Against the Grain

There was a tidal wave of economic data but the only one that counted was Aug US employment, the nonfarm payrolls down 54 k (Jul revised to -54 k from -131 k), unemployment 9.6% (9.5%), average weekly hours unchanged 34.2 and average weekly earnings up 0.2% (0.2%). Private payroll rose 67 k better than expected (107 k) as manufacturing payroll fell 27 k (34 k), service providers off 54 k and retail 5 k and construction rose 19 k. In its present mood the market saw this as very satisfactory.

Trailing behind came Aug service industry PMI data Australia 47.5 (46.6) below 50 means the sector is contracting, Italy 51.4 (49.6); France 60.4 (61.1); Germany 57.2 (56.5); Euroland 55.9 (55.8) the regions composite index 56.2 (56.7); UK 51.3 (53.1) and US non manufacturing PMI 51.5 (54).

Asian trading was quiet as the week’s economic numbers reached their crescendo when the US opens. The weekly Shanghai warehouse stocks had cu down 4665 tonnes at 105,917; al off 176 tonnes at 490,589 tonnes and zn rose 4472 tonnes at 236,040. The LME stocks all declined again led by al except sn. On the week cu fell 2.5 k, al off 19 k, zn fell 1 k, pb rose 350 tonnes, ni up 1494 tonnes and sn dipped 25 tonnes. Overnight the mining M&A juggernaut rolled on as Goldcorp agreed to buy Andean Resources in a US$ 3.4 billion deal, Bloomberg reports 290 gold deals this year worth US$ 38.4 billion. The employment data saw the metals jump and gold dive (1239), though the last figure of week dampened things down.

The Jul Euroland retail sales rose 0.1%, less than expected (0.2%) yoy 1.1% (1.2%). The jaw, jaw on the US economy will continue next week as President Obama is scheduled to propose new measures to boost growth. There is a new banking crisis but it is not shaking the world, in Afghanistan Kabul Bank an institution owned by relations and friends of the President is suffering a run on it, as a report says most Afghans do not keep their money in the banking system. While the President blames the West.

US is on holiday Mon be offer the usual cautionary note.