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Macro Kickoff: Circus G-20 comes to town

The world is all geared up for the circus that is the G-20 summit. There will be plenty of arguing, of course, but we won’t be surprised if Seoul’s hotel and restuarant industry is the only winner when all is said and done. The US has just implemented a currency manipulation programme if its own - it's called QE - while China is likely to keep a low profile. Perhaps we should once again look for the Germans to spice things up?

On the day, the calendar does not come much lighter than this. Due to today being Veterans Day, we got the US jobless claims report yesterday, which was an improvement on last week’s report.  

A whole host of data came out of China in the Asian session, which mostly surprised to the upside, including inflation, which rose to 4.4% year-on-year in October from 3.6% a month earlier. That should perhaps not come as a total shock following yesterday’s decision by Chinese authorities to raise the reserve requirements yet again.

 Elsewhere in the east, Australia produced a robust employment report for October, which lends support to the RBA’s decision last week to raise the target rate by 25bps to 4.75%. The unemployment rate rose unexpectedly to 5.4% from 5.1% but a further 29.7K became employed. That may seem strange and the reason lies in the participation rate, which rose to 65.9% from 65.6%. In other words, plenty of people entered the labour market, but since not all of these (though a very healthy 29.7K) found jobs, the unemployment rate rose.


The US trade deficit narrowed more than expected to $44bn in September. The trade balance was revised slightly lower for August to -$46.5bn. Exports hardly rose (0.3% month-on-month), but imports declined enough (-1.0%) to give us the better than expected trade balance. Goods exports were roughly unchanged ($107.6bn vs. $107.5bn last), but imports of goods declined 1.3% to $164.4bn.

Mads Koefoed

Mads Koefoed is a contributor at and a Macro Strategist at Saxo Bank.
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