Americans Borrowing More Briskly for Cars, Homes
Household debt—including mortgages, credit cards, auto loans and student loans—rose $78 billion between July and September to $11.7 trillion. Debt levels had fallen the previous quarter and remain $1 trillion below their peak in 2008. (…)
New mortgage loans, including refinanced mortgages, edged up to $337 billion after four straight quarters of declines, the Fed’s figures showed. Total mortgage balances—the biggest part of Americans’ debt—climbed $35 billion to $8.1 trillion.
While historically low, the uptick in new mortgages is a welcome sign for the nation’s housing market, which has struggled even as the economy comes off its best six-month stretch of growth since 2003.
In addition, auto lenders made $105 billion in new loans, the highest level in nearly a decade. Outstanding student loans rose $8 billion to $1.1 trillion.
Credit-card balances, which have generally been slow to rise, are now slightly above year-ago levels.
The share of mortgage debt seriously overdue dropped to 3.2% last quarter, from 3.4% in the second quarter. The share of seriously delinquent auto-loan debt also dropped, to 3.1%, from 3.3%—despite growing concerns about lax auto lending. Serious credit-card delinquencies eased, too.
New Mortgage Lending Drops to 13-Year Low New figures released by the Federal Reserve Bank of New York on Tuesday show that mortgage lending is running at its lowest level in 13 years, with 2014 on pace to be the weakest for new loans since 2000.
U.S. Home Prices Decelerated in September The yearly growth in home prices across the U.S. decelerated further in September, according to a home price report released Tuesday.
The home price index covering the entire nation increased 4.8% in the 12 months ended in September, said the S&P/Case-Shiller Home Price Index report. That is down from 5.1% in August.
On an unadjusted basis, the 10-city and 20-city gauges were unchanged in September from August, while the national index slipped 0.1%. S&P said that was the first national decline since November 2013.
German industry suffers sanctions fallout Germany’s exports to Russia are expected to fall 20% this year
German exports to Russia fell 16.6 per cent to €20.3bn in the first eight months of the year. (…)
Germany’s machinery sector has been particularly hard hit. Russia is the fourth most important export market for German machinery and plant technology. Sales were worth some €7.8bn last year but are drying up. (…)
Although Russia accounts for less than 3 per cent of Germany’s total exports, some 6,200 German companies do business in Russia and the uncertainty threatens jobs, says Ulf Schneider, managing partner at Russia Consulting in Moscow. (…)
Around 300,000 German jobs depend on trade with Russia.
Draghi stands ready…
ECB May Consider Sovereign QE Next Quarter, Constancio Says The European Central Bank will next quarter consider buying sovereign debt in relation to the size of each euro member’s economy if current stimulus proves insufficient, Vice President Vitor Constancio said.
OIL
Saudis signal no push for oil cut as market to ‘stabilize itself’
OPEC leader Saudi Arabia signaled on Wednesday it was unlikely to push for a major change in oil output at the producer group’s meeting this week, a day after Russia refused to cooperate in any production cut. Saudi Oil Minister Ali al-Naimi said he expected the oil market “to stabilize itself eventually” but did not comment on talks with Russia held on Tuesday, which produced no firm pledge from Moscow to help support flagging oil prices.
Russia’s most influential oil official, state firm Rosneft’s (ROSN.MM) head Igor Sechin, emerged with a surprise message – Russia will not reduce output even if oil falls to $60 per barrel.
Sechin added that he expected low oil prices to do more damage to producing nations with higher costs, in a clear reference to the shale boom in the United States.
Many at OPEC were taken by surprise by Sechin’s suggestion that Russia – in desperate need of oil prices above $100 per barrel to balance its budget – was ready for a price war.
Iranian Oil Minister Bijan Zangeneh said some OPEC members, although not Iran itself, were gearing up for a battle over market share and insisted that non-OPEC producers needed to participate in any OPEC-led output cut.
OPEC Members Near Compromise on Cuts OPEC members are inching toward a compromise that could lead them to cut oil supplies by adhering more strictly to agreed production ceilings.
(…) Support for such a move, which would be based on tighter compliance with OPEC’s existing output limit as opposed to an outright cut to its production target, was coalescing last week at a meeting of OPEC advisers, according to several of those present. With oil prices having recently stabilized at around $80 a barrel following a 30% slide since the summer, some within OPEC have seen less urgent need for the group to take stronger action. (…)
“Saudi Arabia will likely go for a rollover” of the current ceiling, the Gulf official said on Tuesday. A call for strict compliance would be “an option they would go for.” (…)
Closer compliance would imply a supply cut of around 300,000 barrels of oil a day compared with October levels, according to OPEC technocrats who met last week. (…)
But a supply cut of around 300,000 barrels a day is unlikely to satisfy some OPEC members, such as Venezuela and Iran, who need oil prices well above $100 a barrel to balance their government budgets.
(…) An OPEC production cut of around 1.5 million barrels would be needed to tighten global oil markets next year, according to oil analysts at Barclays . (…)
U.S. shale oil producers need oil prices in the range of $53 to $78 a barrel to break even, meaning most are profitable even with prices at their current level, according to estimates presented at an OPEC technical meeting last week. (…)