Value of Canada building permits down 14.6% in October - Reuters News

Nov 30 (Reuters) - The value of Canadian building permits fell by 14.6% in October from September, Statistics Canada said on Monday.

The residential sector saw lower intentions for both the single-family and multi-family components, while all three components in the non-residential sector also declined. The value of building permits were down in six provinces, with Ontario recording the largest decrease.

Month on month (%)

                    Oct  Sep(rev)  Sep(prev)

Total            -14.6   +18.6     +17.0

Residential       -5.9    +6.6      +6.9

Nonresidential   -29.5   +46.7     +40.6

NOTE: Analysts had on average forecast a decline of 5.0% in October. All figures are seasonally adjusted.

Canada October producer prices down 0.4% on lumber - Reuters News

Nov 30(Reuters) - Producer prices in Canada fell by 0.4% in October from September on lower prices for lumber and wood products, Statistics Canada said on Monday.

The decline followed a revised 0.6% increase in September. Raw materials prices were up 0.5% in October, and were down 0.3% on the year.

INDUSTRIAL PRODUCT PRICES (pct change)

                        Month-on-month             Year-on-year

                   Oct   Sep(rev)  Sep(prev)    Oct   Sep(rev)  Oct(prev)

total            -0.4    +0.6      -0.1       +0.7    +1.1      -2.2

ex energy/petrol -0.5    +1.2      +0.3       +4.4    +4.8      +1.8

RAW MATERIALS PRICE INDEX (pct change)

                        Month-on-month             Year-on-year

                   Oct   Sep(rev)  Sep(prev)    Oct   Sep(rev)  Oct(prev)

total            +0.5    -1.8      -2.2       -0.3    -2.8      -9.4

ex crude energy  +0.5     0.0      +0.3      +13.7   +13.6      +9.0

Canada Q3 current account deficit widens to C$7.53 billion - Reuters News

Nov 30 (Reuters) - Canada's current account deficit widened to C$7.53 billion ($5.82 billion) in the third quarter from a revised C$7.00 billion deficit in the second quarter, on a larger trade deficit on goods and services, Statistics Canada said on Monday.

Seasonally adjusted figures in billions of Canadian dollars:

                          Q3 2020  Q2(Rev)  Q2(Prev)   Q3 2019

    Current Account        -7.528   -6.998    -8.626   -11.425

    Goods                  -8.781   -8.190    -7.688    -3.519

    Services               +0.593   +0.735    -0.171    -4.692

    Investment Income      +2.597   +2.160    +0.726    -0.474

NOTE: Analysts had on average forecast a current account deficit of C$9.10 billion for the third quarter of 2020. Figures are seasonally adjusted.

U.S. pending home sales unexpectedly fall in October - Reuters News

WASHINGTON, Nov 30 (Reuters) - Contracts to buy U.S. previously owned homes fell for a second straight month in October as an acute shortage of properties pushed up prices, though the housing market remains supported by record low mortgage rates.

The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, decreased 1.1% to 128.9. Economists polled by Reuters had forecast pending home contracts, which become sales after a month or two, would rebound 1.0% in October.

Compared to a year ago, pending homes sales jumped 20.2% in October. The monthly decline in contracts suggests a moderation in sales of existing home sales after they accelerated in October to their highest level since November 2005.

The housing market is being driven by record low mortgage rates. The COVID-19 pandemic, which has seen at least 21% of the labor force working from home, has led to a migration from city centers to suburbs and other low-density areas as Americans seek out more spacious accommodation for home offices and schools.

The coronavirus recession, which started in February, has disproportionately affected lower-wage earners. At least 20 million people are on unemployment benefits. The 30-year fixed mortgage rate is around an average 2.72%, according to data from mortgage finance agency Freddie Mac.

Housing supply has failed to keep up with demand, boosting home prices out of the reach of many first-time buyers, despite builders ramping up construction. The government reported this month that single-family homebuilding, the largest share of the housing market, raced to the highest level since April 2007.

Though homebuilder confidence is at historic highs, builders have complained about shortages of land and materials.

In October, pending home sales edged up 0.1% in the South. They were unchanged in the West. Contracts dropped 5.9% in the Northeast and fell 0.7% in the Midwest.

China's factory activity expands at fastest pace in over 3 years - Reuters News

• Manufacturing PMI for November rises, beats expectations
• Services PMI at 8-year high
• China blue-chip stocks at 5-1/2 year high after data

By Stella Qiu and Ryan Woo

BEIJING, Nov 30 (Reuters) - China's factory activity expanded at the fastest pace in more than three years in November, while growth in the services sector also hit a multi-year high, as the country's economic recovery from the coronavirus pandemic stepped up.

Upbeat data released on Monday suggests the world's second-largest economy is on track to become the first to completely shake off the drag from widespread industry shutdowns, with recent production data showing manufacturing now at pre-pandemic levels. (Full Story)

China's official manufacturing Purchasing Manager's Index (PMI) CNPMIN=ECI rose to 52.1 in November from 51.4 in October, data from the National Bureau of Statistics showed. It was the highest PMI reading since September 2017 and remained above the 50-point mark that separates growth from contraction on a monthly basis. It was also higher than the 51.5 median forecast in a Reuters poll of analysts.

"The rise in November manufacturing PMI, with broad-based improvements across the sub-indices, suggest the recovery momentum in the industrial sector has become more certain," Zhang Liqun, analyst at China Federation of Logistics & Purchasing.

"But the results also showed inadequate demand is still a common issue facing firms. We need to consolidate the policy support aimed to expand domestic demand."

https://fingfx.thomsonreuters.com/gfx/ce/nmopadrzova/ChinaPMINov2020.png

China's blue-chip stock market index .CSI300 hit a 5-1/2 year high following the brisk data. (Full Story)

The robust headline PMI points to solid fourth-quarter growth, which analysts at Nomura expect to quicken to 5.7% year-on-year, from 4.9% in the third quarter, an impressive turnaround from the deep contraction earlier this year.

The economy is expected to expand around 2% for the full year, the weakest in over three decades but still much stronger than other major economies that are struggling to bring their coronavirus outbreaks under control. (Full Story)

The official PMI, which largely focuses on big and state-owned firms, showed the sub-index for new export orders stood at 51.5 in November, improving from 51.0 a month earlier. That bodes well for the export sector, which has benefited from strong foreign demand for medical supplies and electronics products.

Also helping activity in November were strong e-commerce shopping promotions, which unleashed solid consumer demand and bolstered confidence for small and medium firms. (Full Story)

But a surging yuan and further lockdowns in many of its key trading partners could pressure Chinese exports, which have been surprisingly resilient so far. (Full Story)

More companies have reported the impact from currency fluctuations, compared with a month ago, said Zhao Qinghe, senior statistician at the NBS.

"Some firms have flagged that as the yuan continues to rise, corporate profits are under pressure and export orders are declining," said Zhao.

He added the recovery across the manufacturing industry remained uneven. For example, the PMI for the textile industry has stayed below the 50-point threshold, pointing to weak business activity.

 

CONSUMER COMEBACK

In the services sector, activity expanded for the ninth straight month. The official non-manufacturing Purchasing Managers' Index (PMI) rose to 56.4, the fastest since June 2012 and up from 56.2 in October, as consumer confidence gathered pace amid few COVID-19 infections.

Railway and air transportation, telecommunication and satellite transmission services and the financial industry were among the best performing sectors in November. (Full Story)

A sub-index for construction activity stood at 60.5 in November, improving from 59.8 in October, as China steps up infrastructure spending to revive its economy.

Monday's data also showed the labour market is still facing strains. Services firms reduced payrolls at a faster clip in November, data showed, while factories slashed staff for the seventh straight month, although at a slower pace.

"The continued recovery reduces the need for further monetary easing, but any shift to tightening is also unlikely given continued labour market pressure," said Erin Xin, Greater China economist at HSBC.

German inflation falls deeper into negative territory after VAT cut - Reuters News

BERLIN, Nov 30 (Reuters) - German annual consumer prices fell further in November, pushed down by a VAT cut introduced as part of the government's stimulus push to help Europe's largest economy recover from the coronavirus shock, data showed on Monday.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, fell 0.7% year-on-year after shrinking by 0.5% in the previous month, the Federal Statistics Office said.

November's preliminary data compared with a Reuters poll forecast of a 0.5% decline.

"The inflation rate is influenced, among other things, by the reduction in value-added tax that came into force on July 1, 2020," the office said in a statement.

On the month, harmonised prices fell 1.0%. The Reuters consensus forecast was a fall of 0.8%.

The European Central Bank, which has a target of keeping inflation close to but below 2% in the euro zone, is preparing a new stimulus package to help cushion the impact of the coronavirus pandemic.

The ECB's chief economist warned last Thursday that accepting "a longer phase of even lower inflation" would hurt consumption and investment as well as cementing expectations of low price growth in the future. (Full Story)

The euro zone's central bank has kept the money taps wide open for years and promised to announce further stimulus, probably in the form of even more bond purchases and subsidised loans to banks, at its Dec. 10 meeting.