Last Friday, US jobs report was due. The US unemployment rate fell to a nine-year low of 4.6% in November, as employers added another 178K jobs, making it almost certain that the Federal Reserve will raise interest rates later this month.
The unemployment rate hit its lowest level since August 2007 because more people found work but also because the labour force shrank as more people retired, lowering the number of working-age people in the labour force to 62.7%.
Average hourly earnings fell three cents, or 0.1%, after rising 0.4% in October and gaining 0.3% in September. Average hourly earnings fell for workers in mining, manufacturing and utilities in November.
Last month’s drop in wages lowered the year-on-year gain to 2.5% in November from October’s 2.8% increase, which was the largest rise in nearly 7-1/2 years.
U.S. banking regulators must defend tough rules governing Wall Street and resist efforts to dilute regulations that might prevent a future financial crisis, Federal Reserve Governor Daniel Tarullo said on Friday. “It is critical that we not forget our still quite recent history,” Tarullo told a meeting of financial market researchers in Washington, referring to the 2008 housing bust that pushed global financial markets to near-collapse.
Eurozone Producer Prices rose by their highest amount in more than 4yrs in October as energy prices increased during the month, a positive sign for the ECB in its fight against ultra-low inflation. The European Union’s statistics office said on Friday that prices at factory gates in the 19 countries sharing the euro increased by 0.8% in monthly terms in October and decreased by 0.4% from a year earlier.
With Italy’s constitutional referendum vote yesterday, potentially underlining growing anti-establishment, the ECB is preparing to set to try to bring some calm to the mix. The ECB is expected to announce a six-month extension to its QQE programme this week, according to a majority of economists polled by Reuters, who also expect the bank to keep the size of its monthly asset purchases unchanged.
With his career on the line, Prime Minister Renzi made a final appeal to Italians on Friday to support a crucial referendum to change the constitution, saying Italy could become Europe’s strongest nation if it wins.
“(This Sunday) could change the lives of our children,” he told a large rally in his home city of Florence. “It is not for us, it is not for a political party, it is for them,” he said at the end of a frenetic day of campaigning that included numerous media events and public rallies. Financial markets and European political leaders fear victory for the opposition “No” camp in Sunday’s vote could trigger political instability and renewed turmoil for Italy’s battered banks, pushing the euro zone towards a fresh crisis.
The BoE’s chief economist, Andrew Haldane, said on Friday it would be risky to raise interest rates too hastily and that he was comfortable with the BoE’s recent shift to a neutral stance on what its next monetary policy move should be. Britain’s central bank is grappling with the effect of a sharp fall in sterling since June’s vote to leave the European Union, which Haldane said was likely to push up inflation and also hurt growth over the coming year.
The Canadian economy added 10,700 jobs in November and the jobless rate fell to 6.8%, but the strength was undermined by signs of deterioration in job quality and in Canada’s long-suffering resource sector. The rise in employment bucked analysts’ forecasts for a loss of 20,000 jobs after two months of growth and reinforced expectations that the Bank of Canada will keep interest rates unchanged next week and for all of 2017.
Industrial output in Brazil fell more than expected in October as capital goods production slipped for a fourth straight month, in a sign of weakened appetite for investment amid a recession, government data showed on Friday. Total industrial production fell 1.1% in October from September after seasonal adjustments, erasing the 0.5% increase seen in the previous month, government statistics agency IBGE said. Production in October retreated 7.3% from a year earlier, down from a 4.8% drop in September.
Standard & Poor’s downgraded South Africa’s local debt by one notch to BBB on Friday but kept its sovereign credit rating unchanged at BBB-, one level above “junk” status, while saying the economy was still struggling. S&P retained its negative outlook on the rating. A cut would take South Africa below investment grade, pushing its bonds out of global indices and preventing institutional investors from buying its debt.