Weak Data Fuels Further Selling Pressure on Oil and Equities

October 10, 2014

Equities sold off further in Asia and Europe.

The dollar is mostly higher.  Many in the U.S. are observing a 3-day weekend for the Columbus Day holiday.

WTI oil dropped more than 1% to $84.55. Gold is 0.2% softer.

10-year gilt yields are five basis points lower.  10-year sovereign debt yields remain below 1.0% in Germany, Japan and Switzerland and at 2.3% in the U.S.

Japanese consumer confidence weakened for a third straight month and fell below the 40.0 threshold.

Japanese bank lending growth of 2.3% on year in September remains weak.  Lending growth of 2.2% in 3Q was the same as in 2Q.

Japan’s tertiary index of service sector activity fell for a second straight month, declining 0.1 in August after -0.3% in July and no change in June.  Activity was also 2.7% lower than in August 2013.

No surprising findings emerged from the Bank of Japan’s minutes of its September 3-4 meeting.  Officials then projected moderate recovery with 1.25% CPI inflation in the short term.

Good news that Britain’s trade deficit narrowed in August was overshadowed by very depressed export and import levels.

Weak industrial production data were announced for a number of economies including France and Italy, where such posted August year-over-year declines of 0.3% and 0.7%.  Consumer price data reported today were likewise very low.

Construction output in the U.K. plunged 3.9% in August and was 0.3% lower than a year before.

The Central Reserve Bank of Peru left its key interest rate at 3.5%, having cut such by 25 basis points last month.

Mortgage lending in Australia posted the greatest monthly drop so far this year in August.

U.S. import prices in the third quarter dropped 0.3% in July, 0.6% in August and 0.5% in September.  They were 0.9% lower on year, with fuel recording a 5.8% fall-off and other import prices rising just 0.5%.  A strong dollar depresses import prices and could keep overall inflation below the Fed’s 2% target for longer.  Some Fed officials worry about this.

Canadian labor statistics were better than expected in September.  The jobless rate fell to 6.8% from 7.0%.  Overall jobs went up by 74.1K, and 93.5% of these were full-time positions.  Private-sector employees soared by 123.6K.

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

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