Economy

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Market analysts are now turning their attention to the upcoming US Manufacturing and Services PMIs as trading resumes after the Thanksgiving holiday. There is a consensus that the Manufacturing index might show contraction with a prediction of 49.8, while Services are expected to experience a slight dip to 50.3. These projections come as market participants return in reduced numbers due to shortened trading hours.In technical analysis, the GBP/USD pair shows that resistance is forming just below the recent highs, around the level of 1.2575. Meanwhile, support is taking shape near the recent lows in the vicinity of 1.2400. Investors and traders are closely monitoring these levels as they could indicate future movements in the currency pair’s value.As global markets await the release of US PMI data, the strength of the pound against the dollar serves as an indicator of investor sentiment towards the economic outlook of both nations. The positive UK data has provided some optimism about the resilience of the British economy amid global economic challenges.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Investors’ sentiments have been lifted by news from yesterday that China is taking measures to alleviate its property sector woes. The country has facilitated financial access for major developers such as Country Garden Holdings Co., Sino-Ocean Group, and CIFI Holdings. This move has sparked a positive reaction in the markets, with investors now looking forward to the upcoming S&P Global PMI data, which is expected to influence gold trading strategies.From a technical standpoint, gold’s outlook appears favorable. Key indicators suggest that there is sustained buyer support above the critical 100-hour Exponential Moving Average (EMA), and the Relative Strength Index (RSI) remains bullish, positioned above 50. These factors contribute to an optimistic sentiment among traders regarding the precious metal’s trajectory.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

TOKYO (Reuters) -Japan’s core consumer price growth picked up slightly in October, after easing the previous month, reinforcing investors’ views that stubborn inflation may push the Bank of Japan (BOJ) to roll back monetary stimulus before long.The nationwide core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.9% year-on-year in October, government data showed on Friday, against 3.0% expected by economists in a Reuters poll.Core inflation had slowed to 2.8% in September from 3.1% in August, the first time it was below 3% since August 2022.The rate of inflation has hovered above the central bank’s 2% inflation target for 19 consecutive months, but the BOJ has insisted the cost pressures are largely driven by higher global commodity prices and the weaker yen, not a sign of sustainable price gains led by stronger domestic demand and wage growth.”I expect the central bank to end negative interest rates and remove yield control as early as in April when they see the results of labour-management wages talks and the ongoing move among companies towards passing on costs,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.The narrower gauge of inflation, or core-core index, which strips away fresh food and fuel costs, rose 4.0% in the year to October, slowing from a 4.2% gain in September but staying above 4.0% for a seventh straight month.Many analysts see the yield control policy as becoming obsolete as the BOJ has made the 10-year yield target more and more flexible, sending the JGB yield closer towards 1%.With inflationary pressures appearing to be more stubborn than expected, speculation is growing that the BOJ may soon have to ditch its negative interest rate policy as well as yield curve control, which sets a 0% cap for the 10-year bond yield.The BOJ has brushed aside such speculation, saying that the current global cost-push inflation is not sustainable. It says healthy wage growth is needed to spur domestic demand and prices in a stable and sustainable manner.The latest inflation data is among indicators the BOJ will eye at its two-day policy meeting ending on Dec. 19, its last scheduled review this year.The government for its part is pressuring companies to raise wages to help employees overcome higher living costs. More

LONDON (Reuters) – British consumers have turned more optimistic about the outlook for the economy and their personal finances this month but their mood remains a long way off pre-COVID levels, market research firm GfK said on Friday.Despite lingering cost-of-living pressures, GfK’s headline consumer confidence index was stronger than anticipated in November, increasing to -24 from October’s three-month low of -30.November’s reading was above the -28 forecast in a Reuters poll of economists, and follows a sharp fall the month before.The six-point increase was the biggest month-on-month improvement since March to April although Friday’s reading was still much weaker than just before the coronavirus pandemic hit Britain.”Recent ups and downs in confidence have underlined the nation’s topsy-turvy economic mood as encouraging news about falling inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills,” Joe Staton, GfK’s client strategy director, said.Britain’s economy has suffered stagnating growth but GfK’s measure of how consumers view the economy in the 12 months ahead increased to -26 from -32 in October while feelings about the outlook for their personal finances rose by five points to -3.The Bank of England, which has held interest rates at 5.25% at its last two meetings after 14 consecutive increases, is closely monitoring upside risks to inflation. Financial markets are almost certain rates have peaked, but Governor Andrew Bailey last week said it was “too early” to think about rate cuts.While British consumer price inflation fell significantly from a 41-year high of 11.1% just over a year ago to 4.6% in October, households are still grappling with the highest inflation rate among major rich economies.Britain’s official budget forecasters warned on Wednesday inflation would be more persistent than expected and living standards would be 3.5% lower in the 2024/25 financial year than before the pandemic, despite finance minister Jeremy Hunt’s measures to boost the country’s economy. Official data published last week showed shoppers spent less in October as finances remain stretched. However, Staton noted an increase in the sub-index of shoppers’ willingness to make expensive purchases, which he said would be welcome news for retailers in the run up to the crucial Christmas period.GfK conducted its poll of 2,000 people from Nov. 1 to Nov. 14. More

QUITO (Reuters) -Business heir and former legislator Daniel Noboa was sworn in as Ecuador’s new president on Thursday, pledging to reduce violence and create jobs via urgent legislative reforms.Noboa, 35, won an October run-off in the South American country, which is facing deep economic challenges that have pushed thousands to migrate and spiking violence that reached an unprecedented crescendo with the murder of presidential candidate Fernando Villavicencio. “To fight violence we must fight unemployment. The country needs jobs and to create them I will send urgent reforms to the assembly, which should be treated with responsibility and by putting the country first,” Noboa said during his maiden speech in front of National Assembly lawmakers in Quito.Noboa will serve as president for just 17 months, finishing predecessor Guillermo Lasso’s term after Lasso brought forward elections to avoid likely impeachment. It will be hard for Noboa to effectively tackle Ecuador’s significant challenges during his truncated term, analysts have said, though he can run for re-election in 2025.”We cannot keep repeating the same policies of the past expecting to have a different result,” Noboa said.”I invite everyone to work together against the common enemies of violence and misery” he added. “The job is hard and difficult and the days are few.”Noboa is expected to declare a state of emergency, which will allow him to propose laws to the assembly with 30-day approval timelines.States of emergency were frequently used by Lasso to try and tackle violence, to little effect.Besides job creation reform, which could include provisions to incentivize hiring, especially of young people, and lower value added tax on construction materials, a second reform focused on the electricity sector is also expected.Ecuador is conducting planned power cuts because the El Nino weather phenomena has caused drought, sapping hydro-electric plants of water and forcing the country to import energy.DEBT AND SECURITY Though most of Noboa’s cabinet was sworn in later on Thursday, the young president did not appoint a minister of economy and finance, leaving the position vacant. Noboa initially said he would appoint Sariha Moya to the post but later put her in charge of Ecuador’s planning secretariat.Noboa has already toured the U.S. and Europe to sound out investors and lenders, but has warned he will balance meeting foreign debt obligations – totaling some $47.4 billion – with the needs of Ecuadoreans.He has also promised a new intelligence unit, to supply tactical weapons to security forces and to house the most dangerous criminals on prison boats.Violent deaths in Ecuador could exceed 7,000 this year, a homicide rate of 35 per 100,000 people, according to a recent report from the Ecuadorean Organized Crime Observatory.Last week, Noboa agreed to a legislative coalition with the conservative Social Christian Party and Citizens’ Revolution, the party of leftist ex-President Rafael Correa, which is likely to help push his reforms through.Ecuador expects economic growth of 1.5% this year and 0.8% in 2024. Informal work accounts for more than 50% of the economy, according to official data.Noboa is the son of Alvaro Noboa, a powerful banana baron billionaire who repeatedly failed to win Ecuador’s presidency.The younger Noboa is the father of two small children, a daughter from his first marriage and a son with his current wife. First lady Lavinia Valbonesi, 25, a social media influencer and nutritionist, is currently pregnant with a second son. More

Stats NZ provided a detailed breakdown of the quarter’s retail activity, highlighting several areas of growth that bolstered the sector against weaker spots. Notably, clothing sales saw a significant uptick of 4%, and food services enjoyed an increase of 1.9%. Supermarket and grocery store revenues also rose by 1.7%, with hardware, building, and garden supplies registering a 2.6% gain in value terms for September, reflecting seasonally adjusted improvements.Contrasting these positive figures were the motor vehicle and parts retailers, which experienced a 2.9% dip in sales volume. Fuel retailing also faced challenges with declining volumes but managed to increase in value by 7% due to price fluctuations. These sectors’ performances had a dampening effect on the overall retail sales figures when excluding automobiles and transport-related expenses. In the previous quarter, these categories each fell 3.4% in volume terms but displayed mixed results in value adjustments.The currency market’s reaction to this mixed bag of retail data was subdued, with the New Zealand dollar trading near $0.6050 against its US counterpart following the release of the statistics. The resilience seen in certain consumer spending areas suggests underlying strength in New Zealand’s domestic economy, even as some sectors struggle against headwinds.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

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