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DECPG Daily
Economics and Financial Market Commentary
January 5, 2011
Mick Riordan (x31289), Cristina Savescu (x80812), Nadia Islam Spivak (x80504)
Eung Ju Kim (x85804), Shane Streifel (x33867), Annette De Kleine (x34710)
You’ll find recent issues of this Daily and lots of other current analysis and high-frequency data at our
intranet website: http://gem or for external users http://www.worldbank.org/gem.
Philippine and Turkey kick-start EM bond issuance for 2011. The Philippines and
Turkey tapped international bond markets on Wednesday, becoming the first emergingmarkets sovereigns to sell global bonds this year. The Philippines sold $1.25 billion
worth of 25-year global bonds denominated in pesos to a yield of 6.25%. The peso
denominated bonds will reduce the foreign-exchange risk and extend the maturity
profile of the country’s debt. The proceeds from the issue will be used to plug the
budget deficit to meet last year’s target of 325 billion pesos.
Turkey also issued $1 billion of dollar-denominated debt maturing in 2041 at a yield of
6.25%. The new bond was well received amid growing expectations of a sovereign
rating upgrade, with an order book of five times the issue size. About 65% of the issue
was bought by foreign investors (33% for Europe, 31% United States, and 1% to Asia),
while 35% was allocated to local investors, according to a statement from the country’s
Treasury.
US labor market continues to strengthen. In signs of continued improvement in the
US labor market, the four-week moving average of initial unemployment claims, which
gives a better idea of trends, fell to 410,750 – its lowest level since August 2008.
However, for the week ending January 1 2011, the number of unemployment claims
increased by 18,000 - this mostly reflects the dismissal of temporary workers that were
hired
during
the
holiday
season
[see
Chart
at
http://gem
or
http://www.worldbank.org/gem].
Tomorrow the Labor Department will release the US employment report. In a report
released yesterday by ADP Employer Services, an unofficial count of employment,
some 297,000 jobs were reported to have been added in December. Hence, many
analyst are expecting the official report to show a significant increase in jobs for
December, with a possible drop in the unemployment rate from its current high level of
9.8%. A strengthening US labor market should provide support to consumer spending,
which accounts for some 70% of US GDP, as well as the embattled housing market.
Factory orders in Germany picked-up strongly in November. In a statement
released by Germany’s Economy Ministry, manufacturing orders rose by 5.2% (m/m) in
November, up from 1.6% (m/m) in October - the biggest gain since January 2010.
Orders from Germany were up 1.5% (m/m) and foreign orders rose by 8.2%, reflecting
strong demand from Asia. Recent Purchasing Managers’ Survey for Germany and
record high business confidence provides support to the view that the recent strong
manufacturing activity in Germany is yet to peter out.
Recent issues and other current analysis are also available on the Prospects blog.
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The Daily Brief is a summary of economic news items for Bank staff whose responsibilities require that
they stay abreast of changes in global markets. The views expressed here are those of the various
authors and do not necessarily reflect those of the World Bank Group's Executive Directors or the
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