Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
Asian stocks fall, dollar lifted after Yellen's rate hike comments (Reuters) Asian stocks slipped and the dollar advanced on Thursday after hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month. Spreadbetters saw Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI opening down in line with Asian stocks. Australian shares fell 0.6 percent and South Korea's Kospi .KS11 shed 1%. Shares in Hong Kong, Malaysia and Singapore also declined. Shanghai shares .SSEC bucked the trend and were last up 0.5%, brushing aside a Caixin/Markit Purchasing Managers' Index showing China's services sector growth cooling in November. Weak indicators often stir hopes of government stimulus, providing a burst of support for Chinese shares. Japan's Nikkei .N225 eased from 3-month highs and stood nearly flat, bound in narrow range as a wait-and-see mood prevailed ahead of the European Central Bank's policy decision due later in the session.
Massive El Niño sweeping globe is now the biggest ever recorded (New Scientist) This article says that the current extreme El Niño is now "the strongest ever recorded", smashing the previous record from 1997-8. Already wreaking havoc on weather around the world, the new figures mean those effects will probably get worse. Climate change could be to blame and is known to be making the extreme impacts of El Niño on weather more likely. Econintersect: This article is making generalized statements that are still subject to considerable uncertainty, which is evident in new data reported each week. The graph below is indeed correct but it is not the only data that bears on the progress of this El Nino. For up to date information read the weekly feature every Tuesday morning by GEI weather and climate economist, Sig Silber.
Private sector debt threatens EM governments, says Fitch (Financial Times) Private-sector debt in developing countries is growing so quickly that it threatens the creditworthiness of domestic governments according to new research, underlining concerns that an emerging market slowdown could yet worsen next year.
Watch for U.S. recession, zero interest rates in China next year, Citi says (Reuters) Citigroup economists took out their scatter gun and shot some 2016 targets. As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of a U.S. recession will reach 65%. They say to watch for a flattening yield curve as the recession approaches. In China, deflationary pressures and downside risks to growth will force Beijing to loosen fiscal policy, let the yuan depreciate and perhaps become the first major emerging market economy to cut interest rates to zero
The other mass shooting that happened today in the United States (The Washington Post) While the world focused on the shootings in Sa Berenadino CA Wednesday, few noticed that a gunman in Savannah, Ga., shot four people early Wednesday, killing a woman and injuring three men. When mass shootings occur en masse some become ho hum events. In Savanah, detectives believe at least two shooters were involved and have not yet publicly identified a motive in the shooting. See AJC.com.
Weak eurozone inflation sets stage for ECB stimulus (The Business Times) Eurozone (EZ) inflation came in lower than expected in November, official data showed on Wednesday, giving further encouragement to the European Central Bank (ECB) to pump up its stimulus to boost the economy. ECB president Mario Draghi is widely expected to ramp up the central bank's contested bond-buying program on Thursday given low inflation levels across the 19 countries that share the euro. The EU's Eurostat statistics agency said inflation was unchanged in November at a weak 0.1%, lower than analysts' forecast of 0.2% inflation for the period, and far from the ECB's official target of 2%.
Eurozone jobless rate falls in October (The Business Times) Eurozone unemployment slipped to its lowest level for nearly four years in October, official data showed on Tuesday, beating analyst expectations and confirming a slow recovery in Europe's job market. The European Union's Eurostat agency said unemployment in the 19-country single currency bloc fell to 10.7% in October from 10.8% in September, reaching the lowest level since Jan 2012.
Migrant crisis: Greece denies Schengen threat from EU (BBC News) Greece has admitted it has come under intense pressure over migration, but has strongly denied that any official attempt has been made to suspend it from the Schengen passport-free zone. The government complained of untrue reports from "European circles" pushing a hostile agenda about Greece. More than 740,000 people have arrived on the shores of Greece this year.
Saudis to Propose Conditional OPEC Cuts in 2016, EI Reports (Bloomberg) Saudi Arabia, the world's largest crude exporter, may propose an eventual OPEC (Organization of Oil Producing Countries) production cut of 1 million barrels of oil a day that may take affect in 2016, Energy Intelligence reported Thursday, citing a group delegate it didn't identify. No action is expected at the OPEC meeting thei Friday.
Euro's Loss Being Yen's Gain May Be Headache for BOJ: Analysis (Bloomberg) The Bank of Japan (BoJ) will largely be a bystander this week while the market focuses on the European Central Bank meeting, congressional testimony by U.S. Federal Reserve Chair Janet Yellen and the U.S. jobs report. But further aggressive easing by the ECB may have an undesired effect on the Japanese yen's trade weighted index (TWI). The yen strengthening against the euro will be a headwind for Japan exports to Europe.
New growth drivers key to success of China's reforms: Moody's (Xinhuanet) Finding new drivers of economic growth that are less reliant on borrowing will be key to the success of China's reforms, according to Moody's. China's old growth model is no longer sustainable as it has experienced rising debt-to-GDP ratios, falling capital productivity and persistent producer price deflation.
China Said to Peg Local Debt Swap Program at 15 Trillion Yuan (Bloomberg) China plans to expand the size of its program for addressing high-cost local government debt to about 15 trillion yuan ($2.4 trillion). The initiative to swap high-yielding local debt into cheaper municipal bonds is set to run through the end of 2017, This will be a huge increase from the 4 trillion yuan program previously reported. Analysts say this indicates local government finances are "under heavy pressure".
PMI contracts for fifth straight month (Taipei Times) The manufacturing purchasing managers' index (PMI) contracted to 45.1 last month, down from 46 the previous month, indicating a further deterioration in operating conditions for local manufacturers.
Australia's Economy Expands on Mining Exports (Nasdaq.com) Australia's resource-rich economy expanded strongly in the third quarter on the back of a surge in commodity exports, government data Wednesday showed. Gross domestic product rose by 0.9% in the third quarter from the second, and by 2.5% from a year earlier, the Australian Bureau of Statistics said. Both figures were in line with economist forecasts.
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