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By HaleStewart October 27, 2013 5:10 pm
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Weekly Sweep Of Important Economic Numbers: 10/20-10/25

Last week we had important data released from most of the major world economies.

Let's start with the Markit EU composite index, which dropped from its 27 month high of 52.2, but still printed a positive 51.5.  Overall, the numbers coming out of the EU continue to point to an improving, albeit it still fragile, recovery.  On that note, Spain emerged from their recession as well.  These improving numbers indicate why most of the major EU ETFs are rallying and why the euro is increasing in strength, especially against the dollar.

The Bank of Canada kept rates at 1%.  Canada has similar problems to the US -- they're growing but just barely.  Consider this chart of overall annual growth:

The annual growth rate is coming in just slightly above the 1% mark -- not exactly a gangbusters situation.  This low rate of growth is a primary reason for the fairly weak showing across the board from the Canadian dollar. 

UK GDP increased by .8% in the 3Q.  The best news of the report was this: In the latest quarter there was widespread growth, with increases in each of the four main aggregates.   Looking at the data in a time series, we see growth increasing now for the last three quarters:

Here is how the Bank of England characterized the current economic situation in their latest minutes:

Surveys had continued to point to strong growth in the second half of the year, with Markit/CIPS activity indices remaining at high levels in September, and a sharp pickup in the BCC output and orders balances in Q3. By themselves, surveys would point to growth of around 1% a quarter in the second half of 2013. The Bank’s Agents also judged that output growth had picked up to at least trend rates in Q3. There were limited official data on the third quarter, but industrial production had fallen by 1.1% in August. Overall, Bank staff estimated that growth in the second half of the year would remain around 0.7% a quarter or a little higher, stronger than expected at the time of the August Inflation Report.

The Conference Boards LEIs for China increased .9%, as these indicators continue their steady increase.  This data was confirmed by the latest HSBC manufacturing release, which printed at 50.9.  However, the Shanghai index fell through support last week, making this one of the worst performing indexes of the major economies:

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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