The Bank of England left its emergency stimulus unchanged this morning at 200 billion pounds ($319.36 billion) as widely expected and left its base rate unchanged at 0.5%. Manufacturing rose more than economists forecast in August in a sign that the recovery in factory production is gaining traction. Output increased 0.3% from the previous month, when it gained a revised 0.4%, the Office for National Statistics said today in London; estimates were for an increase of 0.2%. Nothing from the BofE on more easing as is the case in the US and Japan so far. European Central Bank President Jean- Claude Trichet said interest rates in the 16-nation euro region are “appropriate,” indicating he sees no immediate need to join a global push to ease monetary policy.
Industrial production in Germany jumped 1.7% from July, when it rose 0.1%, the German government reported today. Economists had forecast a gain of 0.5%. From a year earlier production increased 10.7% when adjusted for the number of work days after rising 10.9% in July. Looking forward, Germany could slip back with the 17% increase in the euro currency that may cut their exports some.
Not much more to deal with today; tomorrow's Sept employment report is looming tomorrow morning and is all that is on the minds of traders today. Current estimates are for overall non-farm payrolls to decline 8K with private job growth up 85K and the unemployment rates at 9.7% +0.1% frm August. Nonfarm payroll employment in August slipped 54,000 after falling a revised 54,000 in July. A big part of the weakness was seen in the government sector, which still included layoffs of temporary Census workers. Government jobs dropped 121,000 after falling 161,000 in July. For the August drop, 114,000 were due to layoffs of temporary Census workers. In contrast, private nonfarm employment continued to rise, gaining 67,000 in August, following a revised boost of 107,000 the month before.
Looking for a quiet session in the bond and mortgage markets today; not sure what to expect from the equity markets that opened better at 9:30 this morning. At the open the DJIA +25, 10 yr note unchanged but mortgage prices better, up 6/32 (.18 bp) frm yesterday's closes.