The bond auction will examine investor confidence as Fed, ECB and four more central banks eased cost of dollar
On Thursday Japanese Yen weakened against most of its major counterparts as Asian shares rallied stimulating demand for safe assets. The yen reached almost 2-week low against Euro on Fed's announcement that it has lowered dollar swap rates to support Europe. Japanese domestic currency hit ВҐ104.60 from ВҐ104.37 on New York trade yesterday. The pair currently is trading at ВҐ104.45.
Australian national currency tumbled from almost 2-week high on government reports indicating building permits plunged in October while private consumption reduced. Building licenses declined by 10.7% in October on monthly basis. Aussie weakened against most of its 16 major peers giving up 0.6% against US dollar, reaching $1.0226 in Sydney morning trade. The pair currently is trading at $1.020.
John Ryding, RDQ Economics LLC's chief economist told that Fed's action is dealing with the results of crisis rather than causes. In his opinion easing borrowing costs not only demonstrate central banks' power to shock global markets but also depict their limited ability to tackle debt crisis. Ryding, former BoE economist suggested that stabilization of debt situation requires ECB bond purchases; however the bank so
US shares advanced rapidly on Wednesday as Federal Reserve and five major banks approved reducing dollar swap rate measures to aid Europe. Major market indices experienced biggest one day gains since 2009. S&P 500 Index gained 4.3% reaching 1,246.96, Dow Jones Industrial Average and Nasdaq Composite both jumped 4.2% to 12,045.68 and 2,620.34.
Manufacturing surveys published yesterday showed the industrial production has contracted in November. According to China Federation of Logistics and Planning report production Purchasing Managers' Index dropped to 49.0 of 100 point gauge, declining below October reading of 50.4.The estimate earlier predicted by Dow Jones Newswires was 49.7. IHS Global's analysts claim the index as alarming indicating business environment deterioration.
Asian shares surged on Thursday following global markets trends as several major central banks cut dollar borrowing costs and relieved monetary provisions in China. Shanghai Composite Index jumped 3.5%, Hong Kong's Hang Seng Index rocketed 5.9%. Japan's Nikkei Stock Average added 2.2%, Australia's S&P/ASX 200 index gained 2.6% while South Korea's Kospi edged up 4.2%.
Unemployment rate in the euro-zone increases unexpectedly for the second month. The rate increased to 10.3% on a seasonally adjusted basis in October compared with 10.2% in September, according to Eurostat. Experts predicted the euro-zone's unemployment rate remain unchanged at 10.2%. The number of unemployed in the euro-zone approached 23.55 million people in October.
The euro moved higher against USD during the Asian trade due to central banks announcement about taking coordinated action to ease dollar-borrowing costs in the euro-zone. Restored investors' confidence pushed the euro to $1.3459 from $1.3446 in late American trading. The dollar index declined to 78.273 from 78.345.
Crude oil futures experienced essential increase on Wednesday despite release of report indicating US crude oil supplies rose more than expected during last week. The move was mainly caused by news on coordinated action by global central banks aimed at injecting liquidity into financial system. On the New York Mercantile Exchange, crude oil futures for delivery in January were traded at $101.44 a barrel at the
Private sector employment in the US increased by 206,000 from October to November on a seasonally adjusted basis, according to the ADP National Employment Report released on Wednesday. The expected increase was 130,000. Moreover, the manufacturing activity in Chicago rose to 62.6 in November being the seven-month high, exceeding the forecast of 58.6.
Natural gas futures decreased rapidly on Wednesday as unusually warm temperatures impacted investors. Investors are also looking forward to U.S. Energy Information Administration's weekly report on natural gas inventories due on Thursday. On the New York Mercantile Exchange, natural gas futures for January delivery dropped to $3.561 per million British thermal units at the early U.S. trade, losing 2% since opening.
Commodities tend to respond quickly to fluctuations of stock prices and bond yields. During the recent months commodity prices were extremely volatile despite commodities being considered as the safe investment option. Experts claim the reason for instability in the market is the demand for commodities as it is strong enough to prevent further price decrease but cannot sustain the prices at high level.
Libyan oil production was severely impacted by civil war occurred earlier in 2011. Before the unrest Libya, the country with world eighth largest oil reserves, has been producing more than 1.6 million barrels a day. At the moment Libya has restarted its oil production that stands at the level of 750,000 barrels a day, reported Libya's National Oil Corporation.
After global central banks announced they would take a coordinated action in order to boost liquidity in the financial system bond yields across Europe declined. Yield on 10-year bonds in Italy declined by 6 basis points to 7.03%, those in Spain fell by 9 basis points to 6.30% and those in Belgium decreased by 24 basis points to 5.12%.