Disappointing British and Chinese Data ahead of U.S. Jobs Report

January 10, 2014

British industrial production and factory output each stagnated in November, cutting the former’s 12-month rate of increase to 2.5% from 3.2%.  Construction output dropped 4.0% on month, and same-store British retail sales posted an on-year 0.4% increase last month, the smallest such gain in eight months.

China’s trade surplus contracted 24% last month to $25.64 billion, the smallest surplus since September.  On-year export growth of 4.3% was the least since September as well and well below the 8.3% pace of import expansion, which was the largest such gain since July.

Japanese international reserves fell $8.5 billion to $1.2668 trillion in December but was only 1.3 billion less than at end-2012.

Japan’s index of coincident economic indicators rose in November to 110.5, best since July 2008.  The index of leading economic indicators printed at 110.8, up a full point from October’s reading.  Japanese stock and bond transactions generated a JPY 615 billion net capital inflow last week versus a 303 billion yen outflow in the final full week of 2013.

Peru’s central bank as expected retained a 4.0% reference interest rate.  That central bank had surprised analysts with a 25-basis point rate cut in November.

Ahead of the monthly U.S. Labor Department jobs report due at 13:30 GMT, the dollar shows overnight gains of 0.4% against the kiwi and sterling, 0.2% versus the yen, and 0.1% relative to the euro, Swissie, and loonie.  The Aussie dollar is unchanged, and the yuan has strengthened 0.1%.

Share prices closed mixed in Asia but are up in Europe.  Stocks fell by 1.6% in the Philippines, 0.8% in China, 0.4% in South Korea and 0.2% in Australia but rose 1.3% in Indonesia, 1.0% in New Zealand, 0.3% in Hong Kong and 0.2% in Japan, Taiwan and India.  In Europe, the British Ftse is 1.0% higher, and stocks in Germany, Spain and France have risen by 0.9%.  Italy’s market is 0.7% stronger.  Alcoa starts the 4Q U.S. corporate earnings season later today.

The ten-year British gilt yield fell by five basis points after softer-than-expected statistics.  The German bund has edged a basis point lower, while the Japanese JGB is steady.

WTI crude oil climbed 1.1% to $92.63 per barrel.  Gold is 0.3% firmer at $12333.30 per ounce.

The Bank of France’s business sentiment index slid a point to a reading of 100 in December.  French industrial output, however, surprised on the upside with a 1.3% month-on-month advance in November (but just 1.5% from November 2012).

In other European industrial production news, Spain reported a 0.2% uptick in November and a calendar-adjusted 2.7% 12-month rate of rise.  Swedish output leaped 5.7% on month and was 3.5% greater than in November 2012.  Dutch factory output fell 0.5% on month and was a mere 0.9% greater on year.  Danish production dropped 2.4% after a 0.8% October increase. 

The final estimate of euro area GDP growth in 3Q confirmed a positive pace of only 0.1% but bumped up the 12-month change by a tenth percentage point to a drop of 0.3%.

Norwegian consumer prices slid 0.1% on month and decelerated from a 12-month increase of 2.5% in November to 2.0% in December.  Swiss consumer prices fell 0.2% in December, leaving the 12-month increase at 0.1%.  The seasonally adjusted Swiss jobless rate stayed at 3.2% last month.  Danish consumer prices rose just 0.8% between end-2012 and end-2013.

New Home sales in Australia jumped 7.5% in November, most in nearly four years.

Brazilian CPI inflation ended last year at 5.9%.

Street estimates for growth in U.S. non-farm payroll jobs hover just south of 200K, and the unemployment rate is seen staying at 7.0%.  Canadian unemployment and employment data also get released today.  Bullard of the Fed speaks later.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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