Economy

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With the Coronavirus fears crashing global markets and economies Germany is weighing up easing counter-cyclical capital buffers for banks. Deutsche Bank shares have dropped to fresh multi-decade lows as default probability rises.

With the shockwaves from China's COVID-19 gift to the world the Japanese council on investment for the future has aims to break supply chain dependence on China with drastic measures.

Japan's PMIs in February all fell into contraction, much lower than already anemic expectations. Japanese manufacturing, service and composite PMI® all fell under 50. The business outlook remains pessimistic.

The European was much weaker at the end of 2019 than many believed. Eurozone December construction output -3.1% vs prior +0.7% m/m and -3.7% y/y from the prior +1.4%. Significantly this is before the Coronavirus outbreak

The US Labor Department reported higher jobs on Friday for January as private payrolls surged. Non farm payrolls grew 225k. Unemployment ticked higehr to 3.6% Earlier private payroll company ADP reports that US jobs grew 291,000 in January, the highest since 2015.

Private payroll company ADP reports that US jobs grew 291,000 in January, the highest since 2015. The US Labor Department will report It's jobs report on Friday. In December they reported a lower than expected 145k v 160k non farm payroll additions after the US lost 12,000 manufacturing jobs. 

Real gross domestic product (GDP) increased 2.1% in the fourth quarter of 2019, “advance” estimates by the Bureau of Economic Analysis. Personal consumption was stronger but drop in business investment hinder.

US pending home sales fell a sharp -4.9% v +0.5% estimates, in contrast to December existing home sales rising to 5.54M v 5.43M expected. Mortgage data has been volatile but stronger in late 2019 flowing onto housing as the stockmarket hit all time highs.

US existing home sales rose to 5.54M v 5.43M expected and the prior 5.35M, up +3.6%% v +1.5% expected. Mortgage data has been volatile but stronger in late 2019 flowing onto housing as the stockmarket hit all time highs.

US MBA mortgage applications for the week ending 17 January 2020 were down 1.2% after last week's huge 30.2% pump. Mortgage rates were steady under  4% fueling the activity.

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