September 9, 2014

Job Openings, Quits Register on Yellen’s Dashboard: Economy

• Job opening in July held close to a more than 13-year high
• Hiring rate held 3.5%, compared with average 3.8 during the previous expansion
• Companies added 142,000 workers to payrolls in August
• The upswing in openings and a six-year high in the number of people voluntarily leaving their jobs, a sign of Americans’ confidence in finding other work
• Underscore persistent progress in the labor market

Thought

Yellen closely looks at those labor market indicators. Pointing out that labor market is continuously outperforming, it is possible that the Fed. will increase an interest rate sooner. It will hugely impact on the market if you think about how much QE the Fed. has put into the market since the financial risk. In fact, Federal Reserve Bank of San Francisco released monetary policy report today that the financial market expects too much from the Fed., which increases volatile in the market.

E.U Considers Russian Penalties Amid Fragile Ukraine Truce

• The planned sanctions include barring some Russian state-owned defense and energy companies from raising capital in the E.U.
• Worried about the possibility of Russian counter-sanctions should the E.U enact the new package
• The agreement to halt fighting came in the midst of an E.U push to ratchet up penalties against Russia in coordination with the U.S. in a bid to force Putin to end support

Thought

More sanctions over Russia were expected from previous months. It means that this sanctions were already reflected in the market price. What I expect is that if Ukraine and Russia find a solution on eastern Ukraine, or at least something would ease the tension, it will tremendously boost EU's economyWhy You Should Care About Scotland’s Independence Vote

• An opinion poll showing Scottish independence campaigners have a  slim lead nine days before a crucial referendum has highlighted
• A lot of energy has been expended arguing whether an independent Scotland could join the European Union; Scotland would have to leave the EU and re-apply for membership
• What share of Britain’s debt would Scotland take? Would it retain the pound? How much would Scotland get of oil revenues from the North Sea? Would it follow a different fiscal policy?
• The U.K economy is Europe’s biggest destination for foreign direct investment. Without Scotland those flows would fall and the rest of the U.K’s current account deficit could rise to a level that discomfits investors