Market Talk – Tuesday, Oct. 8

Some economic news from Europe today:

Swiss:

  • Unemployment Rate n.s.a. (Sep) remain the same at 2.1%
  • Unemployment Rate s.a. (Sep) remain the same at 2.3%

Germany:

  • German Industrial Production (MoM) (Aug) increased from -0.4% to 0.3%

France:

  • French Current Account (Aug) decreased from 0.20B to -2.50B
  • French Exports (Aug) increased from 42.2B to 42.8B
  • French Imports (Aug) increased from 46.9B to 47.8B
  • French Trade Balance (Aug) decreased from -4.5B to -5.0B

Spain:

  • Spanish Industrial Production (YoY) (Aug) increased from 1.2% to 1.7%

Italy:

  • Italian Retail Sales (YoY) (Aug) decreased from 2.4% to 0.7%
  • Italian Retail Sales (MoM) (Aug) remain the same at -0.6%

UK:

  • Labour Productivity (Q2) increased from -0.6% to -0.5%

US/AMERICAS:

Federal Reserve Chairman Jerome Powell announced that central bank plans to incrementally increase the reserve supply. Treasury bills will compose the majority of purchases, but Powell stressed that increases to the balance sheet will not result in Quantitative Easing. “I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis,” Powell noted. Furthermore, Powell said this move is not an indication of future monetary policies (i.e. interest rates) and that he and his colleagues are reviewing all incoming data before the next FOMC meeting later in the month.

The US Federal deficit has reached a seven-year peak — $984 billion. Federal spending has surpassed revenue by an estimated $1 trillion. Year-over-year, the deficit grew 26% or $205 billion. Some point to President Trump’s tax reductions as a reason behind the reduced revenue. Yet, both Democrats and Republicans have continually voted to increase spending. The Treasury Department will publish the official figures in the coming weeks.

Today, the US blacklisted 28 Chinese entities involved in AI government surveillance software from operating within the US. The Commerce Department noted that the banned entities violated human rights against Muslims and other minority groups within China. Commerce Secretary William Ross noted, “The US Government and Department of Commerce cannot and will not tolerate the brutal suppression of ethnic minorities within China.” Hikvision, one of the world’s largest surveillance companies with an estimated worth of $42 billion, claimed that the ban will have a negative effect on the US economy as a whole and “deter global companies from communicating with the US government.”

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