The euro area’s business activity growth picked up pace in November, following its six-month low in the previous month, IHS Markit revealed.
The composite Purchasing Managers’ Index for the zone reached 55.8 in November, compared to 54.2 in October, according to flash estimates by the London-based firm.
However, high inflation in the area remained an issue as both costs and average selling prices went up by record rates.
Although confidence about the outlook dropped to a 10-month low — partly due to a revival of Covid-19 concerns — firms faced stronger demand in November, pulling the rate of job creation to its second highest level in 21 years.
The services sector had a stronger performance compared to manufacturing, as its growth reached a three-month high. The manufacturing sector also experienced a rebound in November, despite expanding at the second-lowest level in the previous 17 months.
The Consumer Confidence Index fell significantly in both the EU and the eurozone in November as they went down by 2.1 percent and 2.0 percent respectively compared to October.
The indicator reached -8.2 for the EU and -6.8 for the euro area, the European Commission said.
The index fell below the pre-pandemic level for the EU while it was close to that level for the eurozone. However, it remained above its long-term average.
UK’s private sector
The UK’s composite PMI ticked down to 57.7 in November from 57.8 in the previous month, flash estimates by IHS Markit showed.
Similar to the eurozone, the services sector outperformed the manufacturing industry as client demand picked up pace and pandemic-related restrictions were relaxed. The manufacturing sector expanded at its highest level in three months as well.
On the flip side, input cost inflation reached record levels in November due to wage hikes and jumps in the costs of energy, fuel and raw materials.
Meanwhile, employment levels underwent some improvements as customer demand and higher backlogs of work drove the increase.
In addition, new order intakes grew by the highest levels since June while exports rose only slightly.
Growth of the Australian private sector increased in November on the back of better conditions in both the services and the manufacturing sectors, according to flash estimates by IHS Markit.
Composite PMI for the country reached an initial reading of 55 in November, a five-month high and up from the previous month’s 52.1. Output and demand growth in the private sector rose in November as Covid-19-induced restrictions eased off. Business confidence and employment conditions also improved.
Supply chain disruptions remained an issue in the private sector. This, along with transportation and labor issues, were causing higher prices.
In another economic development for Australia, the country’s central bank said that it would closely examine asset prices to check if there are bubbles as interest rates hit record low levels, Bloomberg reported.
Favorable EM debt securities
Rising interest rates triggered by emerging markets’ central banks means that their debt will be more attractive for investors, according to private equity giant BlackRock.
It will also provide a buffer in the event of policy tightening by the US Federal Reserve.
“We prefer local-currency bonds of higher-yielding countries with solid current account balances,” global chief investment strategist at BlackRock, Wei Li, said.
However, this could negatively affect stocks and equities in these countries, the firm added.
Singapore’s core inflation
Singapore’s core inflation rate, which excludes changes in food and energy prices, increased to 1.5 percent in October, posting the highest jump in nearly 3 years, the Monetary Authority of Singapore revealed.
This builds on the previous month’s inflation of 1.2 percent.
This was driven by higher prices of services and food as they rose annually by 1.6 and 1.7 percent respectively.
In addition, consumer prices as a whole went up by a yearly rate of 3.2 percent in October, compared to 2.5 percent in September.
Poland’s interest rates
Poland’s central bank is expected to hike interest rates to pre-pandemic levels, according to Bloomberg. This comes at a time when inflationary pressures in the country are mounting.