Holiday Mood Extended by U.S. Storm

January 3, 2014

The greatest disruption to market rhythm at yearend occurs when Christmas and New Years Day fall on a Wednesday.  Any semblance of normal trading conditions was stymied further today by a blizzard in the U.S. northeast.

Yesterday’s selloff in share prices extended into Asia, with losses of 2.2% in Hong Kong, 1.6% in Indonesia, 1.4% in Singapore, 1.3% in China, 1.1% in South Korea and 0.8% in Taiwan.  Japan remained closed.  Australia (off 0.3%) and New Zealand equities (+0.7%) faired better, and European markets have partly reversed, with gains of 1.1% in Italy, 0.7% in France, 0.5% in Germany, 0.6% in Spain and 0.4% in Britain.

The dollar is mixed, recording rises of 0.3% against the euro and Swiss franc and 0.2% versus sterling but declining by 1.3% relative to the kiwi, 0.9% vis-a-vis the Australian dollar, 0.5% against the loonie and 0.3% relative to the yen.  The yuan is unchanged.

Oil is steady at $95.40 per barrel of WTI.  Gold is 0.3% firmer at $1229.30 per ounce.

The ten-year British gilt yield edged a basis point higher, but the 10-year Treasury yield is off three basis points.  German Bunds are steady.

More purchasing manager survey results were published.

  • China’s CFLP non-manufacturing PMI slid back to a 4-month low of 54.6 in December from 56.0 in November.
  • The Swiss manufacturing PMI dropped 2.4 points to 53.9.
  • The British construction-sector PMI backed off a half-point but remained above 60 with a reading of 62.1.
  • JP Morgan’s estimate of the global manufacturing PMI edged up 0.2 points to 53.3 in December, led by the jobs component.

According to the British Nationwide housing market measure, home price inflation accelerated to 8.4% last month from less than 7% in November. 

Ezone M3 was 1.5% higher in November than a year before versus a 1.4% October-over-October increase.  However, the September-November M3 mean showed reduced 1.7% on-year growth after 1.9% in the three months to October and 2.2% in the three months to September.  Credit and bank lending to the private sector posted on-year declines of 1.6% and 2.3%, which were both larger drops than in October.  Marketable instruments (M3-M2) fell 16.2% between November 2012 and November 2013.

The Swiss index of leading economic indicators rose 0.1 points to a reading in December of 1.95.

Finally, a bunch of price data came out.  In Turkey, PPI inflation jumped back to 7.0% in December from 5.7% in November, while CPI inflation elevated to 7.4% from 7.3%.  Italian CPI inflation stayed at 0.7% in December, while Spanish 0.3% CPI inflation that month was also the same as in November.  Consumer prices in Cyprus fell by 2.3% between end-2012 and end-2013.  The most troubled economies in the euro area are already in deflationary waters even if the region as a whole is not.

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

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