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Euro-area government bonds advanced on Wednesday, pushing German 2-year debt yield to a record low, as the growing prospect of further monetary stimulus by the European Central Bank overshadowed political risks in individual countries.

Spain’s 10-year bond yield slid 4 basis points (bps) to 1.83 percent, while the yield on similar-maturity Portuguese securities fell 3 bps to 2.75 percent, down from a nearly 4-month high of 2.19 percent reached on Monday.  Meanwhile, the German 2-year yield hit another record low, falling slightly to minus 0.37 percent.

Egypt’s central bank strengthened the country’s currency, injecting U.S. dollars into a banking system that has been suffering from an acute foreign exchange shortage for months.

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The Egyptian pound climbed 2.6 percent to 7.83 per dollar in afternoon trading.  The move came as a surprise to investors, who see the pound as overvalued and had been expecting it to be further depreciated.

High Income Economies

Applications for house mortgages in the U.S. fell by 1.3 percent in the first week of November, after decreasing by 0.8 percent the previous week, as financing costs rise.  Fixed 30-year mortgage rates have been increasing in recent weeks, reaching 4.12 percent in the first week of November, compared with 3.95 in mid-October.

The U.K. labor market continues to strengthen. Unemployment fell to 5.3 percent in Q3, from 5.4 percent in Q2, reaching the lowest jobless rate since 2008.  The employment rate increased to 73.7 percent, the highest since records began in 1971.  Earnings of workers, including bonuses, also increased, rising by 3 percent in Q3 (y/y).

The unemployment rate in South Korea fell to 3.4 percent in October (sa), compared with 3.5 percent in September.

The result was better than expectations and provides further indication that the South Korean economy has recovered from the Middle East Respiratory Syndrome scare earlier in 2015.

East Asia and Pacific: China’s industrial production growth slowed unexpectedly to a 6-month low of 5.6 percent (y/y) in October, after increasing 5.7 percent in September.  Meanwhile, retail sales edged up to 11 percent in October from 10.9 percent in September. This was the fastest growth seen so far this year.

Europe and Central Asia: Turkey’s current account surplus unexpectedly rose to $95.0 million in September from a revised $27.0 million in August. Economists had expected a $0.08 billion shortfall for the month.

The goods trade deficit narrowed to $2.5 billion in September from $3.7 billion in the preceding month. Meanwhile, the surplus on services trade grew to $918 million from $531 million.

Sub-Saharan Africa: Consumer prices in Ghana increased by 17.40 percent (y/y) in October, the same as in September, as more stability in the cedi exchange rate lowered import prices.

Price increases were led by those for education (28.8 percent) and those for recreation and culture (29.9 percent).  On a monthly basis, consumer prices increased 2.70, compared to a 0.1 percent drop in September.

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