World
(Oct 09, 2020) The number of people infected with the coronavirus across the world surpassed 36.6 million, of which at least 1.06 million people have died and 24.98 million have recovered, according to data released by the Johns Hopkins University.
Europe
Coronavirus Surge : Europe’s leaders are stepping up efforts to contain an unrelenting surge in virus cases. The Spanish government declared a state of emergency for the Madrid region. German Chancellor Angela Merkel said Germany is at a tipping point in Europe’s resurgent virus pandemic, signalling the potential for increased economic and human costs heading into the winter.
Italy reported the most cases since March. Cases in the Netherlands rose to a daily record of almost 6,000 and Prime Minister Mark Rutte said additional anti-pandemic measures are “inescapable” if there’s no change in daily virus numbers.
As per ‘European Centre for Disease Prevention and Control,’ covid-19 cases per 100,000 people over the past 14 days.
Euro Area Interest Rate YoY : ECB officials signalled readiness to adjust all of its instruments to ensure that inflation moved towards its aim in a sustained manner. Policymakers also said that the near term price pressures would remain subdued owing to weak demand, lower wage pressures, and the euro appreciation; and that on the basis of the current information, the PEPP envelope would likely have to be used in full to provide the necessary accommodation to offset the downward impact of the pandemic on the path of inflation
(Source : European Central Bank, 10-Year data)
Germany Industrial Production MoM : Industrial production in Germany dropped by 0.2% MoM in August 2020, missing market expectations of a 1.5% rise and following an upwardly revised 1.4% gain a month earlier. This was the first fall in industrial output since April, as production declined for capital goods (-3.6%), consumer goods (-1.3%), and construction (-0.3%). Output in the automotive industry tumbled 12.5%, after an 8.9% increase in July. In contrast, production grew for both intermediate goods (3.3%) and energy (6.7%). Industrial production tumbled 9.6% YoY
(source : Federal Statistical Office, 12-month data)
Germany Balance of Trade (Surplus Declined) MoM : Germany’s trade surplus declined to EUR 12.8 billion in August 2020, the smallest since May, from EUR 16.4 billion in the same month of the previous year, as the coronavirus pandemic hit global demand.
Exports dropped 10.2% due to lower sales to the European Union (-7%) and to third countries (-13.6%), in particular to the UK (-7.3%), the US (-21.1%) and China (-1.1%).
Imports fell at a softer 7.9%, as purchases from the EU dropped 5.4% and those from third countries tumbled 10.5%
(Source : Federal Statistical Office, 12-month data)
Italy Retail Sales MoM : Retail sales in Italy climbed 8.2% from a month earlier in August of 2020, rebounding from an upwardly revised 6% fall in July. Both non-food sales (13.8% vs -9.8% in July) and food sales (1.6% vs -1.1%) rebounded
(source : National Institute of Statistics, 12-month data)
United Kingdom House Price Index : The Halifax house price index in the UK increased 7.3% YoY in September of 2020, well above a 5.2% rise in August, and the strongest gain since mid-2016. On a monthly basis, house prices increased 1.6%. The average price of a property reached £249,870, compared to £245,889 in August.
According to Russell Galley, MD of Halifax, they have received more mortgage applications from both first time buyers than any time since 2008, in the last three months. Increased home working and a desire for more space, with the stamp duty holiday is incentivising the demand pull
(Source : Halifax and Bank of Scotland, 20-years of data)
UK Construction Output Contracts More than Expected : Construction output in the UK shrank by 13.0% YoY in August 2020, following a revised 15.6% tumble in the previous month and compared to market expectations of an 8.8% contraction.
On a monthly basis, construction output grew by 3.0%, the fourth consecutive month of growth in all work since the large fall in construction output in April. Still, the level of output remains 10.8 percent lower than pre-pandemic levels
(Source : Office for National Statistics, 12-months of data)
Asia-Pacific
China Foreign Exchange Reserves : Foreign exchange reserves in China unexpectedly fell to $3.143 trillion in September 2020 from $3.165 trillion in the previous month and below market expectations of $3.169 trillion. It was the first fall in foreign reserves since March, amid a stronger dollar and higher capital inflows. Meanwhile, the value of gold reserves edged down to $118.2 billion at the end of September from $122.62 billion at the end of August
In China, Foreign Exchange Reserves are the foreign assets held or controlled by the country central bank. The reserves are made of gold or a specific currency. They can also be special drawing rights and marketable securities denominated in foreign currencies like treasury bills, government bonds, corporate bonds and equities and foreign currency loans
(Source : People’s Bank of China, values in millions, 12-month data)
India Balance of Trade (Deficit Narrowed) MoM : India’s trade deficit narrowed sharply to USD 2.9 billion in September 2020 from USD 10.9 billion in the same period of the previous year, a preliminary estimate showed. Exports jumped 5.3%driven by sales of engineering goods, petroleum, pharmaceuticals and readymade garments. Meanwhile, imports slumped 19%
(Source : Ministry of Commerce and Industry, values in millions, 12-month data)
Japan Current Account : Japan’s current account surplus shortened modestly to JPY 2,103 billion in August 2020 from JPY 2,135 billion in the same month of the previous year and compared to market expectations of JPY 1,984 billion, owing to the coronavirus pandemic. The goods account posted a JPY 413.2 billion surplus from a JPY 30.4 billion surplus last year, with exports falling 8.8% and imports plunging 12.5%. Meanwhile, the services account gap widened to a JPY 316.6 billion deficit from a JPY 1.5 billion shortfall a year ago, while the primary income surplus dropped to JPY 2,248.7 billion from JPY 2,291.6 billion, whereas the secondary income gap widened to JPY 242.5 billion from JPY 185.5 billion
(Source : Ministry of Finance, Japan, 10-years data)
Australia Interest Rate : The Reserve Bank of Australia left the cash rate unchanged at a record low of 0.25% during its October meeting, as widely expected. Policymakers reiterated their commitment to do what it can to support jobs, incomes, and businesses in Australia.
Its actions, including last month’s decision to expand the Term Funding Facility to around AUD 200 billion at a fixed rate of 25 bps for three years, are keeping funding costs low.
Policymakers reaffirmed its views to maintain highly accommodative policy settings as long as is required and will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3%
(Source : Reserve Bank of Australia, 25-years data)
India Interest Rate : The Reserve Bank of India held its benchmark repo rate at 4% during its October meeting, as widely expected. Policymakers said the decision is consistent with neutral monetary policy stance and is in line with achieving the inflation target of 4% (+/-2) while supporting economic growth
(Source : Reserve Bank of India, 25-years data)
Americas
Dollar Drops to 2-Week Lows, Posts 2nd Weekly Loss : The dollar index fell for the 3rd straight session to settle below 93.1 on Friday, its lowest level since September 20th, and posted a second straight weekly loss of 0.9%. Investors’ risk appetite continued to improve amid hopes of further stimulus in the US after the White House signalled it is again open to negotiations. The Trump administration presented a $1.8 trillion coronavirus plan, an increase from the $1.6 trillion it had previously proposed. The dollar index was also pressured by rising expectations that Democrat Joe Biden will win the US presidency and would likely offer a larger economic package
(Source : Investing.com, 1-month data)
Fiscal-Stimulus Offer at $1.8 Trillion : The White House is reportedly increasing its proposal to $1.8 trillion from the roughly $1.6 trillion Mnuchin previously brought to the table. Pelosi is proposing the $2.2 trillion package the House has already approved
Canada Jobless Rate Drops More than Expected : The unemployment rate in Canada dropped to 9.0% in September of 2020 from 10.2% in the previous month and well below market expectations of 9.7%. The jobless rate fell for the fourth consecutive month, down from an all-time high of 13.7% reached in May as a result of the COVID-19 economic shutdown, but still remaining well above 5.6% reported in February. The economy added 378.2 thousand jobs, beating forecasts of a 156.6 thousand gain, due to both full-time work (+334 thousand) and part-time employment (+44 thousand). The labour force participation rate increased to 65% from 64.6% in the prior month, above consensus of 64.8 percent. The youth unemployment rate declined to 18.9% from 23.1% in August
(Source : Statistics Canada, 12-month data)
Canada Business Confidence Deteriorates : The Ivey PMI for Canada dropped to 54.3 in September of 2020 from 67.8 in the previous month, amid the coronavirus crisis. Employment (53.8 vs 56.1 in August), inventories (44.1 vs 50.9) and supplier deliveries (40.7 vs 51.3) declined. Meantime, price pressures strengthened (60.3 vs 57.6)
(Source : Richard Ivey School of Business, 12-month data)
Brazil New Car Registrations Grow 13.3% MoM : New vehicle registrations in Brazil increased 13.3% MoM to 207.7 units in September 2020, after a 5.1% gain in August, amid the ongoing easing of coronavirus lockdown restrictions. Meantime, exports of vehicles advanced 8.5% to 30.5 thousand
(Source : ANFAVEA Brazil, 12-month data)
Brazil Retail Sales MoM : Brazil’s retail trade increased 3.4% MoM in August 2020, following a downwardly revised 5% rise in the previous month and beating market expectations of a 3.1% gain.
Sales went up for fabrics, clothing & footwear (30.5%); other articles for personal & domestic use (10.4%); furniture & household appliances (4.6%); office, computer & communication equipment and supplies (1.5%) and fuels & lubricants (1.3%).
Sales fell for pharmaceutical, medical, orthopedic, perfumery & cosmetics articles (-1.2%); hypermarkets, supermarkets, food products, beverages & tobacco (-2.2%) and books, newspapers, magazines & stationery (-24.7%).
(Source : Instituto Brasileiro De Geographia Estatistica, 12-month data)
Canada Housing Starts Drop More than Expected MoM : Housing starts in Canada fell by 20.1% MoM to 208,980 units in September of 2020, missing market expectations of 240,000 units, according to Canada Mortgage and Housing Corporation (CMHC)
Housing starts measures the annualised change in the number of new residential buildings that began construction during the reported month. It is an important indicator of strength in the housing sector
(Source : Canada Mortgage and Housing Corporation, 12-month data)
United States Initial Jobless Claims WoW : The number of Americans filling for unemployment benefits rose by 840 thousand in the week ended October 3rd, compared to an upwardly revised 849 thousand in the previous period and above market expectations of 820 thousand. It was the sixth consecutive week with claims stuck at the 800 thousand level, pointing to a slowdown in the labor market recovery
(Source : US Department of Labour, 12-month data)
Commodities
Gold (Oct 09, 2020) : Gold settled at an over two-week high of $1,929 per ounce, posting a second weekly gain of 1.6% helped by a weaker dollar amid renewed optimism over a new US coronavirus relief package. President Trump said that he would like to see an even bigger package than what either the Democrats or Republicans offered. US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks over the aid package, after US President Donald Trump called off negotiations earlier this week.
Silver (Oct 09, 2020) : Silver also settled at an over two-week high of $25.1 per ounce and notched a second weekly rise of about 6%, the largest gain since August. The white-metal was boosted by hopes of further US economic stimulus after news that Democratic and White House negotiators resumed discussions over a sweeping coronavirus relief deal. The white-metal also found support on lingering concerns over a prolonged pandemic crisis after the WHO reported a record one-day increase in global virus cases on Thursday, led by a surge of infections in Europe.
