Data Surprises – Both Good and Bad

July 24, 2013

Euroland preliminary PMI results were better than hoped.

  • The composite Ezone PMI of 50.4 broke above the 50 no change threshold to an 18-month high.  Manufacturing at 50.1 was at a 24-month peak, while services at 49.6 was at an 18-month high and reinforced a picture that the recession seems to be bottoming.
  • Germany’s 52.8 composite reading constitutes a 5-month high.
  • The French indices were still below 50 but at 17-month peaks both on the composite index and for manufacturing alone.  The services score of 48.3 was at an 11-month high.

China’s manufacturing PMI sank to an 11-month low of 47.7 on a faster contraction of orders.  Output also contracted.

Markit’s measure of the U.S. PMI improved to a 4-month high of 53.2.

Japan’s June seasonally adjusted trade deficit, JPY 599 billion, was the smallest since July 2012.

U.S. new home sales jumped 8.3% on month to a 497K, best since May 2008.  On-year growth in new home sales of 38.1% was the most since the start of 1992.  Higher mortgage rates continue to weigh on mortgage applications, however; These fell 1.2% last week.

Britain’s industrial trends index posted a reading of minus 12 in July, best in 10 months.

Australian CPI inflation stayed acceptably low in the second quarter.  The all-items CPI rose 0.4% from 1Q and edged down a tenth of a percentage point in on-year terms to 2.4%. Core inflation was unchanged on year at 2.2% for the trimmed mean index and 2.6% for the weighted median CPI.

South African CPI inflation of 5.5% in June was a tenth percentage point less than in May, while Icelandic CPI inflation increased half a percentage point to 3.8%.

The dollar has risen 0.7% against the yen and is above the 100 threshold.  The dollar climbed 0.8% relative to the Aussie dollar, which reacted poorly to China’s PMI report and benign Australian inflation numbers.

The dollar is steady against the Swiss franc, Chinese yuan and Canadian dollar.  The greenback is up 0.1% versus sterling and off 0.1% against the euro.  It’s gained 0.3% on the kiwi.

Share prices fell by 1.0% in India and Indonesia, 0.7% in China, 0.3% in Japan, and 0.2% in Taiwan but gained 0.4% in both Australia and New Zealand.  Equities are 0.7% higher in France, Spain and Italy and up 0.3% in Germany.  U.S. stocks are narrowly mixed.

Whereas German bunds and Japanese JGBs are steady, ten-year Treasury and British gilt yields show sharp overnight increases of six and nine basis points.

Gold and oil prices are 0.2% and 0.8% weaker.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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