NEW$ & VIEW$ (22 NOVEMBER 2012)


The China and Eurozone flash PMI for November, out this morning, were covered separately. China’s was better while the Eurozone is clearly sinking deeper into recession.


Smile  U.S. Leading Economic Indicators Rose 0.2% in October

No recession in sight…at least before the fiscal cliff!

The Conference Board LEI for the U.S. increased for the second consecutive month in October. Positive contributions from the interest rate spread, the Leading Credit Index™ (inverted) and initial claims for unemployment insurance (inverted) offset the negative contributions from building permits, consumer expectations for business conditions and the ISM® new orders index. In the six-month period ending October 2012, the leading economic index increased 0.5 percent (about a 1.0 percent annual rate), much slower than the growth of 1.8 percent (about a 3.7 percent annual rate) during the previous six months. The strengths and weaknesses among the leading indicators remain equally balanced.


The YoY change in the LEI is also a good warning indicator. Here’s Doug Short charts:

Here is a look at the rate of change, which gives a closer look at behavior of the index in relation to recessions.

Click to View

Click to View

SNB’s Zurbruegg Says Franc Celing Is an Extreme Measure  Swiss National Bank Governing Board member Fritz Zurbruegg said the franc ceiling is an extreme measure that carries “considerable” risks.

Since the introduction of the minimum exchange rate, the SNB has piled up unprecedented currency holdings to defend the ceiling. While reserves fell last month, they still amount to almost 70 percent of Switzerland’s gross domestic product.

“The excessive appreciation of the Swiss franc is a monetary problem, because it carries the risk of deflation,” Zurbruegg said.


Leave a Reply

Your email address will not be published. Required fields are marked *