Soft Japanese and Chinese Economic Statistics
March 10, 2014
Soft Japanese and Chinese data sent stocks lower in the Pacific Rim, but European markets have strengthened.
U.S. clocks were put an hour ahead, shortening the time difference between EDT and GMT to four hours but lengthening the differential between Tokyo and New York to 14 hours.
The situation in Crimea remains very tense.
China reported
- The second largest trade deficit ever and the first one since March 2013. An 18.1% on-year plunge in exports, partly related to the Lunar New Year, led to a $22.98 billion deficit in February following a $31.86 billion surplus in January. Imports were 10.1% higher than a year earlier after posting a 10.1% advance in the 12 months to January.
- CPI inflation of 2.0% in February, lowest since January 2013. Consumer prices rose 0.5% between January and February.
- A 2.0% 12-month rate of producer price deflation in February, most since a 2.3% decline in the year to July 2013.
- Weaker bank lending of 644 billion yuan in February than forecast.
- Similar on-year growth of 13.3% for M2 money and 7.0% for M1 to what analysts were expecting but a smaller-than-anticipated 3.3% rise in M0.
Among reported Japanese statistics,
- Real GDP growth last quarter got revised downward from 1.0% at a seasonally adjusted annualized quarter-on-quarter rate to 0.7%. Personal consumption and public-sector demand went up by 1.6% and 3.4%. Residential investment soared 17.6%, but other business investment only rose 3.0%. Import leaped 14.7% versus export growth of just 1.7%, so net exports exerted a 2.1 percentage point drag on the quarterly growth rate. The impact of inventories was trivial. Real GDP increased 2.6% on year after a 0.3% dip in the year to 4Q12. The GDP price deflator was 0.3% lower than a year before. Real GDP climbed 1.5% in calendar 2013.
- The economy watchers index, a gauge of service sector activity, fell further to a reading in February of 43.0 from 54.7 in January and 55.7 in December. The economy watchers index outlook subcomponent weakened even more sharply.
- Bank lending grew more slowly in February, 2.2% on year after 2.3% in January, and matched the pace in the final quarter of 2013.
- There was a record current account deficit in January of 1.589 trillion yen unadjusted versus a shortfall of JPY 348 billion in the first month of 2013. Merchandise imports soared 30.3% on year, while merchandise exports went up 16.7%. The seasonally adjusted current account deficit equaled JPY 588 billion.
- But the customs clearance-basis trade deficit of JPY 609 billion in the first twenty days of February was 34.7% smaller than a year earlier.
- There were 14.6% fewer bankruptcies last month in Japan than a year earlier. That was a greater drop than the decline of 7.5% in January.
The dollar is unchanged since Friday’s closing against both the yen and euro. The greenback has appreciated 0.5% against sterling, 0.4% versus the Australian dollar, 0.2% relative to the Chinese yuan and 0.1% against the loonie and Swiss franc. The kiwi strengthened 0.1%, buoyed by news that manufacturing activity last quarter posted the greatest increase, 6.3%, in six years.
Equities dropped by 3.3% in China, 1.8% in Hong Kong, 1.0% in Japjan and South Korea, 0.9% in Australia, and 0.6% in Taiwan. But in Europe, stocks are up 0.9% in Italy, 0.8% in France, 0.7% in Spain, and 0.4% in Britain. The unchanged German Dax and Swiss SMI (-0.1%) have not done as well.
West Texas Intermediate crude oil fell by 1.4% to $101.14 per barrel. Gold dipped 0.1% to $1,336.90.
German bunds and Japanese JGBs are steady. The 10-year British gilt yield edged a basis point higher to 2.80%.
The Bank of France’s monthly business sentiment index for France fell to a reading of 98 last month from 99 in January, 100 in December and 101 in November.
Euroland’s Sentix measure of investor sentiment improved to 13.9 in March from readings of 13.0 in February and 11.9 in January.
Industrial production in Italy rebounded 1.0% in January and was 1.4% higher than a year before. Spanish industrial output climbed 1.1% but was 0.1% softer than in January 2013. Finnish industrial production dropped 3.5% on month but exceeded the January 2013 level by 7.5%. French industrial production declined by 0.2% in February after a 0.6% drop in January. However, the December-February period saw French output increase by 0.4% on quarter and 1.1% on year.
Ireland’s construction purchasing managers index jumped 1.5 points in February to a three-month high of 56.2.
In the year to February, Greek consumer prices fell by 0.9%, and Norwegian consumer prices went up 2.1%. Danish CPI inflation was just 0.5%. Norway’s PPI was 4.0% higher than in February 2013.
Industrial production in Turkey climbed 1.1% on month in January and accelerated slightly to a 7.3% on-year advance.
Canada releases housing starts today, and the Mexican trade balance is due. There are no meaningful U.S. releases, but Plosser of the Philly Fed speaks publicly.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese trade, CPI and PPI, Japanese GDP and current account