Financial Markets…The perceived default risk of European corporate debt fell by the most in more than weeks on U.S. fiscal cliff optimism, with the Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly speculative credit ratings dropping 29 basis points to 537 bps.
The MSCI Emerging Market stock index advanced for the first time in eight trading sessions, gaining 0.6% and bouncing back from the gauge’s lowest close in 10 weeks, amid optimism that U.S. lawmakers will resolve the budget impasse. Russia’s Micex Index rose 1.1%, the most gain in a month, and both Brazil’s Bovespa index and South Korea’s Kospi index gained 0.9%.
Turkey raised a record 4.51 billion lira ($2.5 billion) in secondary public offering of Turkiye Halk Bankasi AS, the nation’s biggest state lender, drawing interests from foreign investors including Singapore’s government wealth fund. The Turkish government sold 299 million shares of the state-owned bank, or 24% of its capital, at a price of 15.1 liras per share.
High-income Economies…US existing home sales rose 2.1% (m/m) in October to an annual rate of 4.79 million units (10.9% y/y), in signs that low interest rates and an improvement in the labor market in recent months are continuing to help the housing sector recovery. This bodes well for GDP growth in the fourth quarter as residential fixed investment led an acceleration in GDP growth in Q3. The median price for a home resale climbed 11.1% (y/y) to $178,600 in October, and the NAHB homebuilders’ confidence index climbed to a six-year high of 46 in November from 42 in October.
Italy's industrial orders fell 4.0% (m/m) in September and declined 12.8% (y/y), the thirteenth year-on-year decline in a row. A steep 7.4% (m/m) fall in orders from abroad, reflecting weakening demand from Euro Area trade-partner countries, exacerbated a 1.4% (m/m) decline in orders from within Italy, as the country struggles to come out of a recession amid cuts in spending and austerity measures.
Israel's GDP growth slowed to an annualized 2.9% in the third quarter of 2012, the weakest rate in more than three years, from 3.4% in the second quarter. Exports of goods and services, which account for more than 40% of Israel's economic activity, fell 5.4%, the first decline since the fourth quarter of 2011, in the face of recession in the Eurozone and slower growth in Asia.
Hong Kong’s unemployment rate rose modestly to 3.4% in the three-month period ended October from 3.3% in July-September, as a weakening local economy and slowing external demand slowed the pace of job creation.
Developing Economies…Chile's economic growth slowed slightly in the third quarter to 1.4% (q/q) versus 2.0% in the second quarter on weak external demand and declining copper prices. On an annual basis, Chile grew at 5.7% in both quarters.
Thailand’s growth slowed in the third quarter to 3% (y/y) (1.2% q/q) after expanding a revised 4.4% (2.8% q/q) in the second quarter on weak external demand, but supported by policy measures to stimulate domestic demand. The government lowered its growth forecast for 2012 to 5.5% from previously forecast 5.5%-6%.