In this section, we look at the economic news affecting global markets this week.
- NAB’s Business conditions hit its highest point since pre-GFC rising 15 points from 8 points in June. Business confidence rose 12 points from 8 points, which is double the long-run average.
- Soaring power bills are posing a threat to the National economy. High power prices has been revealed as a major cause for falling economic confidence.
- The US economy added 209,000 jobs in July which was a beat on an expected 183,000. The unemployment rate fell to 4.3% the lowest since March 2001. The number of employed hit a new high of 153.5 million. It was an overall strong employment number and indicates strong growth. It will also increase the chances of the Fed raising rates towards the end of 2017.
- The US trade deficit dropped in June as exports increased to their highest level in two and a half years. This is was another positive data read for the economy.
- US Nonfarm productivity, which measures hourly output per worker was up 0.9% annualised rate in the April-June period.
- Britain is getting ready to pay up to €40bn to the European Union to settle the Brexit divorce bill which is part of the exit process. But Britain said it will only pay the amount if the EU negotiates a future trade deal. It’s going to be an almost impossible task. Last month the EU refused to talk about trade until certain other finer details had been nutted out. So to break this deadlock, Britain are trying to pay its way out. Good luck.
- German industrial production fell for the first time this year in June. It fell 1.1% on the month after rising 1.2% in May.
- China’s FX reserves were up for the sixth straight month in July rising on the back of increased scrutiny of capital flows and a weaker US dollar.
- China’s trade surplus widened as exports rose 7.2% and imports were up 11%. Both fell short of expectations. But the overall trade surplus widened to a larger-than-expected $US46.7bn from $US42.8bn in June.