Market Mover - BNP PARIBAS - Investment Services India

Key Data PreviewChart 13: German: Industrial Orders and OutputSources: Reuters EcoWin Pro(sa) Sept (f) Aug Jul JunOrders % m/m -2.2 -1.4 -2.6 1.8Orders % y/y 5.0 3.6 8..9 9.4Output % m/m -3.3 -1.0 3.9 -1.1Output % y/y 4.7 7.9 10.4 7.0BNP Paribas Forecast: Falling OutputGermany: Industrial Orders and Output (September)Release Date: Friday 4 and Monday 7 NovemberIndustrial production in August declined by 1.0% m/m,essentially due to a sharp contraction in durable consumergoods production. A large part of the decline was a bounceback following a major rise in durable goods production inJuly.The trend in industrial production generally follows neworders with a delay of two to three months. However, overthe past few months, industrial production outperformedorders, generating a significant gap in the level of productionin comparison to the level of orders. This gap is likely toaffect industrial production in addition to weaker orders overthe next few months.Industrial orders started to decline in July. The Septemberdecline amounted to 2.2% m/m. All sub-componentsdeclined, especially consumer goods orders. The new orderssub-component in the PMI is below 50 and has beenfollowing a downward trend since July. In September, theindex declined to 46.4 and flash estimates signal that theslowdown is likely to accelerate even further in October. Thedecline can be expected to be most pronounced in exportorders.Key Point:Activity is likely to fall in the last quarter of the year.Chart 14: US Unemployment Rate-6011-5010-40-30Jobs Plentiful Less JobsHard to Get (Inverted)9-20-1087010203065Unemployment Rate 440(%, RHS)Bars Mark Recessions50376 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12Sources: Reuters EcoWin ProOct (f) Sep Aug JulPayroll Jobs k 75 103 57 127Private Payrolls k 100 137 42 173Unemployment Rate % 9.1 9.1 9.1 9.1Key Point:We expect a moderate increase in nonfarm payrolls andthe unemployment rate to remain at current levels inOctober.BNP Paribas Forecast: Modest GrowthUS: Labour Report (October)Release Date: Friday 4 NovemberNonfarm payrolls are expected to post a 75k increase inOctober after posting 103k growth in September. We forecastprivate sector hiring to grow 100k. Meanwhile, an ongoingslowdown in state and local government spending isexpected to shave 25k government jobs from total nonfarmpayrolls. The claims data do not suggest deterioration inlabour market conditions, neither do they indicate that therecent wave of layoff announcements has begun to filter intojobless claims filings. Meanwhile, the latest business surveysindicated increased doubts about the strength of therecovery noting restraint in hiring. Consumer surveyspainted a similar picture. The Conference Board’s labourdifferential index, which measures the percent ofrespondents saying jobs are plentiful and subtracts thepercent saying jobs are hard to get, remained athistorically depressed levels in October (see chart). Weforecast the unemployment rate to remain at 9.1% assumingstable labour force participation. Average hourly earnings areexpected to rise 0.1% after 0.2% a month prior as wage andsalary growth remains subdued in the face of elevatedunemployment.Market Economics 27 October 2011Market Mover77www.GlobalMarkets.bnpparibas.com