China industrial production rose 3.5% yoy in October, above expectation of 3.0% yoy. Retail sales rose 4.9% yoy, versus expectation of 3.8% yoy. Fixed asset investment rose 6.1% ytd yoy, versus expectation of 6.2%.
“The national economy was generally stable and maintained the trend of recovery,” the NBS said in a statement. “However, we must be aware that the international environment is still complicated and severe with many unstable and uncertain factors.”
In a speech with business leaders, BoJ Governor Haruhiko Kuroda said that CPI is likely to “increase moderately in positive territory for the time being”, reflecting rise in energy prices. Thereafter, “it is projected to increase gradually to about 1 percent as the output gap turns positive around the middle of next year.”
He noted that economic recovery in Japan has been “somewhat slower than initially expected”. Nevertheless “the mechanism for economic recovery has been maintained.”
Real GDP is expected to recovery to pre-pandemic level in the first half of 2022. Thereafter, “as the resumption of economic activity progresses while public health is being protected, Japan’s economy is expected to follow a growth path that outpaces its potential growth rate, supported by relatively high growth in overseas economies and accommodative financial conditions.”
Japan GDP contracted -0.8% qoq in Q3, much worse than expectation of -0.2% qoq. In annualized term, GDP dropped -3.0% qoq, much worse than expectation of -0.8%.
Capital expenditure dropped -0.8% qoq, versus expectation of -0.6% qoq. External demand rose 0.1% qoq, versus expectation of 0.0% qoq. Private consumption dropped -1.1% qoq, versus expectation of -0.5% qoq. GDP price index dropped -1.1%, slightly better than expectation of -1.2%.
Economy minister Daishiro Yamagiwa said pace of pickup in the economy is weakening and policy support is needed. He also warned of downside risks from the global supply constraints. Prime Minister Fumio Kishida is expected to reveal a stimulus package “worth several tens of trillion yen” later this week on November 19.
Eurozone industrial production dropped -0.2% mom in September, better than expectation of -0.5% mom. Production of capital goods fell by -0.7%, intermediate goods by -0.2%, while production of energy remained stable, durable consumer goods rose by 0.5% and non-durable consumer goods by 1.0%.
EU industrial production dropped -0.5% mom. Among Member States for which data are available, the largest monthly decreases were registered in Denmark (-5.0%), Czechia (-3.2%) and Austria (-3.0%). The highest increases were observed in Estonia (+5.3%), Lithuania (+4.3%) and Belgium (+3.7%).
New Zealand BusinessNZ Performance of Manufacturing Index rose from 51.6 to 54.3 in October. Looking at some details, production rose from 49.8 to 54.0. Employment dropped from 54.2 to 52.1. New orders dropped from 54.1 to 53.9. Finished stocks rose from 50.2 to 54.9. Deliveries rose from 47.9 to 59.9.
BNZ Senior Economist, Doug Steel stated that “even though October’s reading is above average, we’d classify it more in the realm of some recovery from a large hit rather than an indication of outright strength.”
SNB Board member Andrea Maechler said yesterday that “we are still in a territory where the Swiss franc is high.” “The reality is, we continue to have a safe-haven currency,” she said. “Uncertainties remain high, largely because of the COVID crisis which continues to be there.”
“You’ve seen recently there has been quite an appreciation of the Swiss franc,” Maechler said. “Now if you look at the real exchange rate, it’s still higher than 2015. It is something that we do continue to monitor, and we will continue to do so.”
Maechler reiterated that it’s necessary for the central bank to intervene in the markets.
NIESR said it expects UK GDP to grow by 1.1% qoq in Q4, including 0.4% mom growth in October.
Rory Macqueen Principal Economist, Macroeconomic Modelling and Forecasting said: The post-Covid bounce seems to be nearing its end, with hospitality returning to normal growth rates in September after a bumper August. Wholesale and retail activity shrank for a fifth consecutive month and gas distribution for the fourth, which may suggest supply constraints or the unwinding of unusually high demand earlier in the year.
“Overall growth is likely to slow further in the fourth quarter but will benefit if public confidence in keeping Covid-19 under control has enabled a return to growth in consumer-facing services sectors.”
In the Autumn Economic Forecast, European Commission upgraded 2021 GDP growth projection to 5.0% (vs Spring’s forecast of 4.3%). Growth is projected to slow to 4.3% in 2022 (vs 4.4), and then 2.4% in 2023.
HICP inflation is projected to peak at 2.4% in 2021 (vs Spring’s 1.7%), then slow to 2.2% in 2022 (vs prior 1.3%) and then slow to 1.4%.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “This is no time for complacency: we continue to face uncertainty with this virus and there are some risks to contend with. Not least, we need to address bottlenecks in supply chains, as well as surging energy prices which will affect many households and companies across Europe. We also need to closely monitor inflation and adjust our policies if needed.”
In the monthly economic bulletin, ECB said the current phase of higher inflation will “last longer than originally expected”, but it’s “expected to decline in the course of next year”. The factors include sharply risen energy prices, recovering demand outpacing supply, and based effects due to end of VAT cut in Germany. It added, “the influence of all three factors is expected to ease in the course of 2022 or to fall out of the year-on-year inflation calculation”.
Meanwhile, ECB also noted that market-based indicators of longer-term inflation expects reached “new highs”. Five-year forward inflation-linked swap (ILS) rate five years ahead rose above to 2.1%, highest since August 2014. But it also noted that the increase in ILS rate was “pronounced in short and medium-term maturities”. That’s “in line with a transient but more persistent increase in near-term inflation”.
UK GDP grew 0.6% mom in September, slightly above expectation of 0.6% mom. GDP remained -0.6% below its pre-coronavirus level in February 2020. Looking at some details, services grew 0.7% mom. Production dropped -0.4% mom while manufacturing dropped -0.1% mom. Construction rose 1.3% mom.
For Q3 as a whole, GDP grew 1.3% qoq, below expectation of 1.5% qoq. It remains -2.1% below the pre-pandemic level in Q4 2019.
US treasury yields staged a strong rebound overnight following the much stronger than expected CPI data. Five year yield closed up 0.146 at 1.214. The development suggests that pull back from 1.251 has completed after well defending 1.042 support. The stay above rising 55 day EMA also keeps near term outlook bullish. Retest of 1.251 resistance would be seen soon. Firm break there will resume larger up trend from 0.192 to 100% projection of 0.192 to 0.988 from 0.606 at 1.402.
10-year yield also closed up 0.128 at 1.560. While the treat from 1.691 should have completed at 1.415, there is no clear sign of an upside breakout yet. Also, even if 1.691 would be broken, there is another key resistance at 1.765 ahead. Hence, near term outlook is more on the neutral side for now.
Australia employment decreased -46.3k in October, much worse than expectation of 50k rise. At 12.84m, employment level was back below pre-pandemic peak. Full time jobs dropped -40.4k while part-time jobs dropped -5.9k.
Unemployment rate jumped sharply from 4.6% to 5.2%, well above expectation of 4.7%. But participation rate also rose slightly from 64.5% to 64.7%. Monthly hours worked dropped -1m hours.
Bjorn Jarvis, head of labour statistics at the ABS: “The increases in unemployment show that people were preparing to get back to work, and increasingly available and actively looking for work – particularly in New South Wales, Victoria and the Australian Capital Territory. This follows what we have seen towards the end of other major lockdowns, including the one in Victoria late last year.”
“It may seem counterintuitive for unemployment to rise as conditions are about to improve. However, this shows how unusual lockdowns are, compared with other economic shocks, in how they limit being able to work and look for work.”
Japan corporate goods price index rose 8.0% yoy in October, up from September’s 6.4% yoy, well above expectation of 6.9% yoy. That’s also the highest level since January 1981.
Looking at some details, lumber & wood surged 57.0% yoy. Petroleum and cola rose 44.5% yoy. Iron and steel rose 21.8%. Nonferrous metals rose 31.4% yoy. Export price rose 13.7% yoy while import price rose 38.0% yoy.
Gold surges sharply after stronger than expected US CPI data, and finally breaks 1833.79 resistance decisively. The development now affirms the case that corrective pattern from 2074.84 has already finished. Near term outlook will now stays bullish as long as 1822.10 support holds. Next target is 100% projection of 1682.60 to 1833.79 from 1757.84 at 1909.03, which is close to next key resistance level at 1916.30.
Long term outlook is gold remains bullish with 38.2% retracement of 1046.27 to 2074.84 at 1681.92 well defended. Sustained break of 1916.30 would be a signal that gold is ready to resume the long term up trend.
US initial jobless claims dropped -4k to 267k in the week ending November 6, slightly above expectation of 266k. Four-week moving average of initial claims dropped -7k to 278k. Both were lowest since March 14, 2020.
Continuing claims rose 59k to 2160k in the week ending October 30. Four-week moving average of continuing claims dropped -111k to 2245k, lowest since March 21, 2020.
US CPI rose sharply by 0.9% mom in October, well above expectation of 0.5% mom. CPI core rose 0.6% mom, also well above expectation of 0.3% mom.
Over the 12-month period, headline CPI accelerated to 6.2% yoy, up from 5.4% yoy, well above expectation of 5.3% yoy. That’s also the highest level since November 1990.
Annual core CPI surged to 4.6% yoy, up from 4.0% yoy, above expectation of 4.0% yoy. That’s the highest level since August 1991.
In the latest annual report, the German Council of Economic Experts said, “a variety of bottlenecks on the supply side are disrupting global value chains and, combined with the pandemic-related restrictions that are still in place, are holding back growth.”
It forecasts Germany GDP to grow 2.7% in 2021 and 4.6% in 2022. And that subject to “significant risks” including “return of extensive measures to stop the spread of the coronavirus or persistent supply and capacity bottleneck”.
The GCEE projections an inflation rate for Germany of 3.1% in 2021 and then 2.6% in 2022. “Longer-lasting supply-side bottlenecks, higher wage settlements, and rising energy prices pose a risk, however, that what are in fact temporary drivers of prices could lead to persistently higher inflation rates,” it said.
“Fiscal policy needs to normalise following the crisis. Public finances have to be made more sustainable and crisis-resilient again,” says Volker Wieland, member of the GCEE. “The best way for monetary policy to contribute to sustainable economic growth is by maintaining price stability. A normalisation strategy should be published for this purpose.”
According to preliminary reading, ANZ business confidence dropped to from -13.4 to -18.1 in November. Own activity outlook dropped from 21.7 to 15.6. Export intentions ticked down from 8.6 to 8.0. Investment intentions dropped from 13.8 to 11.6. Employment intentions jumped from 10.9 to 16.1. Cost expectations rose from 87.2 to 89.0. Pricing intentions dropped from 65.6 to 64.6. Inflation expectations surged sharply from 3.45 to 4.33.
ANZ said: “Overall, the survey shows an understandable wariness as we move into a COVID-endemic world. The one certainty is that costs are through the roof.”
Australia Westpac Consumer Sentiment rose 0.6% to 105.3 in November, up from 104.6. Looking at some details, the index on economic conditions for the next 12 months improved from 103.2 to 106.6, as reopening of major cities looked to have shored up confidence. Unemployment expectations index dropped notably from 107.1 to 95.3, as more consumers expect unemployment to fall than rise.
Westpac expects RBA to continue with the current AUD 4B per week asset purchases to continue as planned till February, and then reduce it to AUD 2-3B until next most likely review in May. Yet, if RBA assess that the pace of achieving its targets is satisfactory, it could decide to cut taper to ADU 2B per week and Fed, and than end the program altogether by May.
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.
Contact us: contact@actionforex.com
© ActionForex.com © 2025 All rights reserved.
Eurozone exports rose 10.0% yoy in Sep, imports rose 21.6% yoy
Eurozone exports of goods to the rest of the world rose 10.0% yoy to EUR 209.3B in September. Imports rose 21.6% yoy to EUR 202.0B. As a result, Eurozone recorded a EUR 7.3B surplus. Intra-Eurozone trade rose 16.4% yoy to EUR 191.5B.
In seasonally adjusted term, Eurozone exports dropped -0.4% mom to EUR 201.4B. Imports rose 1.5% mom to EUR 195.3%. Trade surplus narrowed to EUR 6.1B. Intra-Eurozone trade rose EUR 0.8B to EUR 182.9B.
Full release here.