1 Eurozone ending 2016 robustly (San Francisco
Chronicle) The eurozone economy is ending 2016 robustly and inflation pressures
are growing, a key survey showed, in a combination that suggests the European
Central Bank's stimulus efforts are working.
Financial information company IHS Markit said its
purchasing managers' index, a gauge of activity in the manufacturing and
services sectors, held at 53.9 points in December, the same as in November. The
index, which is subject to revision, is on a 100-point scale, with 50 marking
the threshold between growth and contraction.
A more detailed look at the survey shows that
inflows of new business, employment and backlogs of work remained strong and
that the manufacturing sector offset a slight slowdown in services. IHS Markit
said the index is pointing to quarterly growth of 0.4 percent, which would be
the eurozone's highest rate this year.
Though Chris Williamson, chief business economist at
IHS Markit, said the survey puts the eurozone economy on a "strong footing"
for 2017, he cautioned that there is "clearly the potential for political
uncertainty to derail growth." Next year, there are scheduled elections in
the Netherlands, France and Germany. Discussions over Britain's exit from the
European Union are also scheduled to commence.
Perhaps more important for officials at the ECB is
the intensification in inflation pressures identified by the survey as a result
of higher import costs related to the fall in the value of the euro and the
recent spike in commodity prices, notably oil. The common European currency has
fallen further following the Federal Reserve's rate hike on Wednesday to trade
at a 13-year low of $1.0410.
http://www.sfgate.com/news/world/article/Eurozone-business-activity-ends-year-on-upbeat-10797754.php
2 Europe’s top 10% earners get as much as bottom 50%
(Katie Allen in The Guardian) The top 10% of highest paid workers in Europe
together earn almost as much as the bottom 50%, according to a report from the
International Labour Organization that calls on governments and companies to do
more to ensure the fruits of economic growth are shared out.
The UN agency used its latest report into global
wage trends to examine earnings inequality between different earners within
firms and between firms. It also found startling discrepancies between men and
women’s salaries at senior level in Europe with a gender pay gap of more than
50% for chief executives.
The report builds on a warning from the ILO director
general, Guy Ryder, that income inequality and a rise in casual employment
practices risk fuelling nationalist movements. Speaking after Donald Trump won
the US election on an anti-globalisation ticket and the UK voted for Brexit,
Ryder said people felt they were getting a “raw deal” from the current economic
system.
By comparing the wages of individuals in Europe to
the average wage of the firms where they work, the ILO’s researchers found that
about 80% are paid less than the average for the firm – because the average is
skewed upwards by the big payouts to its highest earners.
In the 1% of firms with the highest average wages,
the bottom 1% of workers were paid on average €7.10 per hour while the top 1%
earned an average €844 per hour, or 118 times more.
3 Japan is largest holder of US treasuries (Straits
Times) Japan became the largest holder of US Treasuries for October, outpacing
China for the first time in nearly two years, data from the US Treasury
Department showed.
Japan held $1.131 trillion in US Treasuries, while
China's holdings declined to $1.115 trillion, a drop of about $41 billion.
China has been dipping into its reserves, selling Treasuries to support the
yuan.
Data also showed foreigners bought $9.4 billion in
long-term US assets in October, after selling $64.8 billion the previous month.
Including shorter-dated securities, overseas investors purchased $18.8 billion
in October, after selling a massive $154.4 billion in September.
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