December 9, 2019
U.S. Wage Growth Eclipses Mortgage Rate for First Time Since 1972
“The U.S. economy reached an important milestone in October that ought to put it on a more sustainable footing going forward: wage growth eclipsed mortgage rates for the first time since 1972. Average hourly earnings for production and nonsupervisory employees — who comprise more than 80% of the U.S. private-sector workforce — rose 3.8% from a year earlier in October, according to Labor Department data published Friday. The average 30-year fixed mortgage rate in the U.S. in October was about 3.7%, according to Freddie Mac data. A year ago, before the Fed began easing, mortgage rates were closer to 4.9%. If those trends continue, the combination will limit the debt burden for American households by keeping the share of would-be homebuyers’ wages being spent on interest payments under control. The Federal Reserve’s three rate cuts this year — undertaken for other reasons — have allowed wage growth to finally catch up as the job market continues to improve.”
Pound Rally Gets Nod From Signal That’s Been Right for a Decade
“There’s a technical pattern in the euro-pound pair that may bode well for sterling. The cross’s 21-week moving average has fallen below its 89-week equivalent, an event that in the past ushered in average gains of about 2% for the pound over the course of almost three months. Other than on Monday, this so-called death cross pattern happened just four times over the past decade, and the euro fell further on each occasion. There’s more bad news for the euro. The currency is on the verge of closing against the pound below its 55-monthly moving average for the first time since May 2016.”
China Clampdown on Illegal Meat Risks Trade
“China’s crackdown on illegal meat imports has left India, one of the biggest exporters of buffalo meat, scrambling for a new buyer. China has adopted stricter border controls due to African swine fever, meaning Indian buffalo meat exports into China that usually flow through Vietnam has all but stopped. Indian exporters are now hoping Indonesia can more than triple its meat imports from the South Asian nation to make up for the heavy losses this year. Tighter border controls in China have hurt a black market meat trade that’s normally worth about $2 billion a year. India can’t directly sell buffalo meat to China due to a ban by Beijing since 2001 following an outbreak of foot-and-mouth disease. China, the biggest consumer of pork, has boosted beef and other meat imports as consumers seek alternatives following the deadly swine disease that’s killed millions of pigs. Indian shipments of buffalo meat and offal to China via Vietnam, Myanmar, Thailand and Hong Kong, has slumped 23% from a year earlier to 14,645 containers this year to October, according to data compiled by the All India Meat and Livestock Exporters Association. Government figures showed exports to Vietnam, India’s biggest buyer, dropped 34% to 202,873 tons in the six months ended in September.”
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