Divergent Equities in Europe and Asia
July 8, 2013
In the Pacific Rim, stocks dropped sharply by 3.7% in Indonesia, 2.8% in China and the Philippines, 1.3% in Hong Kong, 1.4% in Taiwan and 0.9% in South Korea and India. Australian share prices closed 0.7% lower, and Japan’s Nikkei dropped 1.4%. But in Europe, equities have risen 2.3% in Germany, 2.0% in France, 1.6% in Spain, 1.4% in Italy, and 1.0% in Britain.
The dollar this Monday is so far unchanged against the Swiss franc, Chinese yuan, Japanese yen and sterling. It has declined by 0.5% and 0.4% against the New Zealand and Australian dollars and by 0.2% versus the euro and loonie.
The 10-year Japanese JGB climbed three basis points, while the 10-year German bund is down two bps. The 10-year gilt is steady.
Gold advanced 1.5% to $1230.90 per ounce. Oil slid 0.2% to $102.98 per barrel.
Japanese and German current account figures for May were reported.
- Japan’s current account posted surpluses of 623 billion yen seasonally adjusted, close to forecast, and JPY 541 billion not adjusted, which was a bit less than expected by still 58% wider than a year earlier. The merchandise trade deficit printed at JPY 423 billion seasonally adjusted and JPY 907 billion not adjusted. Exports and imports were 9.1% and 9.6% greater than in May 2012 and up 21.8% and up 21.1% from May 2011. Seasonally adjusted exports jumped 6.1% on month, while imports stagnated.
- The German trade surplus — EUR 14.1 billion seasonally adjusted after EUR 17.5 billion in April and EUR 13.1 billion not adjusted versus EUR 15.6 billion in May 2012 — was lower than expected. Exports fell by 2.4% on month and 4.8% on year. The current account surplus of EUR 11.2 billion was down from EUR 16.7 billion in April but above the May 2012 surplus of EUR 10.0 billion.
German industrial production dropped 1.0% in May, twice as much as forecast, but still exceeded the 1Q level by 2.4% in April-May. Output also fell 1.0% in the year between May 2012 and May 2013. Factory output, construction, and energy posted monthly declines of 0.7%, 2.4% and 1.5% in May. Capital goods, which had jumped 3.9% in April, dropped by 2.3% in May.
Japan’s economy watchers index fell back 2.7 points to a five-month low of 53.0 in June.
The Sentix index, which measures investor sentiment toward the euro area, unexpectedly worsened in July, printing a whole point lower at minus 12.6. Such had been as weak as minus 17.5 in April and as strong as minus 3.9 in February.
The Bank of France business sentiment index for France rose two points to a reading of 96 in July from 94 in May and June.
Ireland’s construction purchasing managers index reached a 4-month high of 43.4 in June following readings of 43.1 in March, 41.9 in April, and 42.0 in May.
Swiss industrial production climbed 3.0% in the first quarter of 2013, but just 0.6% from 1Q12, after gaining 1.7% in the final quarter of last year. Turkish industrial production fell 0.6% in May and rose just 1.0% on year, a third as much as expected. Czech industrial output was 2.2% lower than a year before in May, and Swedish production dived 7.3% over the same interval.
Bank lending in Japan is responding slowly to Abenomics. Such rose 1.9% in the year to June versus on-year advances of 1.8% in May and 1.7% in April.
Australian job ads fell 1.8% in June, their fourth straight slide. Swiss unemployment stayed level and low at 3.2% in June.
ECB Pdt Draghi testifies before the EU parliament. Canadian building permits and U.S. consumer credit figures arrive today.
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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