Overseas Headlines – January 05, 2017


Jobless claims fall to near 43-year low
Jan 5 The number of Americans filing for unemployment benefits fell to near a 43 year-low last week, pointing to further tightening in the labour market. Initial claims for state unemployment benefits dropped 28,000 to a seasonally adjusted 235,000 for the week ended Dec. 31, the Labour Department said on Thursday. That was close to the 233,000 touched in mid-November, which was the lowest level since November 1973. Claims for the prior week were revised to show 2,000 fewer applications received than previously reported. But with claims data for six states and one territory estimated because of the New Year’s holiday, last week’s drop likely exaggerates the labour market’s strength.


Bears Scramble for Yuan as China Chokes Flows, Aids Currency
China’s efforts to choke capital outflows are beginning to pay off, with the offshore yuan surging the most on record as traders scrambled for a currency that’s becoming increasingly scarce outside the nation’s borders. The yuan gained 0.5 percent at 6:48 p.m. in Hong Kong, taking its two-day move to 1.8 percent, poised for its biggest gain in data going back to 2010. The overnight deposit rate in the city rose as high as a record 100 percent, while the spread between the offshore and onshore exchange rates reached the widest since 2010. Bloomberg News earlier reported Chinese policy makers were encouraging state-owned enterprises to sell foreign currency.


U.K. Economy Maintains Solid Growth Momentum as Services Surge
The U.K.’s services sector unexpectedly grew at the fastest pace in more than a year in December, reinforcing the economy’s strength at the end of 2016. A measure of the biggest part of the economy rose to 56.2 from 55.2, according to IHS Markit’s Purchasing Managers Index. That’s well above the 54.7 forecast by economists and the 50-mark that divides expansion from contraction. Together with reports on manufacturing and construction, Markit said the figures point to U.K. economic growth of 0.5 percent in the fourth quarter, close to the pace recorded in the previous three months. While the latest surveys paint a picture of an economy showing continued resilience to the June vote to leave the European Union, there are risks on the horizon. Business sentiment among services companies remains below its long-run average, with respondents citing Brexit and upcoming European elections as sources of uncertainty.

South America:

Argentina ends holding period for foreign capital
Jan 5 Argentina’s government did away with a required holding period for foreign capital in a decree published in the official gazette on Thursday, a measure aimed at attracting investment with the country mired in recession. Previously, investors had to wait 120 days to access funds they had moved into Latin America’s No. 3 economy. The measure was one of the first adopted by Treasury Minister Nicolas Dujovne, who took office this week a year into centre-right President Mauricio Macri’s term. Former Finance Minister Alfonso Prat-Gay had decreased the mandatory holding period from 365 days but not eliminated it.