Financial Markets… Better-than-expected U.S. monthly job data boosted global stock markets with European and U.S. equities advancing. In Asia, most region’s benchmarks gained, but Indian stocks tumbled the most as technical error led to a plunge and trading stop on its Nifty Index that briefly wiped out $58 billion in value.
U.S. Treasury prices fell for a second day as an unexpected drop in September’s unemployment rate signaled an improvement in the labor market, damping demand for safe-haven assets. The yield on the benchmark 10-year securities advanced 4 basis points to 1.71%. The Treasury is planning to sell $66 billion in new securities next week.
Spanish government bonds gained for the first time in three days after the European Central Banks reiterated its intention to start bond-buying program as soon as the necessary conditions are met. The country’s benchmark 10-year yield fell 15 basis points to 5.75%, while German 10-year bund yield rose 3 bps to 1.48%.
High-income Economies… US non-farm employment rose by 114,000 in September, following a revised 142,000 gain in August (up from 96,000 initially reported). The US unemployment rate dropped by 0.3 percentage points from 8.1% to 7.8% in September, the lowest since January 2009, partly as employers took on more part-time workers.
Germany’s factory orders dropped by 1.3% (m/m) in August (-4.8% y/y), following 0.3% increase in July, driven mostly by a drop in domestic orders as domestic demand weakened in line with slowing economic growth in Europe’s largest economy.
Spain’s industrial production fell by 3.2% (y/y) in August, a slower pace than the 5.5% drop recorded in July and 6.3% drop in June, but marking the 12th straight months of falling output. Spanish GDP fell 0.4% (q/q) in the second quarter, and likely fell at a “significant pace” in the third quarter according to Spain's central bank last week.
Japan’s index of coincident economic indicators, indicating current economic activity, fell 0.2 point in August from July, but the forward-looking index of leading economic indicators (compiled using data such as the number of job offers and consumer sentiment and a gauge of the economy a few months ahead) rose 0.6 point from July.
Developing Economies… Brazil's consumer price inflation rose to 5.28% in September from 5.24% in August as the central bank is considering a tenth straight interest rate cut next week to stimulate the economy.
Chile's economic activity grew a seasonally adjusted 0.2% in August from July, somewhat slowing pace from a month ago, led by increases in services, mining and retail. Economic activity rose 6.2% (y/y) in August, well above a 4.6 percent expansion in August 2011 from the earlier year.
Malaysia's exports fell 4.5% in August (y/y) (3.7% m/m) on a weak demand from the Eurozone, China and India. Imports in August increased by 2.8% (y/y), but showed a 10.3% m/m decline.
Philippines’ CPI inflation eased to 3.6% y/y in September from 3.8% in August increasing the scope the central bank has to cut rates to support the domestic economy. Taiwan's consumer price inflation rose 2.96% (y/y) in September, down from the 3.42 percent increase recorded in August.
In Russia, the Central Bank decided to keep its refinancing rate unchanged at 8.2% on inflation concerns.
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Prospects Daily: US unemployment rate unexpectedly declines…Brazil’s consumer price inflation rises
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