The Week Bridging 2013 and 2014: Part One

December 31, 2013

Compared to closing levels last Friday, the dollar is marginally changed against the yen, euro and Swiss franc but down 0.6% against the loonie, Australian dollar, and sterling and off 0.9% relative to the kiwi.  The Chinese yuan strengthened past 6.06/USD.

Share price movements have been contained to gains of 0.7%, 0.3% and 0.2% in the Nikkei and Dow and a net drop of 0.4% in the German Dax.

Ten-year sovereign debt yields rose four basis points in Japan and three bps in the United States but fell by five bps in Britain and thee bps in Germany.

Oil sank 2.1%, and gold fell 1.2%.

U.S. pending home sales only rebounded 0.2% in November and remained 1.6% lower than a year before, but other meaningful upbeat U.S. data were released.

  • The Case-Shiller home price index posted gains in October of 1.0% from September and 13.6% on year.
  • Although down 3.9 points, the Chicago PMI reading of 59.1 in December is a strong score and 3.4 points higher than in September and 7.5 points better than at midyear.
  • Milwaukee’s manufacturing purchasing managers index climbed 2.1 points to 54.27 in December.
  • The Conference Board consumer confidence index increased 6.1 points to 78.1 in December.
  • The Dallas Fed manufacturing index improved 1.2 points in December.
  • Weekly chain store sales were over 3.0% higher than a year ago.

Greek retail sales fell in October from the prior month and a year earlier.  In contrast, Swedish retail sales climbed 0.9% on month and 4.5% on year in November.  Spanish retail sales were 2.0% greater in November than a year before.

Several countries reported producer price data.  In the twelve months to November such fell by 4.0% in Cyprus, and 2.7% in the Netherlands but rose 2.1% in Malaysia.  South Korea experienced 1.1% December-over-December CPI inflation in 2013.

The injection of liquidity at the end of last week by the central bank in China wasn’t followed up, so short-term Chinese interest rates firmed on the final trading days of the year.

ECB President Draghi threw some cold water on any simmering speculation of a further interest rate cut, implying that officials would have to see signs of deflation or potential deflation surface first.

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

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