The S&P 500 advanced 0.5% to 1,679.91 in the morning trading in New York. The index has gained for six straight days, the most since July 15. The Stoxx Europe 600 Index rallied 1.3% to 309.75 in the afternoon in London, the highest level since May 22. The gauge has surged 11% this year as central banks around the world maintained stimulus measures and the global economy showed signs of recovery. Rising for a ninth consecutive day, the FTSE Asia Pacific index extended its longest run of gains for nine months to climb 1.2% while the Australian dollar, a commodity currency heavily dependent on Chinese economic progress, rose 0.6% to US$0.9283, reaching its highest levels since late July.
High Income Economies…Unemployment in the 34 OECD countries fell slightly in July to 7.9% from 8.0% in June, with the euro area staying stubbornly static at 12.1%. It was the fifth successive month the jobless rate in the euro zone covering 17 countries had stayed the same. Overall, 47.9m people were unemployed in the OECD area in July, 0.4m less than in June, but still 13.2m more than in July 2008.
The Austrian economy expanded 0.1% (q/q sa) in Q2, unchanged from Q1. The revised estimate is less than the mid-August estimate of 0.2% for Q2. Similarly, the annual growth for Q2 was lowered to 0.2% (y/y sa) from 0.3%. In annualized terms, GDP grew 0.4% (q/q saar) in Q2, compared to 0.3% for Q1. Quarter-on-quarter, household consumption remained flat, government spending and exports gained, while investment and imports declined.
Following a decline of 0.6% (q/q sa) for Q1, Italy’s GDP declined by 0.3% (q/q sa) in Q2, which is 0.1 percentage point more than initially estimated in August. In annualized terms, GDP contracted 1.2% (q/q saar) in Q2, compared to a contraction of 2.4% (q/q saar) for Q1. Consumer spending declined 0.4% (q/q sa), with exports increasing 1.2% (q/q sa).
Developing Economies…East Asia and Pacific: China’s industrial production strengthened in August, rising 10.4% (y/y, sa) from 9.4% in the previous year. The expansion was broad-based with 39 of 41 industries, including ferrous metals, chemicals, and steel sectors posting significant gains. At the same time retails sales and urban investment also expanded, growing 13.4% (y/y) and 20.3% (y/y) over the previous year, respectively.
Europe and Central Asia: Turkey’s GDP rebounded strongly in the second quarter with a 4.4% (y/y, sa) growth, up from 2.9% in the previous quarter. Consumer spending, which increased by 5.3% (y/y) was a key driver of the improved growth performance, adding to government spending and gross fixed capital formation, which expended by 7.4% (y/y) and 3.7% (y/y) respectively.
Bulgaria’s industrial production declined for the fifth consecutive month in July, dropping 2.6% (y/y), but less than the 4.6% (y/y) fall in June. Declining output in mining and quarrying, electricity and gas contributed to the fall in industrial production. However, manufacturing output rose 1.2% (y/y) reversing a 4.7% (y/y/) decline in the previous year.
South Asia: India’s trade deficit narrowed to US$10.9bn (y/y) in August from US$14.17bn in the previous year. In July, the trade deficit was US$12.27bn. A decline in gold demand, which fell to US$650 million in August from US$2.20bn in July, and an increase in exports to US$26.14 billion from US$25.83 billion led to the improvement in the trade deficit.
Sub-Saharan Africa: South Africa’s current account deficit widened to 6.5% of GDP in the second quarter, up from 5.8% of GDP in the previous quarter. The deficits on trade balance as well as on net service, income and current transfer accounts rose, the latter reflecting declining dividend receipts from the rest of the world.