The Pulse
- In October equity and bond markets were both a little weaker as investors worried about higher US interest rates and the outcome of the US elections.
- Crude oil prices were about 3% weaker as oil producer nations failed to agree to production cuts.
- Chinese economic data was relatively good helped by infrastructure and housing construction activity.
- The US economy continues to grow moderately with some evidence that wages growth is picking up.
- The Eurozone economy continues to grow in line with long term trend rates and business sentiment in both the manufacturing and services sectors has improved.
- Australia’s economy is still somewhat mixed with softness in retail spending and low inflation but the recent lift in iron ore and coal prices should help provide support into 2017.
Global economies
In another relatively uneventful month for economic data, investor attention was directed at rising interest rates and bond yields and election uncertainty in the United States. Economic indicators were on the whole relatively good showing that the global economy continues to expand at a moderating pace.
US
In the United States, the initial estimate of third quarter GDP growth came in ahead of expectations showing annualised growth of 2.9%.
Europe
In Europe, economic indicators have been relatively good recently. GDP growth in the third quarter was as expected, at 1.6% year-on-year. However, purchasing manager indices for both the manufacturing and services sectors were better than expected.
China
In China, the economy grew at an annual rate of 6.7% in the third quarter, which was in line with expectations.
Asia Region
Japanese economic data continues to show an economy gripped by price deflation and consumers who are reluctant to spend. Household spending fell 2.1% over the past year and core inflation is running at -0.5% nationwide, despite the unemployment rate falling from 3.1% in August to 3.0% in September.
Australia
In Australia, employment fell for the second consecutive month in September and the trend continues to show weakness in full-time employment partly offset by strength in part-time jobs.
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