Succinct summation of week’s events:
Positives:
1) The Sept unemployment rate falls to 7.8%, the lowest since Jan ’09 as 873k jobs are added according to the household survey, exceeding the labor force increase of 418k. Avg hourly earnings up .3% m/o/m and avg work week up .1.
2) Initial Claims total 367k, below 370k for 2nd week after two previous above 380k.
3) Vehicle sales in Sept rise to best since Mar ’08.
4) ISM mfr’g and services both surprisingly rise from Aug.
5) Greek stocks end week up 12% and bond maturing 2/24/23 at .30 on euro, the highest since the debt exchange, due to growing sense Greece will get cut some slack and possible bank merger.
6) Spanish 2 yr falls almost 40 bps, are we getting closer to official help as Draghi is ready to spend some money?
7) Our largest trading partner Canada reports blowout payroll jump of 52.1k vs est of 10k.
8) RBA cuts rates 25 bps as they have flexibility to move.
Negatives:
1) Private sector adds only 104k jobs in Sept according to establishment survey, 26k below estimates and the U6 unemployment rate remains unchanged at 14.7%, reflecting the influence of part timers on the 7.8% print.
2) Sept retail comps very mixed.
3) China’s mfr’g PMI rises to 49.8 from 49.2 but below 50 for 2nd month.
4) China’s PMI services index falls to 53.7 from 56.3, the lowest in its short 19 month history.
5) South Korea’s mfr’g PMI falls to early ’09 low at 45.7 from 47.5.
6) India’s mfr’g PMI holds at 52.8 but at 9 month low.
7) Taiwan’s mfr’g PMI drops to lowest since Nov at 45.6 v 46.1.
8) Japan’s Tankan mfr’g index falls to -3 from -1,
9) UK PMI below 50 for 5th month at 48.4 v 49.6.
10) Euro zone PMI holds at 46.1, below 50 for a 14th straight month.
11) Australia’s trade deficit widens to most since Mar ’08 with merchandise exports to China falling to 6 month low.
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