November 14th – Top Stories

1/ US

 

- Yellen Signals Further Bond Purchases Until Recovery Strengthens - Businessweek – By Joshua Zumbrun and Jeff Kearns

 

Janet Yellen, nominated to be the next chairman of the Federal Reserve, signaled she will carry on the central bank’s unprecedented stimulus until she sees improvement in an economy that’s operating well below potential.
 
“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Yellen said in testimony prepared for her nomination hearing before the Senate Banking Committee today in Washington. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”

 

2/ China

 

- China Banks Pay Most for State Funds in Six Months; Swaps Rise - Bloomberg – By Bloomberg News

Chinese lenders paid the highest rate of interest since June to borrow government funds today, a sign cash supply in the banking system is waning.
 
The People’s Bank of China auctioned 30 billion yuan ($4.9 billion) of three-month treasury deposits on behalf of the Ministry of Finance at 6 percent, according to a statement on its website. Interest-rate swaps and money-market rates also advanced as the central bank refrained from adding funds via reverse-repurchase agreements.

 

3/ Eurozone & UK

 

- German, French GDP Cast Shadow Over Euro Zone - WSJ – By Nina Adam and William Horobin

 

Economic activity slowed in Germany and declined in France during the three months through September, indicating that the euro zone’s nascent recovery faltered in the summer.
 
Economists forecast that activity will pick up again toward year-end, albeit very modestly, in light of rising business sentiment and reduced tensions in the euro zone’s government bond markets.
 
Germany’s gross domestic product—the broadest measure of goods and services produced across the economy—increased 0.3% in the third quarter from the preceding period, the federal statistics office said Thursday. The outcome met economists’ forecasts.
 
France’s GDP unexpectedly contracted by 0.1% in the third quarter, after expanding by a quarterly rate of 0.5% in the second quarter, data from the country’s Insee statistics bureau showed Thursday.