Australian unemployment rate fell to 6% in May, from 6.1% in the prior month, as the number of employed people increased by 42,000, almost three times more than the forecast. The labour market seems to be very firm relative to insufficient domestic demand and plans of businesses for lowering investment next year, but slowdown in wage growth also supported employment.
The Reserve Bank of New Zealand reduced its interest rate from 3.50% to 3.25%, the first time in last four years, as inflation remains below the bank's target and economic growth slows. The cut put Auckland housing market in danger of increasing prices further, however forecasts assume more rate cuts by the middle of 2016. The Kiwi dipped facing a
Industrial production in UK increased 0.4% in April, beating expectations of 0.1%, as output of oil and gas jumped 8.7%. On the contrary, manufacturing production fell 0.4%б mainly amid a drop of 6% in pharmaceuticals, which accounts for around 9% of total manufacturing output. The decline in manufacturing underlines Britain dependency on consumption and domestic demand to sustain recovery.
Glenn Stevens, the RBA's governor, stated in his speech willingness for further interest rate lowering, supported by disappointing economic data coming from Australia, and encouraged the government to prevent additional spending cuts. Australian economic growth is not satisfactory as the major trading partner, China's economy, is slowing, and the Australian real estate market remains mild.
The optimism of small businesses in US rose in May to 98.3 from the 96.9 in the previous month and came in at the highest level since December. The positive numbers of confidence survey came after firm and healthy May's reports of automobile sales and employment that pointed out the economy was getting stronger after a soft start to the
Oil advanced as the impact of large global oil supply was countered by seasonally higher demand and Brent futures gained 95 cents, trading at $63.64 per barrel, while WTI futures were up 73 cents to $58.57 a barrel. Oil demand is likely to rise in the summer as people use their cars for holidays, while disappointing data coming from China
China is facing deflation risks, as consumer prices increased softly in May, by 1.2% on an annual basis, compared to the increase of 1.5% in April. The producer prices fell 4.6% and extended the decline of about three years. As the inflation is below a half of the official 3% targeted, the People's Bank of China has still room to
German industrial output rose by 0.9% in April, after a decline of 0.4% in the preceding month, while on the annual basis the output increased 1.4% as German manufacturers benefited from both German economic strength and recovery in the Euro zone. Manufacturing production went up 0.7%, while output of investment goods climbed 1.5%. Energy output in turn gained 1.4% and
Japanese GDP increased by 3.9% in the first quarter and the economy grew more than the expected at 2.7%, as companies raised capital investment. Capex rose 2.7%, compared to the previous quarter, strongly beating an estimate of 0.4%. As capital spending is key for economic recovery, the BoJ's stimulus policies seem to be successful.
Exports in China slumped in May 2.8% year-on-year, while inbound shipments fell 18.1%, leaving trade balance surplus of 366.8 billion yuan($59.1b). The slowdown in China's trade was due to dip in growth of investment, while the fall in imports is likely to signal the need for more stimulus to the economy in order to support Chinese domestic demand.
Unemployment claims in US dropped last week by 8,000 to 276,000, while economists expected an increase of 2,000. The US labour market remains firm, as the number of people without jobs was at the lowest level in about 14 years. However, as other data showed, worker productivity dropped 3.1% in Q1 that makes the labour force more expensive.
The Euro gained and continued in its strongest rally since 2009, as a forecast for inflation and economic growth supported yields of government bonds in the Euro Zone and the German 10Y yields increased to the highest level in eight months. After rising 3.2% in the prior two days, the common currency strengthened 0.6% against the Dollar to $1.1341.
Australian stocks lost as worse data of retail sales and balance of trade disappointed and brought worries to the Australian economy. Retail sales in Australia remained unchanged in April, worse than the expected increase of 0.3% and in the meantime, trade balance came in with deficit of $3.89b, the worst since 2008. The S&P/ASX 200 index fell 0.3% on the
Oil futures increased above 1% on the day to get back from the previous drops, supported by a weaker Dollar and the predictions that US crude stockpiles declined for a fourth week. Brent futures advanced 64 cents and traded at $64.36 a barrel, while WTI futures gained 68 cents to $58.71 a barrel. US oil inventories are anticipated to have
The consumer morale in Germany improved to 10.2 in May from 10.1 in the prior month, coming in better than the expected 10.0 and reaching the highest level since October 2001, when the sentiment among consumers in the powerhouse was at 11.0. German strong domestic demand and low inflation rate support improving economic expectations and consumers' willingness to spend.
Asian equities gained as Chinese stocks boosted their rally, while Japanese export data that came in better than expected and weaker Yen supported Japan's shares. The overseas shipments in Japan rose 8% annually, in comparison with the forecast of 6%. The Chinese CSI 300 Index rose above 5,000, the Topix increased 0.7% and the Shanghai Composite Index jumped by 3.4%.
The Euro fell against major currencies following Sunday's announcement that Athens will probably not be able to repay the next IMF payment, due on June 5. During the holiday-softened trading, the Euro was down 0.4%, traded at $1.0967 against the Dollar, while slipped 0.4% and hit 70.73 pence versus the Pound, that was the lowest level since March 12.
Business confidence in Germany slipped slightly in May to 108.5 from April's 108.6, though came in better than the expected drop to 108.4. Solid growth in the business climate remains in place this year; however, the latest reading points out that the upswing in German activity is losing fuel. PMI in Germany fell to a five-month low and German ZEW
Britain's retail sales in the last month rose strongly as sunny weather surged clothing demand. The sales jumped in April 1.2% on a monthly basis, well above the expected increase of 0.4%, as the volume of footwear and clothing sales went up by 5.2%. Spending is supported also by lower UK unemployment and the decrease in prices for consumers.
Industrial activity in Japan, measured by manufacturing PMI, jumped in May to 50.9 from April's 49.9, as new orders and output rose with improvement in domestic and foreign demand. The index measuring output increased to 51.7 from 49.3 in the prior month and new orders boosted to 51.2 from 49.9 in April. The preliminary PMI data are seen as a
Economic sentiment in Germany declined in May to 41.9 and hit a five-month low, while a decrease to 49 from 53.3 in the prior month was expected. Investors are pessimistic after the poor data coming from the powerhouse showed a slowdown in Q1 when German GDP rose 0.3%, after the 0.7% increase in the last three months of 2014.
Britain's consumer prices dropped 0.1% in April on the annual basis and missed the forecast of 0.0%. Negative inflation rate is seen in the UK for the first time since 1960 and is affected mainly by a dip in energy and food prices. With the inflation is well below the BoE's 2% target, the Governor Mark Carney is under a
New Zealand inflation expectations for next two years increased to 1.85 % from the 1.8% expected in February, while year-ahead forecast jumped to 1.32% from the previous 1.11%. Expectations of future inflation can be reflected in real inflation that dampened a pressure on the RBNZ to cut its interest rate. After the release, the Kiwi gained about 0.62% to $0.7436
Average China's property prices fell 6.1% in April on the annul basis, by posting the same decline as in the previous month, while prices calculated on month-on-month remained steady and were up from a 0.1% decrease in the prior month. The Chinese economy seems to be in a slowdown that is likely to keep pressure on the People's Bank of