Economy

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US MBA mortgage applications for the week ending 9 August jumped 21.7% up from a rise of 5.3% the prior week. With mortgage rates back to a three year low refinancing activity surged to a three year high fueling the activity.

The German economy is faltering as we have seen with PMI and sentiment. Brexit and trade wars helped Germany Q2 preliminary GDP come in negative as expected triggering further selling in the German DAX and world stockmarkets already down after a big miss in Chinese growth.

US Consumer price inflation (CPI) for July was 0.3% as expected. YoY was 1.8% up from 1.6%. However real average earnings rose 1.3 y/y from 1.5% last month. The two month core CPI was the most since April 2006.

The US trade deficit in June was $55.2B down from prior month's $55.3 billion. The China and US trade deficit rose to a five month high to -$30.20B.Ironically a day after President Trump threatened to add 10% tariffs 10% on another $300 billion of Chinese imports.

The US Labor Department July jobs report on Fridayas expected showed 165,000 NFP jobs added. In June the US added 193,000 NFP jobs . Unemployment stayed at 3.7% just off the lowest since December 1969. Private payrolls added 148,000 new jobs.

The US manufacturing sector has been weakening. On Wednesday the regional Chicago ISM Manufacturing PMI contracted to the worse level in 4 and a half years to 44.4 in July. It had been expected to be back over 50. Production indicator fell 22% on the month to hit a 10-year low.

Real gross domestic product (GDP) increased 2.1% in the second quarter of 2019, “advance” estimates by the Bureau of Economic Analysis. Core PCE +1.8% vs +2.0% expected. Cconsumption was stronger but drop in business investment and weak housing hinder.

German manufacturing PMI fell to it's lowest point in 7 years as the global trade war and Brexit drama weighed. Job creation slowed to its weakest since April 2015 with reduction in backlogs and lower confidence towards future output. /p>

French manufacturing output fell back into contraction in July, overall France saw modest growth driven by the service sector with an expansion in business activity for the fourth month in a row.

Australia saw stronger than expected full time jobs growth in April but part time jobs fell, with Unemployment at 5.2% and Trend unemployment remaining steady at 5.2%. Participation remains near highest since Dec of 2010.

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