No U.S. Jobs Report on this First Friday of the Month

October 4, 2013

Like each first Friday of the month, today’s market action was to have be dictated by the Labor Department jobs report, whose release instead has been indefinitely postponed due to the partial U.S. government shutdown. No breakthroughs have been reported in the budget talks.

The Bank of Japan left its policy stance unchanged as expected.  There were no meaningful surprises in the press conference.  Officials are hopeful about continuing recovery and gradually rising inflation.

The dollar is 0.6% stronger against sterling but unchanged against the kiwi and yuan.  The dollar also shows gains of 0.3% relative to the Swiss franc, 0.2% vesus the euro and 0.1% vis-a-vis the loonie but had slipped 0.3% against the Australian dollar and 0.1% relative to the yen.

Stocks in the Pacific Rim slid by 0.9% in Japan, 0.7% in Indonesia, 0.5% in Australia, 0.3% in Hong Kong, 0.2% in Singapore and 0.1% in South Korea.  Italian equities (+1.4%) continued their relief rally following the government’s survival.  Share prices are also up 0.6% in Spain and France and 0.2% in London.  The German Dax is unchanged.

The ten-year sovereign debt yields in Britain, Germany and Japan show overnight gains of five, two and one basis points.

The price of WTI crude oil is up 0.3%.  That of gold has dipped by 0.1%.

China continues to celebrate the 64th anniversary of the Mao-led Communist Revolution.  China’s government-authorized CFLP service-sector purchasing managers index rose 1.5 points to a six-month high of 55.4 in September.

Germany’s construction-sector purchasing managers index fell three points to a reading of 52.1 in September from a 17-month peak in August.  The survey also signaled intensifying price pressure.

The Hong Kong PMI index straddled the 50.0 no-change threshold in September after back-to-back 49.7 readings in July and August.  New orders remain weak.

India’s service-sector PMI fell three whole points to 44.6 in September, lowest since March 2009.  The composite PMI of Asia’s third largest economy declined 1.5 points to 46.1, also a 4-1/2 year low.  That score implies a pretty significant contraction.

Producer prices in Germany dipped 0.1% for a third straight month in August and recorded a 12-month 0.5% rate of decline.  Energy prices dropped 2.0% on year, while all other producer prices were only 0.1% higher than in August 2012.

Euroland producer prices were unchanged on month and 0.8% below a year ago in August.  Energy prices declined 3.3% on year, while other producer prices went up 0.3%.

Industrial production in Ireland dipped 0.1% on month and fell by a steepening 6.7% on year in August.  Czech retail sales climbed just 1.3% in the year to August.

Filipino CPI inflation accelerated to 2.7% in September from 2.1% in August, and core inflation exceeded expectations by a tad.  Producer prices dropped 5.9% in the year to August despite a month-on-month advance. Malaysia’s MYR 7.1 billion trade surplus in August was 2.5 times bigger than in July.

Several Federal Reserve officials including Kocherlakota, Stein, Dudley and Lacker speak publicly today.  Recent U.S. data and the government shutdown appear to vindicate the FOMC’s decision last month not to begin reducing its asset purchases.  The Fed’s policy is to be data driven, but what’s an investor to do when a shut government isn’t measuring economic trends?

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

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