Household Spending

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Highlights

September household spending dropped 1.9 percent on the year after sinking 4.1 percent in August. The decline was led by a continued sharp drop in spending on automobiles and a pullback in spending on TVs. Many households had already bought new digital TVs ahead of July 24, when Japan terminated analogue broadcasting services. Transportation & communication spending slid 11.0 percent while fuel, light & water charges dropped 10.0 percent on the year. Spending on clothing & footwear dropped 5.0 percent. On the plus side, housing was up 9.9 percent and spending on furniture & household supplies was up 6.5 percent. Medical spending was up 2.3 percent.

Still many unanswered questions for Europe

European leaders finally thrashed out a comprehensive response to their sovereign debt and banking crisis which culminated in a detailed communiqué released this morning in Brussels. This is a summary of the key features of this document together with our assessment of its effectiveness:

Equities ignored amidst euro-focus

Such is the understandable focus on Europe right now that almost unnoticed this month has been the very powerful improvement in global equity markets. Just as well,

Chinese policy-makers are turning

Against the backdrop of slower growth in Europe and the rest of the world, and with the local economy clearly responding to the significant tightening in monetary policy,

Are the storm clouds clearing in the US as well?

Europe’s creditable crisis response has almost been matched by an encouraging report out of the US suggesting that the worst may be behind them, at least in the short term.

A Bank full of bears

Not one or two but three MPC members have offered a very downbeat assessment of UK economic prospects in recent days.

Daily Forex Brief London: Thursday 27th October 2011

  Getting there, but slowly

After an all-nighter in Brussels, European leaders have finally announced a package of measures which they hope will placate the concerns of investors and traders regarding the sovereign debt and banking crisis. The package has three major components ? the firepower of the EFSF has allegedly been raised to EUR 1.4trln, Greek debt-holders have apparently accepted a 50% haircut, and European banks are to be recapitalised. Also announced was a more significant role for the IMF (although exactly what that role will be is not yet clear), and the continued involvement of the ECB with respect to buying the bonds of troubled European sovereigns in the secondary market. These measures have literally just been announced in the last couple of hours and as a result, fuller analysis will follow over the course of the day. Suffice to say at this stage, European policy-makers appear to have done enough for now to encourage the belief that they are finally facing up to the true extent of their difficulties. In response, the EUR is up above 1.40, the dollar is weaker, metal prices are higher and Asian equities are up by more than 2%.