All Quiet on the Scottish Front
September 19, 2014
The referendum on Scottish independence was defeated by a 55-45% vote and in 28 of 32 constituencies.
In relief, the British Ftse has risen 0.7%. Equities advanced 1.6% in Japan, 0.7% in China, 0.6% in Hong Kong, 0.5% in New Zealand, 0.4% in Indonesia and 0.3% in South Korea and Australia. The German Dax and Spanish IBEX show gains so far of 0.7% and 0.8%, while stocks are up 0.4% in Italy, 0.3% in Switzerland and 0.1% in France.
The dollar is mostly stronger, having advanced 0.5% vis-a-vis the Swiss franc, 0.4% versus the euro, 0.2% against the Australian dollar and yen and 0.1% relative to the loonie and yuan. An understandable exception is sterling, but its rise has been just 0.1% versus the dollar. The kiwi is unchanged ahead of Saturday’s election in New Zealand.
Gold and oil have softened 0.4% to $1,222.40 per ounce and 0.3% to $92.77 per barrel.
The 10-year German bund yield firmed two basis points, while the comparable British and Japanese sovereign debt instruments are steady.
Japan’s government cut its economic assessment in September, claiming that the economy is in a moderate recovery trend, while weakness can be seen in some areas. The assessment went on to say that personal consumption has been paused recently, exports are flat, and business investment has shown some recent weakness.
Japan’s all-industry index, a supply-side monthly proxy of GDP, dipped 0.2% in July. Although industrial production and public administration rose 0.4%, services were unchanged, and construction dipped by a further 0.1%. The all-industry index, which tumbled 3.4% in the second quarter, was 0.2% lower in July than its 2Q average level and was 1.5% weaker than a year earlier.
Japanese stock and bond transactions generated a JPY 1.129 trillion net capital inflow last week, more than reversing a 443 billion yen outflow in the prior week.
Japan’s July index of leading economic indicators got revised downward 1.1 points to 105.4 but still exceeded the June reading by 0.7 points. The index of coincident economic indicators was at 109.9, a rise of 0.6 points from June, but was still labeled “weakening” by the authorities.
Japanese department store sales slid just 0.3% on year in August following 12-month rates of decline of 2.5% in July, 4.6% in June and 4.2% in May.
New Zealand consumer confidence reversed a third of August’s decline in September, rising 1.8% on month. South Korean producer prices slid 0.1% on month and 0.2% on year in August, marking the first negative year-over-year pace since April.
German producer prices slid 0.1% on month and 0.8% on year in August, matching July’s results. Energy, down 0.2%, accounted for all of August’s month-on-month drop, while all other producer prices were collectively unchanged. Between August 2013 and August 2014, energy sank 3.1%, and non-energy producer prices edged 0.2% higher.
Germany’s index of leading economic indicators dipped another 0.2% in July.
The euro area scored a EUR 18.7 billion current account surplus in July, similar to June’s EUR 18.6 billion surplus. The current account surplus during the past twelve reported months equaled 2.5% of GDP, up from 2.1% of GDP in the prior 12 months. In August, a weaker trader surplus was offset by improvements in net services and transfer payment flows.
Icelandic GDP fell 1.2% last quarter but surpassed its year-earlier level by 2.4%.
North American data releases today will cover Canadian consumer prices and wholesale sales plus the U.S. index of leading economic indicators.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland current account, Japanese all-industry index, Scottish referendum results