U.S. Service Sector Growth Reaccelerates More Than Expected In October

Trading 05 nov 2019 Commentaire »

Growth in U.S. service sector activity reaccelerated by more than anticipated in the month of October after a pullback in September, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its non-manufacturing index climbed to 54.7 in October from 52.6 in September, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 53.2.

The bigger than expected increase by the headline index came as the business activity index rebounded to 57.0 in October from 55.2 in September and the new orders index jumped to 55.6 from 53.7.

The employment index also showed a notable increase, surging up to 53.7 in October from 50.4 percent in September and indicating a reacceleration in the pace of job growth in the service sector.

Meanwhile, the report said the prices index slumped to 56.6 in October from 60.0 in September, pointing to a slowdown in the pace of job growth.

Despite the rebound in the pace of service sector growth, Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee, noted "respondents continue to be concerned about tariffs, labor resources and the geopolitical climate."

Last Friday, the ISM released a separate report showing U.S. manufacturing activity continued to contract in the month of October but at a slightly slower pace.

The ISM said its purchasing managers index crept up 48.3 in October from 47.8 in September, although a reading below 50 still indicates a contraction in manufacturing activity. Economists had expected the index to rise to 48.9.

In the previous month, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.


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*U.S. Job Openings Drop To 7.024 Million In September

Trading 05 nov 2019 Commentaire »

U.S. Job Openings Drop To 7.024 Million In September


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*ISM U.S. Non-Manufacturing Index Climbs To 54.7 In October

Trading 05 nov 2019 Commentaire »

ISM U.S. Non-Manufacturing Index Climbs To 54.7 In October


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U.S. Trade Deficit Narrows To $25.5 Billion In September, Matching Estimates

Trading 05 nov 2019 Commentaire »

A report released by the Commerce Department on Tuesday showed the U.S. trade deficit narrowed in the month of September, as the value of imports slumped by more than the value of exports.

The Commerce Department said the trade deficit narrowed to $52.5 billion in September from a revised $55.0 billion in August. The narrower deficit matched economist estimates.

The deficit shrank as the value of imports tumbled by 1.7 percent to $258.4 billion in September after climbing by 0.5 percent to $262.9 billion in August.

The report showed a steep drop in imports of consumer goods, including cell phones and other household goods, as well as notable decreases in imports of capital goods and automotive vehicles, parts, and engines.

Meanwhile, the Commerce Department said the value of exports slid by 0.9 percent to $206.0 billion in September after inching by 0.2 percent to $207.8 billion in August.

Exports of soybeans showed a significant decline along with exports of automotive vehicles, parts, and engines, while exports of civilian aircraft and engines saw notable growth.

The report also said the goods deficit narrowed to $71.7 billion in September from $74.4 billion in August, while the services surplus edged down to $19.3 billion from $19.4 billion.

Andrew Hunter, Senior U.S. Economist at Capital Economics, said the data confirms net trade was broadly neutral for third quarter GDP growth but said he expect trade to become a renewed drag in the fourth quarter.

"The possibility of a trade deal with China could provide a boost to exports, particularly if the Chinese step up purchases of agricultural products," Hunter said.

He added, "That all said, we remain skeptical that a lasting deal will be reached and, in any case, the continued weakness of the global surveys suggests that further weakness in exports lies ahead."


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Malaysia CB Holds Key Rate Unchanged For Third Time

Trading 05 nov 2019 Commentaire »

Malaysia's central bank left its key interest rate unchanged for a third policy session in a row, as it expects growth to remain firm supported by private consumption and inflation to remain modest.

The Monetary Policy Committee of Bank Negara Malaysia decided to leave the overnight policy rate at 3.00 percent. The decision was in line with expectations.

"At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity," the central bank said in a statement.

The previous change in the interest rate was a quarter-point reduction in May, which was the first cut since July 2016.

Overall, growth of the Malaysian economy is expected to be within projections in 2019 and the pace sustained going into 2020, the bank said. The BNM has projected growth to come in the range of 4.3-4.8 percent this year. That said, this projection remains subject to downside risks, mainly stemming from uncertainties in global economic and financial conditions as well as weakness in commodity-related sectors, the BNM added.

Average inflation is expected to remain modest in 2020 mainly due to the lapse in the impact from consumption tax policy changes, the lifting of the domestic retail fuel price ceiling, and measures in place to contain food prices. Core inflation is expected to remain stable, underpinned by the continued expansion in economic activity and in the absence of strong demand pressures.

"With growth set to slow sharply over the next few quarters and inflation likely to remain subdued, we think the central bank will ease policy again early next year," Capital Economics economist Alex Holmes said.

Capital Economics expect another 25 basis points rate cut in the first half of next year.


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U.S. Trade Deficit Narrows In Line With Estimates In September

Trading 05 nov 2019 Commentaire »

A report released by the Commerce Department on Tuesday showed the U.S. trade deficit narrowed in the month of September, as the value of imports slumped by more than the value of exports.

The Commerce Department said the trade deficit narrowed to $52.5 billion in September from a revised $55.0 billion in August. The narrower deficit matched economist estimates.

The deficit shrank as the value of imports tumbled by 1.7 percent to $258.4 billion, while the value of exports slid by 0.9 percent to $206.0 billion.


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*U.S. Trade Deficit Narrows To $52.5 Billion In September

Trading 05 nov 2019 Commentaire »

U.S. Trade Deficit Narrows To $52.5 Billion In September


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*Canadian Trade Deficit Narrows To C$978 Million In September

Trading 05 nov 2019 Commentaire »

Canadian Trade Deficit Narrows To C$978 Million In September


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UK Service Sector Stagnates In October

Trading 05 nov 2019 Commentaire »

The UK service sector showed no change in output in October, while overall private sector activity continued to contract weighed down by construction, survey data from IHS Markit showed Tuesday.

The Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index rose to 50.0 in October from 49.5 in September. However, this was among the lowest seen in the past ten-and-a-half years.

Although the score signaled a slight improvement on September's contraction, business levels were supported by existing contracts as the volume of new work declined further.

New work has decreased seven times so far this year as demand weakened due to Brexit uncertainty. Export orders declined at a near-record pace, unchanged from September. The decrease in new work led to more job losses in the sector, the survey showed.

On the price front, input price inflation remained above the long-run average but slowed to an 18-month low. Charges increased on average, but at a rate little-changed from September's 38-month low.

The 12-month outlook for service sector activity improved to a three-month high as a number of firms expected Brexit to be resolved early next year.

Weighed down by construction, the composite output index came in at 49.5 in October, up from 48.8 in September. A score below 50 indicates contraction.

Manufacturing production fell only fractionally, and service sector activity was unchanged since September.

"The October reading is historically consistent with GDP declining at a quarterly rate of 0.1 percent, similar to the pace of contraction in GDP signaled by the surveys in the third quarter," Chris Williamson, chief business economist at IHS Markit, said.

The big picture is that there is little momentum in the economy, Andrew Wishart, an economist at Capital Economics, said.

The Bank of England will sit on its hands this Thursday, but unless the drag of Brexit uncertainty can be removed in the next few months, interest rates are likely to be reduced, perhaps by 25 bps in the May 2020, Wishart added.

Data from the Society of Motor Manufacturers and Traders showed that UK car registrations declined 6.7 percent in October as economic and political uncertainty continued to weigh on consumer confidence.


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India Services Sector Shrinks For Second Month

Trading 05 nov 2019 Commentaire »

India's services sector activity deteriorated for a second straight month in October, but at a slower pace, amid subdued demand conditions, competitive pressures and a fragile economic situation survey results from IHS Markit showed on Tuesday.

The services Purchasing Managers' Index, or PMI, rose to 49.2 in October from 48.7 in September. Any reading below 50 indicates contraction in the sector. This was the first back-to-back reduction since the second quarter of fiscal year 2017/18, IHS Markit said.

Total sales remained unchanged in October, after contracting in the previous month. Export demand grew at the weakest pace in four months.

Employment level increased for the twenty-sixth straight month in October, albeit at the slowest pace over this period and the backlogs of work rose marginally.

Business confidence was among the weakest seen in the near 14-year survey history, as several businesses fear that challenging economic conditions will persist.

Input price inflation surged to the highest level in one-year in October, and average prices charged rose modestly.

The composite output index fell to 49.6 in October from 49.8 in the previous month. The Indian private sector contracted for a second straight month, reflecting the significant slowdown in the growth of factory output and a further contraction in services activity.

"It's somewhat worrying to see the Indian service sector stuck in contraction, as firms react to muted demand by lowering business activity," Pollyanna de Lima, principal economist at IHS Markit, said.

"Perhaps even more concerning was the downward revision to future expectations, given the possible detrimental impact of subdued business confidence on investment and jobs."


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