Global stocks tumbled for a sixth day on Thursday as another plunge in Chinese shares and oil prices and further weakness in China’s currency rattled investors. The MSCI world stock index fell 1 percent to hit a 3-month low.
China’s stock markets were suspended for the second time this week after shares declined more than 7 percent in the first 30 minutes of trading, triggering a new circuit-breaker system. Brent oil sank below $33 a barrel for the first time since April 2004 in a continuation of the oil price rout on Thursday.
The People’s Bank of China set the official reference rate on the yuan 0.5 percent weaker at 6.5656 per dollar, the lowest since March 2011, driving the onshore yuan down to its weakest level against the dollar since January 2011.
China’s foreign exchange reserves fell $108 billion in December to $3.33 trillion, posting the steepest monthly decline ever and sliding overall to their lowest level in nearly three years. Reserves plunged by $513 billion in 2015, recording the first yearly decline since 1992. China’s reserves surged almost 200-fold from just $21.2 billion in 1993 to a peak of nearly $4 trillion in 2014.
U.S. jobless claims fell to 277,000 in the week that ended January 2, 10,000 lower than the previous week but slightly above expectations. Announced corporate layoffs (as compiled by Challenger) were 24 percent lower in December than in November, declining to 23,622 and reaching the lowest level since 2000.
The unemployment rate in the Euro Area decreased to 10.5 percent (sa) in November from 10.7 percent in October, ahead of expectations. Unemployment was at the lowest level since October 2011. Germany had the lowest rate at 4.5 percent. Greece had the highest rate at 24.6 percent, but unemployment continues to ease.
Australia’s trade deficit narrowed to $2.9 billion in November, 11 percent less than in October and smaller than expected. Exports of goods and services rose by 1 percent (m/m, sa) led by agricultural products, while imports fell by 1 percent, mainly due to lower purchases of intermediate goods.
Europe and Central Asia
The National Bank of Romania kept its benchmark rate on hold at 1.75 percent, as widely expected. The minimum reserve requirements ratio on foreign exchange-denominated liabilities of credit institutions was also cut to 12 percent from 14 percent.
Latin America and the Caribbean
Consumer prices in Mexico increased 2.1 percent (y/y) in December, slowing from a 2.2 percent rise in November and the lowest inflation rate on record. The central bank of Mexico said it expected the inflation to end the year around 2 percent, before rising to near the bank’s 3 percent target in 2016.
Ghana will issue a 3-year bond to raise 500 million cedis ($131 million) on Thursday to restructure debt and fund government projects, the central bank said on Tuesday. Proceeds from the bond, which is open to offshore investors, will be used to settle maturing papers, the bank said in a statement.
source: The Global Daily