Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Only Thing Systematic Is The Destruction Of America - 29th Sep 20
Fractional-Reserve Banking Is The Elephant In The Room - 29th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part I - 29th Sep 20
Stock Market Short-term Reversal - 29th Sep 20
How Trump co-opted the religious right and stacked the courts with conservatives - 29th Sep 20
Which RTX 3080 GPU to BUY and AVOID! Nvidia, Asus, MSI , Palit, Gigabyte, Zotac, MLCC vs POSCAPS - 29th Sep 20
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Global Economy, PMI, Employment Data and Monetary Policy Review

Economics / Economic Statistics May 07, 2011 - 07:50 AM GMT

By: EconGrapher

Economics

Best Financial Markets Analysis ArticleThis week we take a look at the Purchasing Manager Index data for the US and China. Then there's a review of the US employment report, before an overview of the employment data from New Zealand, we then wrap up with a review of some of the key monetary policy decisions over the past week.


1. US PMI
The US recorded some relatively disappointing numbers, with the manufacturing PMI falling to 60.4 from 61.2 and the non-manufacturing PMI falling to 52.8 from 57.3. Sure both numbers were still in positive territory, and both still in the expansionary indicator space. But much of the weakness was in the wrong spots, e.g. things like non-manufacturing PMI falling -11.4 points, and new export orders also falling -5.5 points and business activity -6 points. While the manufacturing index saw negatives in production -5.2 points and -1.6 on new orders. However within the manufacturing PMI, there was a 8.5 point increase in backlogs and a 6 point increase in new export orders which are both interesting positives that should point to at least a short term continuation of momentum in manufacturing.

2. China PMI
The official CFLP manufacturing PMI came in at 52.9 in April, down slightly from 53.4 in March, and below the Bloomberg consensus of 53.9. The preliminary HSBC/Markit reading was 51.8, the same as the March reading. The readings show the manufacturing sector in China still in expansionary mode, which bodes well for the Chinese economy. But it could well herald another move by the People's Bank of China, particularly given recent comments that it will continue to fight inflation. Next week is China's monthly data release, where inflation is likely to moderate compared to March's 5.4% reading, but it could be an opportune time for the People's Bank of China to do one last interest rate increase.

3. US Nonfarm Payrolls
The US added 244k nonfarm payrolls in April, up slightly versus March's 221k, and compares to 277k in April 2010. The figure brings 2011 net new nonfarm payrolls to 768k YTD. Less meaningfully, the unemployment rate rose slightly to 9.0% from 8.8% in March. So, all up it was a reasonably positive result. The US economy is finally starting to see consistency in jobs added, and this area will likely be a key aspect for a recovery in consumer spending, and thus a key factor in the housing market, as well as general inflation levels. It's likely that job growth will continue to expand in the months ahead, but as identified in the PMI results, there are due downside risks to the US economy, and an early peak in the PMI could well be negative for the jobs outlook.

4. New Zealand Employment Data
New Zealand reported a 30k increase in jobs through the first quarter of this year, with 20k being part time jobs and 10k being full time. The unemployment rate eased slightly to 6.6%, down from 6.7% in Q4 2010, and off of the peak of 7% in Q4 2009. The employment picture in New Zealand is slowly improving, albeit with the negative contribution from the Christchurch earthquake. But with the rugby world cup event soon approaching there should be a noticeable pick up in part-time jobs, at least in the medium term. After that it's more about how the broader economy can gain momentum and leverage off loose monetary policy, high terms of trade, and one-off boosts. The downside is the need for fiscal tightening, with the government likely to announce a more prudent budget in the next couple of weeks as it seeks to sure up government finances and maintain its AA+ credit rating.

5. Monetary Policy Review
On the monetary policy front, the past week was characterized by continued emerging market policy tightening, and continued developed market policy caution. Of the central banks that made decisions on monetary policy settings this week, those that increased were: India +50bps to 7.25%, Philippines +25bps to 4.50%, and Malaysia +25bps to 3.00%. Meanwhile those that held rates were: Australia 4.75%, Romania 6.25%, United Kingdom 0.50%, European Union 1.25%, and the Czech Republic 0.75%. Next week there's interest rate decisions from Poland (11 May) currently 4.00% , Norway (12th May) currently 2.00%, South Africa (12th) currently 5.50%, and South Korea (13th May) currently 3.00%. Most of these banks will probably increase or maintain a hawkish stance.

Summary

So we saw some relatively disappointing PMI results from the US, but with some glimmers of strength still showing through in the manufacturing index. Over in China there was a slight weakening, but generally things were still strong - perhaps allowing scope for another interest rate increase. Meanwhile the US reported a good nonfarm payrolls figure in April, with some promise for continued strength. Over to New Zealand, the March quarter saw a decent employment report, with a positive outlook as the New Zealand economy looks set to gain momentum. On monetary policy the theme of emerging market tightening continued, and is likely to continue for the time being, meanwhile the overriding theme for developed market central banks was policy caution.

Sources
1. US Institute for Supply Management www.ism.ws & Yahoo Finance finance.yahoo.com
2. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & Yahoo Finance finance.yahoo.com
3. Bureau of Labour Statistics www.bls.gov
4. Statistics New Zealand www.stats.govt.nz
5. CentralBankNews.info www.centralbanknews.info

Article Source: http://www.econgrapher.com/top5graphs7may11.html

By Econ Grapher

Bio: Econ Grapher is all about innovative and insightful analysis of economic and financial market data. The author has previously worked in investment management, capital markets, and corporate strategy.

Website: http://www.econgrapher.com

Blog: http://econgrapher.blogspot.com

© 2011 Copyright Econ Grapher - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules