Asia Pacific

China's Services Sector Resilient In Nov. Growth in China’s services sector held near one-year highs in November, another indicator of strength as the government prepares to introduce sweeping reforms to restructure the world’s second largest economy. The official purchasing managers’ index (PMI) for the non-manufacturing sector dipped slightly to 56 in November from a 13-month high of 56.3 in October, the National Bureau of Statistics said yesterday. That is still comfortably above the 50-point threshold that separates growth from contraction, and follows two other PMI surveys this week that showed a pickup in activity for manufacturers last month. (Reuters)

Australia Growth Rate Falls Short Of Forecasts. Australia has reported weaker-than-expected growth for the July-to-September quarter partly due to slower domestic demand. The nation's gross domestic product (GDP) expanded 0.6% compared to the previous quarter and 2.3% year-on-year. Most analysts had forecast a quarterly growth of about 0.7% and an annual expansion of close to 2.6%. Australia's economy has also been hurt by a global slowdown which has seen its mining boom wane recently. (BBC)

USA

Companies Boost U.S. Payrolls By Most In A Year. Companies boosted payrolls in November by the most in a year, a sign that U.S. employers were optimistic about demand after the end of a government shutdown a month earlier, a private report based on payrolls showed today. The 215,000 increase in employment exceeded the most optimistic forecast in a Bloomberg survey and followed a revised 184,000 gain in October that was larger than initially estimated, according to the ADP Research Institute in Roseland, New Jersey. The median forecast of economists called for a 170,000 advance. (Bloomberg)

Services Slowdown Highlights Uneven U.S. Expansion. Services from banking to transportation grew more slowly in November, pointing to a U.S. economy that is making progress in fits and starts heading into the new year. The Institute for Supply Management’s non-manufacturing index dropped to 53.9 from 55.4 in October, the Tempe, Arizona-based group said today. A gauge above 50 shows expansion among companies that account for almost 90 % of the economy. Other reports showed company hiring picked up more than projected last month and sales of new houses surged in October. (Bloomberg)

Trade Gap In U.S. Shrank In October On Record Exports. The trade deficit in the U.S. narrowed in October for the first time in four months as exports climbed to a record. The gap decreased 5.4 % to $40.6 billion from a $43 billion shortfall in September that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of 63 economists called for a $40 billion deficit. (Bloomberg)

CEO Expectations For U.S. Economy Climb On Sales, Hiring Outlook. More U.S. chief executive officers project a pickup in sales, capital spending and hiring in the next six months, a survey showed. The Business Roundtable’s economic outlook index climbed to 84.5 in the fourth quarter from 79.1 in the previous three months, the Washington based trade group said today. Readings greater than 50 are consistent with economic expansion, and the group said the index’s long-term average is 79.4. (Bloomberg)

New-Home Sales In U.S. Rebound From One-Year Low. Purchases of new U.S. homes rebounded in October from the lowest level in more than a year, signaling buyers are starting to take higher mortgage rates in stride. Sales jumped 25.4 % to a 444,000 annualized pace, following a 354,000 rate in the prior month that was the weakest since April 2012, figures from the Commerce Department showed today in Washington. The median forecast of 62 economists surveyed by Bloomberg called for 429,000. (Bloomberg)

UK Services Growth Remains Strong. Growth in the UK services sector remained strong last month, a survey has suggested. The Markit/CIPS Purchasing Managers' Index (PMI) for the service sector recorded a level of 60 for November. Although this was down from October's 16-year high of 62.5, it still marks buoyant growth in the sector. A reading above 50 indicates expansion. Markit said recent surveys suggest the UK economy may grow by more than 1% in the fourth quarter of the year. This would represent an acceleration from the 0.8% growth recorded in the third quarter. (BBC)

Currencies

Dollar Gains Fade As Traders Ponder Fed Taper. The U.S. dollar gave back some of the gains scored after a report on private-sector payrolls underlined ideas the Federal Reserve could move sooner than previously thought to cut back on its monthly bond purchases. The euro traded as low as $1.3526 in the wake of the data, but fetched $1.3593 in recent trade, virtually unchanged from its level in North American trade late Tuesday. The dollar also gave back its earlier rise versus the Japanese yen, to trade at ¥102.023 from late Tuesday’s level of ¥102.31. The ICE dollar index, a gauge of the currency’s strength against six rivals, was little changed at 80.626. The Aussie had traded at 91.40 U.S. cents late Tuesday in North America. (Market Watch)

Commodities

U.S. Crude Gains $1, Spread Narrows As Inventories Drop. U.S. crude oil futures rose more than $1 on Wednesday, a fourth straight day of gains as government data showed an unexpected fall in U.S. stockpiles in the world's largest oil consumer. Brent crude for January delivery fell by 74 cents to settle at $111.88 after reaching a session low of $111.46. U.S. crude rose $1.16 to settle at $97.20 a barrel, having earlier touched a five-week high of $97.58 and posting its largest 4-day %age gain since early July. (Reuters)

Gold Rebounds 2 Pct On Short-Covering, Technical Buying. Gold prices rose 2% on Wednesday, breaking above $1,250 an ounce briefly, on technical buying and heavy short-covering after bullion's recent sharp losses. Spot gold was up 2 % at $1,247.96 an ounce at 1:32 p.m. EST (1832 GMT), having traded as high as $1,250.30. Silver mirrored gold's moves and rose 3.8 % to $19.85 an ounce. Platinum was up 1.5 % at $1,375 an ounce, and palladium increased 2 % to $727.47 an ounce. (Reuters)

Fed Says Factories Supported ‘Modest To Moderate’ Growth. Gains in manufacturing, technology and housing fuelled “modest to moderate” economic growth from early October through mid-November, the Federal Reserve said. “Hiring showed a modest increase or was unchanged,” the central bank said today in its Beige Book business survey, which contains anecdotal reports from the 12 Fed district banks two weeks before the officials meet to set monetary policy. Consumer spending increased in most of the country, with retailers expressing optimism about holiday sales. “Manufacturing activity continued to expand in most districts, with gains noted in the motor-vehicle and high-technology industries,” the Fed said. “Demand for professional business services experienced stable to moderate growth, especially in computer technologies.” The report gives policy makers clues to the state of the labor market and the economy as they debate whether to start reducing $85 billion in monthly bond purchases. (Bloomberg)

Europe

Euro-Area Economic Growth Slows As Exports, Consumption Cool. The euro area’s nascent recovery from a record long recession nearly stalled in the third quarter as exports and household consumption cooled. Gross domestic product rose 0.1 % after a 0.3 % gain in the previous three months, the European Union’s statistics office in Luxembourg said today. That’s in line with Eurostat’s initial estimate. From a year earlier, the economy contracted 0.4 %. (Bloomberg)

Eurozone Recovery 'Loses Momentum'. The eurozone "lost some momentum" in November, a survey says, with private sector activity slowing slightly. The Markit composite purchasing managers' index (PMI), which tracks several sectors, slipped to 51.7 from 51.9 in October. But the figure beat expectations, and the PMI reading stayed above 50, indicating expansion. In Germany, composite PMI hit a 29-month high as firms hired more workers to meet the demands of new orders. In Spain, the service sector returned to growth and the sector saw its biggest increase of new business since 2007. Meanwhile, retail sales in the eurozone fell 0.2% in October, following a decline of 0.6% in September, said Eurostat, the European statistics agency. (BBC)

Source: Kenanga