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By HaleStewart December 14, 2013 5:31 pm
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International Week In Review: Chinese Growth Continues; EU Faltering
Let’s start the weekly international round-up with the latest from China –which just keeps on growing and growing.  The latest inflation reading printed at 3% YOY.  While this is a bit high, it’s hardly at dangerous levels.  And the PBOC has demonstrated a remarkable willingness to act, meaning that should we see the level spike for several months, some type of action would probably be in the cars.  Fixed investment was reported at 19% YOY and industrial production was 10% YOY.
 
In contrast, the EUs’ numbers this week added further concern for those concerned about a slowing growth situation.  Industrial production dropped 1.1% MOM while employment declined .8% YOY (on a quarterly basis); this number has been decreasing the four straight quarters.
 
Perhaps the most disappointing news came from Japan, where GDP was revised lower to 1.1%YOY.  This increases the concerns that after an initial rush of growth from “Abenomics,” the policy is starting to lose its efficacy.  However, industrial production increased 1% MOM and capacity utilization was up 1.2% for the same period, so all was not lost.
 
Australia’s unemployment rate ticked up again to 5.8%.  Adding further concern is the fact that the average of total employed persons has been stable since the beginning of the year. 
 
The UK continues give us encouraging news.  Industrial production was up 4% MOM and 3.2% YOY, while manufacturing production was up .4%/2.7% for the same periods. 
 
Finally, there was more disappointing news coming from India.  CPI increased from 10.1% (YOY) in October to 11.2% YOY.  This news places the Indian Central Bank under further pressure to raise rates – which it an ill-afford to do in a slowing economy.  In addition, manufacturing output decreased .2% MONM while IP dropped 1.8% YOY. 
 
The worst news this week came from India: a central bank that needs an excuse to not raise rates received the exact opposite; in fact, the latest CPI figures more or less forces the banks rate hand.  After showing some strength in the third quarter, the EU's numbers are becoming more and more concerning.  And the decrease in GDP is a blow to Abe's policies; not fatal, but obviously not the best of news either.
 
Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer
 
 
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