The last day of September brings a lot of important economic reports, as expected.
First off, China delivered an unpleasant surprise with its NBS manufacturing PMI for September, which didn’t meet the forecast and fell to 49.6, indicating that the sector contracted this month instead of growing. However, the non-manufacturing PMI came in at 53.2, about 5 points higher than the previous month.
Another highlight today were the final GDP growth rate reports for the second quarter from the United Kingdom. Both yearly and quarterly reports exceeded investors’ expectations, giving the pound a reason to recover some of yesterday’s losses against other major currencies.
Germany, on the other hand, did quite poorly today. Both the unemployment change and the unemployment rate reports failed to meet the forecast, which means the German labor market performed worse than expected in September. In addition, inflation in Germany did not grow as much as expected and also disappointed investors. This spells trouble for the EU’s most important economy.
Another EU member state, Italy, also reported on unemployment and inflation today. Its unemployment rate in August was slightly higher than expected at 9.3%, but inflation in September grew more than expected.
The United States also published its GDP growth rate report for the second quarter of 2021 today. At 6.7%, it was slightly better than expected.
As is typical of any non-holiday Thursday, the US also delivered its latest jobless numbers. Initial jobless claims this week were slightly higher than expected, and continuing claims also didn’t drop by as much as the market had hoped for. The four-week average has gone up slightly.
Last but not least, there will be several speeches by members of the Federal Reserve later today.
In addition, US lawmakers are due to vote on an agreement to extend funding for the government until December today. If bilateral agreement is reached, as Democrats claim is expected, then a shutdown will be avoided tomorrow.
Incidentally, the political mess in the United States, together with the poor performance of the Chinese economy of late have contributed to a higher demand for safe havens, pushing the US dollar higher against other major currencies.
US stock indices today will trade slightly higher than yesterday, but their overall performance is not that great right now due to the risk aversion sentiment among investors.
