Daily Afternoon Report 01/11/2012

Euro remains uncertain with doubts still looming about the future of Greece and Spain, the British Pound has still managed to find its way higher following positive statements and releases about the UK. The Euro has dropped over the course of the European session, possibly because of a report that Spain will continue its ban on short selling or maybe because of general pessimism felt in forex news about the Euro over the past few days.

Euro-zone unemployment was also reported today at 11.6% in September, slightly higher than expectations for 11.5% and higher than August’s revised 11.5% unemployment rate. The unemployment is significantly higher than the 10.3% rate in September of 2011, as the Euro debt crisis has placed immense pressure on the Euro-zone economy. The total amount of people looking for work in the Euro-zone now stands at 18.49 million. Germany reported a 5.4% unemployment rate, while Spain had the worst rate of unemployment at 25.8%.

A drop in UK manufacturing has accelerated at a faster pace according to the Purchasing Managers’ Index by Markit Economics. The PMI for manufacturing for October was reported at 47.5, lower than the expected 48 index result and lower than September’s revised 48.1 PMI. A PMI below 50 indicates a drop in manufacturing activity, and October marks the sixth straight month of negative activity.

Daily Morning Report 01/11/2012

The dollar traded steady to lower against most major currencies after Chinese factory data beat expectations.

China’s manufacturing expanded for the first time in three months in October, adding to signs growth in the world’s second-biggest economy is rebounding after a seven-quarter slowdown. The Purchasing Managers’ Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing.

China's economy is finally regaining traction, official and private sector factory surveys showed on Thursday, although the recovery remains sluggish with the latter recording its 12th straight month of slowing growth. Evidence is mounting that the economy revived in October after domestic credit curbs and poor demand from overseas markets pushed economic growth in the third quarter to its weakest rate since the depths of the global financial crisis.

Elsewhere, Eurozone finance ministers are mulling giving Greece more time to meet deficit-reduction targets, and hopes Greece will be granted an extension sent the euro and other higher-yielding assets rising against the dollar earlier. The euro also saw support from Spanish Prime Minister Mariano Rajoy, who said he would not rule out asking for a bailout.

Later Thursday, the U.S. will release its weekly government report on initial jobless claims, as well as official data on nonfarm productivity and labor costs, important inflationary indicators, while the Institute of Supply Management is to publish data on U.S. manufacturing activity.