Euro-area government bond yields and the euro fell on Thursday after European Central Bank President Mario Draghi reiterated that further monetary stimulus could be coming next month. The gap between U.S. and German 5-year bond yields climbed to 181 basis points, the highest level since 1999. The shared currency touched a 6-monht low of $1.0675 in early trading before rebounding a bit to $1.0715.
Lending activity in China dropped to the lowest level in 15 months in October, highlighting the limits of government’s efforts to use credit to reinvigorate slowing growth. China’s total social financing (TSF), the broadest measure of new credit in the economy, fell to 476.7 billion yuan ($75 billion) last month from 1.3 trillion yuan in September, the least level since July 2014, according to the People’s Bank of China.
High Income Economies
Euro Area industrial production slipped by 0.3 percent in September (m/m, sa), following a 0.4 percent drop in August. The decline was larger than expected, led by lower output of consumer and capital goods, and adds to European Central Bank concerns about downside risks as policy makers consider more stimulus.
The economy of Russia contracted by 4.1 percent (y/y) in Q3. Following falls of 4.6 percent in Q2 and 2.2 percent in Q1, Russia is in the midst of its first recession since 2009. With the drop in oil prices and international sanctions associated with the conflict in Ukraine, the ruble depreciated 48 percent against the U.S. dollar over the past year, and inflation accelerated to above 15 percent.
The Australian economy added 58,600 jobs in October, the largest increase in more than three years. The result was far ahead of expectations, and brought down the unemployment rate to 5.9 percent in October, compared with 6.2 percent in September. The labor force participation rate rose slightly to 65 percent.
East Asia and Pacific
The Philippine central bank maintained its key interest rates for the ninth consecutive rate-setting session on Thursday. The overnight borrowing or reverse repurchase facility was held at 4 percent and the overnight lending or repurchase facility at 6 percent. The bank also left the reserve requirement ratios unchanged.
Latin America and the Caribbean
Declining for the eighth month, Brazil's retail sales fell 0.5 percent (m/m) in September, following the 0.9 percent drop in August. Economists had expected the same 0.9 percent fall. On annual basis, retail sales dipped 6.2 percent, after August’s 6.9 percent decline.
India's industrial production growth slowed more than expected to 3.6 percent (y/y) in September, much slower than August’s 6.3 percent expansion, figures from the Central Statistics Office revealed Thursday. Within total production, electricity output surged 11.4 percent, while manufacturing and mining grew only 2.6 percent and 3 percent, respectively.
The Rwandan government has put in place a new public private partnerships (PPPs) law that will help improve investment and service delivery. The new framework, aimed at increasing efficiency and effectiveness in public service delivery, allows the private sector to see upcoming projects and come up with unsolicited bids.