Forex Trading Library

Daily Market Digest: German unemployment hits record lows

0 455

Germany’s April unemployment rate fell to 6.10%, the lowest since record keeping started in 1992. Australia’s current account deficit points to a better GDP report due for release tomorrow. Canada’s GDP was mixed, falling on a month over month basis, but posting the strong gains in the first quarter.


Today’s Economic events

  • Japan household spending y/y -0.40% vs. -1.30%
  • Japan unemployment rate 3.20% vs. 3.20%
  • Japan preliminary industrial production m/m 0.30% vs. -1.40%
  • New Zealand ANZ business confidence 11.3 vs. 6.2 previously
  • Australia building approvals m/m 3.0% vs. -3.10%
  • Australia current account -20.8 billion vs. -19.3 billion
  • Australia private sector credit m/m 0.50% vs. 0.50%
  • Japan housing starts y/y 9.0% vs. 3.90%
  • German retail sales m/m -0.90% vs. 1.0%
  • France preliminary CPI m/m 0.40% vs. 0.30%
  • Germany unemployment change -11k vs. -4k
  • Germany unemployment rate 6.10%
  • Eurozone M3 money supply y/y 4.60% vs. 5.0%
  • Eurozone private loans y/y 1.50% vs. 1.50%
  • Eurozone flash CPI estimates y/y -0.10% vs. -0.10%; Core CPI y/y 080% vs. 0.80%
  • Eurozone unemployment rate 10.20% vs. 10.20%
  • Canada GDP m/m -0.20% vs. -0.10%
  • US Core PCE price index m/m 0.20% vs. 0.20%
  • US personal spending m/m 1.0% vs. 0.70%; personal income m/m 0.40% vs. 0.40%

Coming up

  • US S&P/CS Composite-20 HPI
  • US Chicago PMI
  • US CB consumer confidence
  • New Zealand overseas trade index

Japan unemployment rate steady at 3.20%

The unemployment rate in Japan was steady at 3.20% for the second month after a brief increase to 3.30% in February. Job availability held near 24-year lows with signs that the labor market remains tight. Japan’s unemployment rate has remained the lone bright spot with inflation and household spending staying weak. Today’s Asian trading session was busy with lots of data coming out of Japan. Housing starts data released earlier today showed the fastest pace of expansion in the 10 months to April, rising 9% on a year over year basis in April and marking the biggest jump since June 2015. Economists were expecting to see a 4.10% growth after an 8.40% increase in March.

Industrial production numbers were also better, rising for the second straight month in April, data from the Ministry of Economy, Trade and Industry showed on Tuesday. Industrial production was up 0.30% on a month over month basis in April but was still slower than the 3.80% gains notched in March. However, the print was better than economist expectations of a 1.50% decline.

Australia Current Account Deficit points to an upside surprise in GDP

Current account data from the Australian Bureau of Statistics released on Tuesday showed a more than expected narrowing in the first three months of the year. Australia’s current account deficit narrowed to 20.8 billion Australian dollars in the first quarter. This was down from 22.6 billion current account deficit in the fourth quarter of 2015. On a seasonally adjusted basis, the current-account deficit decreased by 8% while the deficit on the balance of goods and services was down 26%. ABS expects that the current account data could add as much as 1.10% points to the growth in the quarter ending March 2016.

In a separate report also released today, building approvals in Australia climbed unexpectedly in the month of April, rising 3.0% and extending the 2.90% increase from March. The increase came with an 8.70% jump in private sector dwellings while private sector housing approvals fell 2.30% for the month. On a year over year basis, building consents grew 0.70% in April following a 5.40% decline previously.

Following the current account data, JP Morgan analysts said that they expected to see a higher GDP number due for release tomorrow. Tom Kennedy, JPM economist, notes: “the economy is on track to grow by 0.9% in the quarter, up from an earlier forecast of 0.7%. Most of the upward revision to GDP growth owes to a much larger than forecast contribution from net trade, which is now expected to add a whopping 1.1% percentage points to 1Q growth.”

Germany: Weak retail sales but strong labor market data

Retail sales in Germany fell unexpectedly in the month of April, slipping 0.90%, data from statistics agency Destatis showed on Tuesday. The 0.90% decline was lower than analyst expectations who penciled in a 0.90% increase for the month. German retail sales have now declined for two consecutive months. On a year over year basis, retail sales fared better, rising 2.30% in April more than the 0.60% year over year growth seen in March. The data beat expectations of a 1.70% year over year growth. Food beverages and tobacco sales increased 1.40% while non-food sales grew 2.80% on the month.

Germany’s unemployment data was also released today by BA labor agency, which showed that the jobless claims fell more than expected in May, while pushing German unemployment rate to record lows. Jobless claims fell for eight consecutive months by 11k in April more than the 5k declines expected. The unemployment rate fell to 6.10%, marking the lowest since record keeping started in 1992.

BA head, Frank-Juergen Weise said, “Employment has grown strongly and demand for labor has risen markedly.” However, economists express caution that the inflow of over one-million migrants and asylum seekers could dent the unemployment statistics.

US personal spending rises in April

Personal Consumption Expenditure data released by the Commerce Department today showed that personal spending in the US jumped 1.0% in April following an unchanged print in March. Economists were looking for spending to rise 0.70%. Personal income also increased 0.40% on the month. The PCE Price index was up 0.30% in April marking the strongest reading since May last year while rising 1.10% on a year over year basis. Excluding the volatile components, the core prices increased 0.20% from March, matching expectations on a month over month basis, while rising 1.60% on a year over year basis.

The personal consumption data shows early signs that the US economy may be picking up steam again following a weak start in the first quarter. The increase in spending came with personal income including wages rising.

Leave A Reply

Your email address will not be published.