The decline of risk appetite was evident in the government bond markets as German yields sank 6 basis points to 1.98% while 10-year US Treasuries yields slipped 4bp to 2.88%.
High Income Economies… Eurozone industrial production fell 1.5 (m/m sa) in July, marking a sharp deterioration from June's 0.6% growth. On a three-month annualized basis, IP fell by 1.0% (3m/3m saar), compared to a 2.2% increase for June. The decline was led by widespread weakness across sub-sectors, with capital goods having the sharpest fall of 2.6% (m/m sa), and durable consumer goods with a 2.2% (m/m sa) contraction. Among member states, the largest decreases were in Ireland, Malta, Portugal, Greece and Germany, and the biggest increases in Lithuania, Denmark, Estonia and Finland.
For the week ending September 7th, US jobless claims unexpectedly fell 31,000 from the previous week to 292,000, which was a seven-year low. However, the decrease was largely attributed to technical issues in two states that failed to report all of their claims while upgrading their computer systems.
The unemployment rate in Australia increased from 5.7% in both June and July to a four-year high of 5.8% in August, which just shy of the post-financial-crisis high of 5.9% in 2009. Total employment dropped by 10,800 in August, with full-time workers falling by 2,600, and part-time workers decreasing by 8,200. The unexpected increase is attributed to a mining slowdown with the mining state of Western Australia leading the latest rise with its jobless rate increasing to 5.0% from 4.6%.
Developing Economies…East Asia and Pacific: Indonesia’s central bank raised its key benchmark interest rate for the fourth consecutive time, increasing it by a quarter points to 7.25% in an effort to shore up its currency. This move follows last month’s half a percentage point increase. The overnight deposit rate was also raised by a quarter points to 5.50% from 5.25%.
By contrast, the Philippines’ central bank kept its key benchmark policy rates, the reverse repurchase and repurchase rate, unchanged at 3.5% and 5.5% respectively.
Europe and Central Asia: Turkey’s current account deficit for July widened to US$5.786bn (y/y) from US$4.065bn, bringing the total current account deficit since January to US$42.099bn compared with US$34.604 in the previous year. The increase in the current account deficit was driven by the foreign trade deficit, which rose to US$48.604bn (y/y) from US$40.962bn.
Serbia’s annual headline inflation eased further in August. The consumer price index was up 7.3% (y/y) compared with 8.6% in July, marking a fifth consecutive decline since May. However, consumer price inflation remains higher than the central bank’s target of 6% for 2013.
Latin America and the Caribbean: Brazil’s retail sales volume accelerated in July, rising 1.9% (m/m, sa) from 0.4% in June. On an annual basis, retail sales grew 6% (y/y) in July from 1.7% (y/y) in June. This gain was driven by textiles, clothing and footwear, office equipment, computer and communication equipment, and furniture and household appliances.
South Asia: India’s industrial production rose 2.6% (y/y) in July, ending consecutive declines of 2.8% (y/y) in May and 2.2% (y/y) in June, owing to output growth in the manufacturing and electricity sectors, which rose 3% (y/y) and 5.2% (y/y) respectively; while mining output declined 2.3% (y/y).