Europe:
Germany’s Jobless Rate Drops to Record Low as Economy Booms
Germany’s unemployment rate fell to a record low as the number of people out of work slid for a sixth month, reflecting a boom in Europe’s largest economy that could push up wages and inflation. The jobless rate was 5.5 percent in December, and the previous month’s rate was revised down to the same level, the Federal Labor Agency in Nuremberg said on Wednesday. The number of unemployed plunged by 29,000 last month, more than twice as much as the median estimate in a Bloomberg survey of economists. Germany has been enjoying a strong economic run supported by domestic spending and solid global trade, with Purchasing Managers’ Indexes on Tuesday showing factory activity for the country and the euro area jumping to records in December. At the same time, business optimism has slipped from an all-time high as corporate executives fret over production constraints such as finding skilled workers that may start to lift their costs. “People are not afraid to spend money because unemployment is so low and that boosts domestic demand,” said Jens Kramer, an economist at NordLB in Hanover. “It’s something of a miracle that wage growth was so moderate after we effectively had full employment for two years in Germany. We should eventually see pressure for higher wages this year.”
Asia:
China central bank can tell local governments to regulate bitcoin miners’ power use
China’s central bank told a top-level government internet finance group that the monetary authority can tell local governments to regulate the power usage of bitcoin miners to gradually reduce the scale of their production, a source said. While the People’s Bank of China (PBOC) can’t directly regulate bitcoin miners’ power usage, it can ask local authorities to do so, the central bank told members of the Leading Group of Beijing Internet Financial Risks Remediation at a meeting at the end of 2017, the source said. Experts say China is one of the world’s biggest sources of bitcoin mining, where miners solve complex mathematical puzzles with computers in order to be awarded virtual coins. The intensive use of computers for bitcoin mining has boosted demand for electricity. In September China ordered all initial coin offerings to cease and all cryptocurrency trading exchanges to be shuttered with the aim of containing financial risks. Bitcoin miners have feared that they could be the next target.
U.S.:
Dollar rebound leaves investors disinterested
The dollar bounced on Wednesday, snapping a three-week losing streak as investors consolidated positions before manufacturing data and minutes of a December U.S. Federal Reserve meeting due later in the day. But despite the dollar’s rebound, market strategists remain downbeat about the prospects of the greenback in the near term on concerns that future U.S. rate hikes were broadly priced into the markets. “From a basis, there is very little going on for the dollar from current levels as we are seeing the continuation of very easy financial conditions with accompanying fiscal stimulus,” said Timothy Graf, head of macro strategy for EMEA at State Street Global Markets referring to the dollar’s trade-weighted basket against its rivals by its popular acronym. Evidence of easy financial conditions were evident with real interest rates in the U.S. holding near their lowest in nearly five years, according to Thomson Reuters data. The greenback bounced 0.3 percent on the day to 92.10 after falling 2.5 percent over the last three weeks. On an annual basis, 017 was the biggest annual drop for the greenback in 14 years.