Market Review – Fundamental Perspective 7 November 2017

US numbers ended the week on a disappointing note, as payrolls and wage growth missed their forecasts. After a decline in September, a result of the hurricanes which battered the US, nonfarm payrolls rebounded sharply with a reading of 261 thousand. This was a respectable number, but still fell short of the forecast of 312 thousand. Wage growth also disappointed, slowing to 0.0%, short of the estimate of 0.2%. This marked the first time in 2017 that wage growth did not increase, underlining persistent weak inflation. Although Fed Chair Yellen and other Fed policymakers have expressed confidence that inflation levels will rise, this is still yet to occur, despite strong growth and a labor market at capacity.
European equities trade with small losses in this week's opening session. US stock markets opened narrowly mixed.
Bill Dudley, the influential head of the NY Fed, announced plans to retire next year before his term expires. Mr Dudley is planning the mid-2018 retirement to "ensure that a successor is in place well before the end of his term" in January 2019, the regional branch of the central bank said.
Donald Trump accused Japan of engaging in unfair trade practices on the first leg of his five-nation Asia tour, during which the American president will focus on improving the US trade balance and efforts to press North Korea to give up its nuclear weapons.
Just one in seven people from Catalonia believe the current standoff between Barcelona and Madrid will end in independence for the region while more than two thirds think the process has been bad for the economy, a survey showed.
German industrial orders rose unexpectedly in September (1% M/M), driven by strong demand from other euro zone countries for capital goods including machines and vehicles, suggesting the economy will extend its solid upswing into the coming months.

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