US Consumer Credit Rises Less, Below Expectations

By Xinyang December 7, 2016


News Event

From Trading Economics: Consumer credit in the United States increased by $16.02 billion in October of 2016, following an upwardly revised $21.8 billion rise in September and below market expectations of $19 billion. Non-revolving credit rose by $13.68 billion, after increasing by $17.7 billion in the previous month and revolving credit went up by $2.33 billion, compared with a $4.09 billion rise in September. Consumer Credit in the United States averaged 4.63 USD Billion from 1950 until 2016, reaching an all time high of 115 USD Billion in December of 2010 and a record low of -18 USD Billion in June of 2009.

Market Opening Wrap

In European Equity Markets stocks climbed on Wednesday, with the regional banking index hitting an 11-month peak after Credit Suisse announced further cost cuts and Italian banks rose in their best two-day run since mid-2011. The STOXX Europe 600 Banks index was up 2.3 percent after touching its highest level since January, supported by an 7.4 percent rise in Credit Suisse after the Swiss bank announced more than 1 billion Swiss francs ($991 million) in extra cost cuts. The pan-European STOXX 600 rose 0.9 percent, at its highest since end-September. Healthcare stocks fell 1 percent after U.S. President-elect Donald Trump said he would "bring down drug prices."

In Currency Markets the euro gained slightly on the dollar on Wednesday as investors focused on Thursday's ECB meeting for possible indications on when the central bank may begin paring bond purchases under its quantitative easing program. The euro was last up 0.25 percent against the dollar, at $1.0744, after hitting a three-week high of $1.0796 on Monday. The dollar was flat at 113.96 yen.  Sterling fell as much as 0.8 percent to hit a one-week low of 85.255 pence against the euro after data showed British industrial output suffered its biggest monthly fall in more than four years. The Australian dollar fell as low $0.7411 before retracing losses after data showed Australia's economy shrank 0.5 percent last quarter, the largest decline since 2008.

In Commodities Markets oil prices eased on Wednesday on bearish U.S. petroleum inventory data and doubts that production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years. Brent futures were down 0.9 percent, at $53.47 a barrel. U.S. crude fell 1.2 percent, to $50.34 per barrel. The U.S. Energy Information Administration said crude inventories fell 2.4 million barrels during the week ended Dec. 2, which was more than the 1 million-barrel draw analysts forecast. Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures, however, increased by a hefty 3.8 million barrels last week, the most since 2009, the data showed.

In US Equity Markets  the S&P 500 and the Dow hit record intraday highs on Wednesday, helped by gains in bank stocks, but President-elect Donald Trump's comments on drug prices slammed the healthcare sector, pulling down the Nasdaq. The Dow Jones industrial average was up 0.08 percent, at 19,267.02. The S&P 500 was up 0.09 percent, at 2,214.25 and the Nasdaq Composite was down 0.04 percent, at 5,330.74. Pfizer's shares fell 2.7 percent after Britain's competition watchdog fined the drugmaker $107 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent.  Western Digital rose 4.8 percent after the data storage maker raised its second-quarter profit and revenue forecasts.

In Bond Markets prices on longer-dated U.S. Treasuries extended their earlier rise on Wednesday following a large block purchase of 10-year Treasury note futures in the wake of disappointing overseas data that pushed foreign yields lower. Benchmark 10-year Treasury notes were up 12/32 in price to yield 2.351 percent, down 4.5 basis points from late on Tuesday. Germany's 10-year bond yield fell three basis points to 0.33 percent, after climbing to 0.38 percent, the highest since Nov. 14.


Source: Institute of Trading and Portfolio Management
By Xinyang December 7, 2016

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