The Rate Of Unemployment May Fall Below 6% In A Year
A month ago, we discussed the rate of unemployment in the US and published our forecast for 2013. Two months ago, we predicted an extended unemployment fall period down to the level of 6.2% in the third quarter of 2013. This prediction was made after we accurately forecasted (on March 1, 2012) the rate of unemployment in the US to fall to 7.8% by the end of 2012. For the first time in 2012, the BLS announced 7.8% in September and the rate for November is 7.7%. One may expect a lower figure in December 2012. Here we update our model and estimate that the rate of unemployment in the fourth quarter of 2013... (full story)
FOREX :EURO USD MAKE REBOUND
The euro inched up against the U.S. dollar on Monday as nerves began to calm after Italian Prime Minister Mario Monti's surprised the world by announcing plans to resign.
In U.S. trading on Monday, EUR/USD was trading up 0.06% at 1.2934, up from a session low of 1.2886, and off from a high of 1.2942.
The pair was likely to find support at 1.2834, the low of Nov. 22 and resistance at 1.2973, Friday’s high.
On Saturday, Monti announced that he will resign as soon as Italy passes a 2013 budget.
The announcement came after members of former Prime Minister Silvio Berlusconi’s party withdrew their support for Monti's caretaker government.
Earlier, the yield on 10-year Italian bonds jumped to 4.83% on Monday from 4.52% at the close of trading on Friday.
Reports that Berlusconi is planning a comeback rattled nerves somewhat due to concerns if Monti's policies would hold, though the euro gained after market participants digested the news and realized Monti's administration was never designed to be permanent anyway.
Elections may take place in February, arguably not far from when Monti would have called for elections anyway.
The euro regained strength after dipping news that Italian industrial production fell more than expected in October.
In a report, Istat said that Italian industrial production contracted 1.1% in October from 1.3% in the preceding month whose figure was revised up from a 1.5% contraction.
Analysts had expected Italian industrial production to contract 0.2% last month.
Istat added that final readings on Italy's gross domestic product revealed the economy contracted 0.2% in the third quarter, in line with expectations
Elsewhere, the dollar softened somewhat ahead of the Federal Reserve's monetary policy meeting this week.
Talk that the U.S. central bank may ramp up its bond buying program to provide further stimulus to the economy kept the greenback's advance at bay despite European uncertainty.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.11% at 0.8049, and EUR/JPYtrading down 0.05% at 106.61.
Markets will continue to track events in Italy to determine if changes in leadership will shake confidence in the country and its fiscal reforms and in the eurozone as a whole.