1 Russian rouble takes a tumble (Larry Elliott in The Guardian) Russia’s central bank has been forced to step in to defend the ruble on the foreign exchanges after fears over the economy’s vulnerability to a weak oil price sent the currency to a record low against the dollar. Moscow was forced to abandon its hands-off policy towards the ruble amid heavy selling, unmatched since the Russian debt default of 1998.
The Russian central bank intervened when the ruble was down 6.5% on the day against the US dollar, and by the close of trading on Monday the currency had recouped more than half its earlier losses. A bounce in the oil price from a fresh five-year low and a sense that the sell-off since last week’s meeting of the Opec cartel has been overdone helped sentiment towards the Russian currency, which has been badly buffeted by a plunge of almost 40% in the cost of crude since the summer.
Oil is denominated in dollars, so when the US currency falls oil becomes cheaper and more attractive for holders of other currencies. With Moscow fearful that the drop in the value of the ruble makes Russia vulnerable to capital flight, Ksenia Yudaeva, the Russian central bank’s deputy chairwoman, said households should not panic. She said the rise in interest rates to 9.5% should encourage them not to convert savings into euros or dollars.
At one stage on Monday, Brent crude was trading at $67.50 a barrel, a fresh five year low, before recovering to $71.90. Oil is still down about 10% since producer group Opec’s decision last Thursday not to cut output despite fears of a supply glut.
2 China manufacturing slows (BBC) China’s factory activity slowed by more than expected in November, highlighting how a cooling economy is impacting its vast manufacturing sector. The official purchasing managers’ index (PMI) dipped to 50.3 in November from October’s 50.8, closer to the 50 point mark that separates growth from contraction. It was below the 50.6 level expected by economists.
Rising costs and falling demand were blamed for the downturn in activity. Meanwhile, a private survey from from HSBC showed that growth in Chinese factories in November stalled as output shrank for the first time in six months.
Growth in the world’s second largest economy fell to 7.3% in the third quarter, which was the slowest pace since the global financial crisis. The risk that China might miss its official growth target of 7.5% this year for the first time in 15 years is growing because economic data is weaker than expected, economists said. A struggling property market, uneven export growth and cooling domestic demand and investment are some of the major factors weighing on overall growth.
3 Teens move away from Facebook (Khaleej Times) A study involving 170,000 internet users across 32 countries has found that more and more teenagers are spending more time on instant messaging apps than on Facebook. Nearly 66 per cent of teenagers (aged 16-19) in the US and Britain said they were using Facebook less frequently.
While the teenagers are not off the social networking site completely, the interactions have dropped and the group is more passive about the site as a whole, revealed the new “Social Summary for Q3 2014” from market research firm GlobalWebIndex (GWI). Nearly 30 per cent of teenagers said they are not on Facebook as often because their friends have gone on Instagram and other messaging apps, StreetInsider.com reported.
The report found that although Facebook has a drop in active users, its Messanger is not very popular among teenagers, even leaving WhatsApp behind as the most used messaging app. Snapchat turns out to be the real winner among teenagers. “Snapchat has the youngest audience of any social app and usage ranges from 25 per cent to 40 per cent of all online teenagers in key markets such as the US, Britain and Canada,” the report added.