Daily Market Update – December 19, 2012

Top News Highlights

• The U.S. Federal Reserve's bond-buying programs alone cannot bring down too-high unemployment, because there is too much uncertainty holding businesses back from hiring, Dallas Fed President Richard Fisher said. "Quantitative easing is a necessary but insufficient tool to spark job creation," Dallas Fed President Richard Fisher said. "Employers will not deploy the cheap and abundant capital on hand toward job creation while there is so much uncertainty surrounding final demand for the goods and services they sell." Businesses are also holding back because of uncertainty over the so-called fiscal cliff, he said, because they do not know what their taxes will be or how government spending patterns will affect them

Economic Highlights

• The Confidence among U.S. homebuilders climbed in Dec for the eighth straight month, reaching its highest level in more than six years and adding to signs the real-estate market is aiding the economic expansion. The National Association of Home Builders/Wells Fargo index of builder confidence increased to 47, the highest since Apr 2006, from a revised 45, the reported. The Dec figure matched the forecast in a Bloomberg survey of economists
• U.K. annual inflation held steady in Nov at the highest level since May on increases in food and energy bills, official data showed. Consumer price inflation stabilized at 2.7% in Nov, figures from the Office for National Statistics revealed. Inflation was at a 34-month low of 2.2% in Sep. Core inflation that excludes energy, food, alcoholic beverages and tobacco, also remained unchanged at 2.6% in Nov. The rate was forecast to rise marginally to 2.7%
• Japan posted a merchandise trade deficit of 953.4B yen in Nov, the Ministry of Finance said - down 37.9% Y-o-Y while continuing to reflect slowing exports to China in a territorial island dispute. Exports were down 4.1% Y-o-Y to 4.983T yen, also beating forecasts for a 5.5% decline following the 6.5% contraction in the previous month. It also marked the sixth straight month of contraction. Imports added 0.8 percent on year to 5.937 trillion yen versus expectations for a rise of 0.6 percent after shedding a revised 1.6 percent a month earlier. Imports added 0.8% Y-o-Y to 5.937T yen vs. expectations for a rise of 0.6% after shedding a revised 1.6% a month earlier

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