European GDP Growth Last Quarter Beats Expectations and Lifts Euro

February 14, 2014

The dollar had depreciated by 0.9% against the Swiss franc, 0.8% relative to the euro, and 0.7% versus sterling.  The greenback also lost 0.6% against the yen, 0.7% versus the kiwi, and 0.4% relative to the loonie. There’s been a dip of 0.1% against the Aussie dollar and a 0.1% uptick versus the yuan.

The Japanese Nikkei fell 1.5%, but share prices posted gains of 0.9% in Australia and India, 0.7% in China and South Korea, 0.6% in Hong Kong and 0.5% in Taiwan.  In Europe, stocks are up 1.5% in Italy in spite of the Letta government’s collapse.  The German Dax and Spanish IBEX have risen 0.7%, and the Paris Cac and Swiss SMI are 0.5% and 0.1% firmer.

Gold, $1,318 per ounce now, advanced 1.4% to its best level since early November.  WTI crude oil is 0.4% softer at $99.96 per barrel.

The ten-year German bund and British gilt yields are a basis point firmer.  The 10-year Japanese JGB yield remains at a lowly 0.59%.

Euroland recorded a third consecutive quarter of positive growth in 4Q13, but GDP as a whole fell by 0.4% in calendar 2013.  GDP growth accelerated threefold to 0.3% quarter-on-quarter in 4Q and finally recorded an on-year advance as well, 0.5%.

German GDP went up 0.4% in 4Q, beating forecasts of 0.3%.  From a year earlier, GDP growth accelerated to 1.4% from 0.6% in 3Q and 0.3% in 4Q12.

French GDP growth last quarter also was 0.1 percentage point faster than forecast.  GDP went up 0.3% after no growth in 3Q and was 0.8% higher than in 4Q12.  GDP rose 0.3% in 2013 versus stagnation in 2012.

Italian GDP firmed 0.1% in 4Q following drops of 0.6% in the first quarter and 0.3% in 2Qj, then stagnation in 3Q.  GDP in 2013 slumped 1.9%, but the 4Q13-over-4Q12 decline shrank to 0.8% from a 1.9% contraction in the year to 3Q.

Spanish GDP advanced 0.3% on quarter and dipped only 0.1% on year in 4Q13.

Dutch GDP growth more than doubled to 0.7% in 4Q from 0.3% in 3Q.  GDP was also 0.7% higher than in 4Q12 after a drop of 1.5% in the previous four quarters.

Belgian GDP climbed 0.4%.  On-year growth swung to +0.9% from minus 0.5% in the previous statement year.

Austrian GDP increased 0.3% on quarter and 0.5% on year.

GDP in Cyprus and Greece recorded on-year contractions of 5.3% and 2.6% following declines of 5.3% and 2.6% in the four quarters to 4Q12.

Portuguese GDP went up 0.5% sequentially and 1.6% versus the final quarter of 2012.  GDP contracted 1.4% in calendar 2013 after a drop of 3.2% in 2012.

Finland had no quarters of positive growth in 2013.  GDP fell 0.8% in 4Q and was 1.4% lower than a year earlier.  GDP had contracted 2.2% in the year to 4Q12.

Polish GDP rose 0.6% on quarter and 2.2% on year.  Czech GDP leaped 1.6% on quarter, nearly three times the expected advance, and was 0.8% greater than in 4Q12.  Hungarian GDP rose 0.6% on quarter and 2.8% on year.  Romanian GDP grew 1.7% in 4Q, matching the 3Q outcome, and was 5.1% higher than a year before.

Chinese consumer prices increased 1.0% between December and January, but the 12-month rate of rise held steady at 2.5%, lowest since April 2013.  The Chinese PPI posted a 23rd straight on-year drop, falling 1.6% between January 2013 and January 2014.

Japanese stock and bond transactions last week generated a 592 billion yen net capital outflow, down sharply from a 2.52 trillion outflow in the prior week to February 1, as far less foreign bonds were bought by the Japanese.

New Zealand food prices advanced 1.2% last month to 6.9% above their year-earlier level.

Indian wholesale price inflation continued to subside and at 5.1% in January reached an 8-month low.

Singapore retail sales recorded a 12-month drop of 5.5% in December, smaller than the 8.6% decline in the year to November.

Peru’s central bank retained a 4.0% main interest rate as analysts expected.  Five hikes of 25 basis points had been implemented between January 2011 and May 2011, but this past November saw a surprise 25-bp reduction.

Greek consumer prices fell 1.5% in the year to January, while import prices in December were 0.9% lower than at end-2012.

French nonfarm payroll jobs edged 0.1% higher in 4Q, reversing a drop in 3Q.

British construction output rebounded 2.0% in December following a 4% decline in November.  The 12-month 6.3% increase was close to market expectations.

Finnish retail sales and wholesale turnover posted year-over-year declines of 1.4% and 2.2% in December.  Retail sales edged up 0.1% in calendar 2013.

Spanish CPI inflation ticked downward to 0.2% in January from 0.3% in December. 

Iceland’s unemployment rate rose 0.3 percentage points to 4.5% last month

The euro area trade surplus widened to EUR 153.8 billion in 2013 from EUR 79.7 billion in 2012, as imports fell by 3.3% while exports rose 0.8%.

Canadian manufacturing sales more than reversed November’s rise with a drop of 0.9% in December, but the 12-month rate of rise improved to 2.7%.

U.S. import prices posted a somewhat bigger on-year decline in January of 1.5% and rose 0.1% from December.  Export prices were 1.2% lower than a year before.  Other scheduled U.S. data releases today are industrial production, capacity utilization, and the Reuters/U. Michigan index of consumer sentiment.

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

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