Daily update
Daily update
- Hamas’ attacks in Israel weakened the shekel and increased oil prices. The Bank of Israel pledged to intervene in the foreign exchange markets and provide dollar liquidity to domestic banks. There is little sign of a broad safe-haven bid for the dollar, at this stage. Investors’ concerns about an escalation of the conflict to include Iran have prompted oil price moves.
- China returned from the Golden Week holidays with domestic consumer spending only slightly higher than in the same period in 2019. People are keen to socialize (hence somewhat higher travel volumes) but are cautious in their spending. This pattern was seen in earlier holiday periods.
- US employment data was strong (establishment survey) or mediocre (household survey). Somewhat hidden by the employment data was the report of a meaningful rise in credit card interest rates. Citigroup signalled a near-11% fall in September credit card spending, the fifth consecutive decline. Weaker credit card use is likely to hurt consumption by low income groups, rather than middle income groups.
- German elections in Hesse and Bavaria saw increased support for the opposition centre-right parties. The far-right AfD group also gained votes. Votes against government parties probably reflect unhappiness with economic conditions. A global trend towards economic nationalism favors more extreme parties.
