Europe:
Euro, bond yields slip on tepid European inflation data
The euro tumbled to an eight-day low and European benchmark bond yields slipped on Thursday after European inflation data printed below forecasts, supporting the European Central Bank’s plan to remove stimulus only gradually. Euro zone inflation rose by less than expected in November, highlighting that price growth remains weak in the bloc. The single currency fell to an eight-day low of $1.1809, down 0.3 percent on the day. It weakened 0.63 percent against sterling to 87.81 pence with hopes of a Brexit deal breakthrough propping up the British currency. Euro zone bond yields fell after the inflation numbers, with Germany’s benchmark 10-year Bund yield hitting a session low of 0.376 percent. It had hit a 2-week high at 0.407 percent in early trade. Euro zone bank stocks lost their shine after the disappointing inflation data, falling back after a strong early rally.
U.S.:
U.S. consumer spending slows in October, inflation picking up
U.S. consumer spending slowed in October as the hurricane-related boost to motor vehicle purchases faded, while underlying price pressures pushed higher for a second straight month, suggesting a recent disinflationary trend has probably run its course. The Commerce Department said on Thursday consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.3 percent last month after a downwardly revised 0.9 percent jump in September. Consumer spending in September posted its largest gain since August 2009 and was buoyed by drivers in Texas and Florida replacing automobiles destroyed when Harvey and Irma slammed the states in late August and early September. Economists polled by Reuters had forecast consumer spending increasing 0.3 percent in October after a previously reported 1.0 percent rise in September. Spending on long-lasting goods like autos fell 0.1 percent last month after surging 2.9 percent in September.
Asia:
India’s Economy Bounces Back From Three-Year Low
India’s economic growth bounced back from a three-year low, giving the central bank enough ammunition to keep interest rates on hold on Dec. 6 amid an uptick in inflationary pressures. Gross domestic product in Asia’s third-largest economy expanded 6.3 percent in July to September from a year earlier, the Statistics Ministry said in a statement in New Delhi on Thursday. That’s slower than the 6.4 percent median estimate in a Bloomberg survey of 51 economists but faster than 5.7 percent in the previous quarter. Gross value added, a key input of GDP that’s tracked by the central bank, rose 6.1 percent compared with an estimated 6.2 percent gain. It comes as good news for Prime Minister Narendra Modi who is facing elections in his home state of Gujarat on Dec. 18. He has been grappling with slowing growth in the past five quarters, with the economy dragged down by subdued private investments, an unprecedented cash ban imposed last year and the introduction of a country-wide consumption tax in July. “After five quarters we are seeing a reversal — it is very encouraging,” TCA Anant, the government’s chief statistician told a press conference in New Delhi. He added the manufacturing sector had led the recovery as the impact of the new goods and services tax began to wane. The tax had hit entire supply chains with costs for businesses jumping, hurting sentiment.