Job ads soften again but the end is in sight
ANZ job ads slipped 0.8% in November, continuing to indicate that the sluggish conditions in the labour market remain.
The rate of annual decline however, is diminishing, and suggests that improvement is in prospect. In the year to November, job ads were down 10.3%, an improvement on the over 18% decline recorded six months ago.
Equity markets around the world extended gains on improving global growth prospects, although some comments by Fed officials signalling it was ready to reduce its asset purchase program may have capped gains.
Shares in Asian trade yesterday (with the exception of Australia) gained on the positive Chinese trade data over the weekend.
Overnight, shares in Europe also rose. In the US, the S&P500 gained 0.2% and hit a new record high, while the Dow was flat.
US treasuries continued to trade in a narrow range with yields on 10-year notes little changed.
There was little reaction in bond markets to the Fed speakers last night, and will unlikely be any large swings in bond markets until there is any new information on the outlook for Fed policy. The FOMC meeting will be held next week.
The euro rose to a six-week high against the greenback on signs that the outlook for global growth was improving.
Meanwhile, the US dollar rose to its highest since May against the Japanese yen, as risk appetite improved. The Australian dollar was little changed, but held onto the gains following the Chinese trade data on the weekend.
Commodity prices were generally stronger on better global growth prospects. Oil prices however, were weighed down by expectations of stronger supply as TransCanada Corp began filling its oil pipeline.
Price pressures remain well contained in China. Consumer price inflation edged down from 3.2% to 3.0% in the year to November. Producer prices were also subdued, declining 1.4% in the year to November.
Euro zone Sentix investor sentiment slipped from 9.3 to 8.0 in December, although the expectations index was firmer.
German industrial production fell 1.2% in October following a 0.7% decline in September. These were the first back-to-back declines this year. The annual growth rate stood at 1.0% in the year to October.
In other data, exports rose 0.2% in October after rising 1.7% in September. Labour costs fell 0.3% in Q3, after a similar Q2 fall, to be up just 1.6% in the year.
The current account unexpectedly posted a deficit in October at ¥127.9bn. It followed a ¥587.3bn surplus in September, and was the first since January.
The deterioration in October in part reflects Japan's growing reliance on oil imports.
Economic growth in Q3 was revised down from 0.5% to 0.3% in the quarter, suggesting that some headwinds remain in Japan's economy.
A number of Fed officials have spoken last night, regarding the outlook for unwinding the Federal Reserve's quantitative easing program.
St. Louis Fed President Bullard (a voting member) has said that one reaction to recent economic data could be a "small taper" to "recognize the progress that's been made in labor markets, which I think is undeniable".
Bullard was still concerned about low inflation, and also added "should inflation not return toward target, the committee could pause tapering at subsequent meetings".
Another official, Dallas Fed President Fisher has said "It is time to taper" and that the costs of the asset purchase program had far exceeded its benefits.
Fisher will become a voting member on the policy-setting panel next year.
Richmond Federal Reserve President Lacker has advocated clear communication of QE reduction and said that "we need to take very good care that we're clear and market expectations are aligned with us on the path of short-term rates."