Economic Releases October 15- October 19
United States
Tuesday: Industrial Production gained 0.1% in September as predicted, but Augusts' number lost 0.2% on revision to flat. Auto manufacturing output fell 3.3% in the month largely due to the two day General Motors strike. Non auto manufacturing added 0.3%, a reasonable recovery after the flat result in August and the financial market upsets.
Capacity Utilization was 82.1% in September as expected, virtually unchanged from 82.2% in August.
The Treasury International Capital system (TICS) in August registered the first decline in net long term capital flow since 1995 at -$69.3 billion. About half of the deficit was due to foreigners selling US assets and half to the overseas investments of US residents. Foreign investors sold $34.9 billion of US Securities, $24.2 billion by official institutions and $10.6 billion by private investors. US residents bought $34.5 billion in foreign securities. It was the first net sale of securities by foreigners since 1998. Private investors and hedge funds sold US equities and central banks sold US Treasuries. Overseas investors had been forecast to purchase $60 billion of US debt instruments. Coming after July's far below average inflow of just $19.2 billion the exodus aroused concerns about the funding of the US trade deficit which requires about $60 billion a month of net purchases. The credit crisis in August forced many owners of US debt to sell all or part of their holdings. Net sales by private investors were predominantly in equities and corporate paper exactly what one might expect in a credit panic. But the demand of these same private investors for US Treasuries and government agency debt, the least risky class of securities, rose. The TICS number has always exhibited a great deal of month to month volatility. Two months do not make a trend and with US equities staging a strong recovery in September and October, a return to the US market for foreign capital can be expected.
The National Association of Home Builders (NAHB) Housing Market Index for October at 18, 2 down from September, was the lowest score for this series since inception in 1985.
Wednesday: consumer inflation in September rose 0.3% a 2.8% yearly rate; the core rate gained 0.2% or 2.1% yearly. Though both numbers were largely as predicted, the core rate has ceased falling in August and September. Prior months had dropped steadily from February's 2.7% rate.
Housing Starts fell 10.3% in September to 1.191 million units the smallest number since March 1993 and well off the 1.3 million expected. Building Permits shed 7.3% to 1.226 million also the lowest since 1993.
Thursday: weekly jobless claims for the week ending October 13th rose 28,000 to 337,000 against the expectation of 312,000. A labor Department official said that a 'portion' of the rise was due to 'seasonal adjustment volatility'. Weekly numbers by nature vary widely but these results did nothing to alleviate the gloom gathered about the Dollar. The Euro reached 1.4311, in the aftermath.
NAHB Housing Market Index fell to 18 in October, down two from September and a new low record for the series which began in 1985.
Eurozone
Tuesday: final September HICP was unrevised at +0.4% and +2.1%, the highest yearly reading since +2.3% in August 2006. It was the first time in 13 months that the harmonized index has been at or above the 2.0% ECB target. The rate in August was 1.7%.
Thursday: Construction Output improved +0.4% in August, a +2.8% yearly rate; for July the rates were revised down to -0.1% monthly and +1.4% yearly from 0.0% and 1.7%, June results were also dropped to +0.3% from +0.6%. A surge in German output was the largest component in the EMU statistic.
Germany
Tuesday: final HICP for September came in as expected +0.2% but the +2.7% yearly figure was the highest in six years. The last time this standardized EMU statistic was above 2.0% in Germany was July 2006. Final CPI for September rose 0.1% to 2.4%. Though this was slightly better than the forecasts of +0.2% and 2.5%, the annual rate was the highest in two years. It was last at 2.5% in September of 2005.
The ZEW Survey for October showed business attitudes largely unchanged from the prior month: 'expectations were -18.1 the same as in September and 'current condition' fell slightly to +70.2 from +74.4. Both numbers were as forecast.
Friday: PPI accelerated in September to +0.2% and +1.5%, double the monthly rate in August and half again the yearly rate. Though PPI was less than the forecasts of +0.4% and +1.8%, and was led by volatile energy prices, with oil touching $90 a barrel this week there is no comfort in these numbers for the ECB.
United Kingdom
Monday: Rightmove house prices from the online property site jumped 2.7% in October erasing the 2.6% decline in September. The yearly rate moved up to 10.4% from Septembers' +9.6%. The DCLG House Price Index dropped one percent in August to +11.4% from the July result of +12.4%. This statistic records an actual transaction price, an simply the asking prices. The apparent contradiction between the two widely used house price surveys is due to a new government reporting requirement. Known as the Home Information Pack this puts a reporting burden on sellers who may have been rushing to complete sales before the September 10th deadline.
Tuesday: CPI in September at +0.1% and +1.8% for the year was lower than the forecast of +0.2% and 1.9% and cleanly below the BOE 2.0% target measure. Core CPI was flat and up 1.5% annually, well under the 1.8% expected yearly rate. Sterling dipped 45 points on the release.
Wednesday: ILO unemployment rate stayed constant in August at 5.4% as expected. Average Earnings rose at a 3.7% three month moving average yearly rate. In July it gained 3.5%.
Thursday: Retail Sales volume surged 0.6% in September to 6.3% for the elapsed year. It was the highest annual rate in three years, and well ahead of the median forecasts, +0.1%, +5.6%.
Friday: preliminary GDP gained 0.8% in the third quarter and 3.3% yearly, slightly better than the +0.7% and +3.2% forecast .
China
Monday: The People's Bank of China raised the reserve requirement effective October 25th for the eighth time. The 50 bps point hike brought the reserve to 13.0% the highest ever and brings the increase this year to 400bps. The PBOC has already raised rate five times this year and the reserve requirements seven times.
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