Overseas Headlines – January 09, 2018


Euro-Area Jobless Rate Drops to Lowest Level in Almost 9 Years

Joblessness in the euro area declined to the lowest level since early 2009 last month as the labor market continued to benefit from a resurgent economy growing the fastest in a decade. The unemployment rate dropped to 8.7 percent in November from 8.8 percent the previous month, according to a report from Eurostat on Tuesday. The reading matches the median of 34 estimates in a Bloomberg survey. After a bleak period beset with bank failures, record joblessness and a sovereign-debt crisis that jeopardized the currency union and triggered unprecedented stimulus by the European Central Bank, the region’s economy has returned to health. Economic growth last year was probably the quickest in a decade, and the pace of expansion in 2018 is forecast to be almost as fast.




U.S. 10-Year Yield Climbs as BOJ Action Spurs Exit Talk

The 10-year U.S. Treasury yield climbed to the highest in more than nine months on Tuesday following a surprise cut in purchases of long-dated Japanese government bonds by the Bank of Japan. Benchmark U.S. bond yields crossed 2.50 percent, levels last seen in March, after Japan’s action spurred speculation the nation’s central bank may soon exit its ultra-accommodative stance, even though BOJ watchers said the actions shouldn’t be misread as an imminent shift. A glut of looming bond supply from the U.S., the U.K., Japan and Germany also spurred investors to seek higher yields. “I would blame the move on spillovers from JGB and bund markets, a lot of supply hitting the euro area government and SSA market,” said Martin van Vliet, a senior interest-rate strategist at ING Bank NV.




China December forex reserves rise to $3.14 trillion, highest since September 2016

China’s foreign exchange reserves rose to their highest in more than a year in December, blowing past economists’ estimates, as tight regulations and a strong yuan continued to discourage capital outflows, central bank data showed on Sunday. Notching up their 11th straight month of gains, reserves rose $20.2 billion in December to $3.14 trillion, the highest since September 2016 and the biggest monthly increase since July. That compares with an increase of $10 billion in November. Economists polled by Reuters had expected reserves to rise by $6 billion to $3.125 trillion. Capital flight had been seen as a major risk for China at the start of 2017, but a combination of tighter capital controls and a faltering dollar helped the yuan stage a strong turnaround, bolstering confidence in the economy. The yuan rose around 6.8 percent against the greenback in 2017, recovering from a 6.5 percent loss in 2016 and reversing three straight years of depreciation.