Get in touch - Bank of Valletta - BOV Group
Customer Service Centre - Bank of Valletta - BOV Group
  • ... >
  • ... >
  • ... >
  • eTraderplus powered by Saxo Bank new online trading platform... >
  • ... >
  • ... >
  • ... >
  • ... >
Maximise Banner
Minimise Banner
next Previous
next Previous
next Previous
next Previous
BOV Market Watch - Week Ending 06 January 2017
06 Jan 2017
Fed minutes show faster pace of rate hikes. The minutes of the Federal Reserve’s (Fed) December meeting published this week revealed that Fed officials discussed the impact of President-elect Donald Trump's proposed economic programme of tax cuts, deregulation and increased infrastructure spending which may trigger inflation. The minutes show that Fed officials could retain plans for gradual rate hikes but would need to be prepared to increase rates at a faster pace to fight inflation. The minutes said, “Almost all (participants) ... indicated that the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years”. Ian Shepherdson, chief economist at Pantheon Macroeconomics said that he still believes the Fed’s next rate hike will occur in March. 

ISM manufacturing index hits 2-year high in December. According to a report released by the Institute for Supply Management (ISM), growth in U.S. manufacturing activity increased more than expected in December. The ISM manufacturing index climbed by 1.5 from 53.2 in November to 54.7 in December and above economists’ expectations of 53.6. A PMI reading above 50 indicates growth. The gain was influenced by an increase of 4.3 point in the production index and a 7.2 point increase in new orders. The production index increased from 56.0 in November to 60.3 in December. A significant rise in the rate of new order growth added to the bigger than anticipated increase in new orders index with the index increasing to 60.2 in December from 53.0 in November.
Eurozone inflation highest since 2013. Data published by European statistics office, Eurostat, showed that Eurozone inflation rose at the fastest annual rate in more than three years during December due to a rise in energy and food prices. Inflation rose to 1.1% in December, the highest level since September 2013 and a pick up in the annual rate of inflation from 0.6% in November. Inflation exceeded expectations of a 1% rise. Notwithstanding, headline inflation was less than the European Central Bank’s target of ‘below, but close to 2%’ inflation. Simultaneously, core inflation that is, excluding energy, food, alcohol and tobacco rose marginally from 0.8% to 0.9%. Energy prices increased by 2.5% reversing a 1.1% decline in November and food price inflation advanced to 1.2% from 0.7%.  

UK manufacturing PMI highest since 2014. According to a closely watched indicator, U.K. manufacturers saw confidence levels reach a 30-month high as output and new orders strengthened. The Markit/CIPS manufacturing purchasing managers’ index (PMI) rose to 56.1 in December, up from 53.6 in November, as the sector ended the year on a high note. The PMI reading showed that the UK manufacturing confidence remains well above the long-run average of 51.5. A figure above 50 indicates net positive sentiment. The survey showed that the weaker pound helped to underpin orders from abroad resulting in starting the year on a “strong footing”. Nonetheless, the survey found that cost pressures remained high as the weakness of the pound has pushed up imported goods’ prices, leading to higher costs for many manufacturers.

German unemployment prolongs decline as economic growth picks up. German unemployment extended its decline in December amongst signs that growth in Europe’s largest economy accelerated at the end of last year. Data from the Federal Labour Agency in Nüremberg showed that the number of unemployed people fell by 17,000 in December following a revised decline of 6,000 in the prior month, which was initially reported as a decline of 5,000. In December, the number of unemployed people totalled 2.638 million. The jobless rate held steady at 6% in December, the lowest level since Germany’s reunification. The number of unemployed people fell, even though that the labour market had to absorb 425,000 migrants who registered as job seekers in December.

China December manufacturing PMI strongest since 2013. A private business survey showed that China’s factory activity improved more than expected in December, as demand increased with output reaching a near six-year high. The China Caixin manufacturing PMI, a private measure of nationwide factory activity, rose to 51.9 on a seasonally adjusted basis from 50.9 in November, whilst exceeding economists’ expectations of 50.7. The index gained momentum gradually thanks to a lending and construction boom. The reading, which now has exceeded 50 indicates expansion in activity from contraction for six consecutive months. The figure marked the strongest upturn in Chinese manufacturing conditions since January 2013. However, according to data from the National Bureau of Statistics, China's official manufacturing PMI fell to 51.4 in December from 51.7 in November.

Japan manufacturing sector picks up steam. The latest survey from Nikkei revealed that the manufacturing sector in Japan continued to improve in December and at the fastest pace. On a seasonally adjusted basis, the Final Markit/Nikkei Japan manufacturing PMI increased from the preliminary reading of 51.9 and November’s reading of 51.3 to 52.4 in December. The reading moved further above the boom-or-bust line of 50 threshold that separates expansion from contraction for the fourth successive month. Operating conditions improved at the sharpest rate since December 2015. 
Share this item:
Print page
Sort reviews by:
This item has no reviews yet.
My Guide has identified the following related material
next Previous
 
BOV Pjazza
next Previous