Stronger Yen as End-2014 Draws Closer

December 30, 2014

The dollar fell 1.0% against the Japanese yen on balance and got as strong overnight as 119.18 at one point, its best level since December 19.  The yen was buoyed by the Bank of Japan’s announcement that it will be buying JGBs with longer maturities.  The yen’s overnight high against the euro was 145.11.

The Australian dollar touched its weakest level against the neighboring kiwi since 1983.  The U.S. currency has slipped 0.4% against the latter and 0.3% versus the former since Monday’s close.

The U.S. dollar otherwise shows dips of 0.1% against the loonie and sterling and no net changes relative to the euro and Swiss franc.  The yuan strengthened.

West Texas Intermediate oil hit a 5-year low of $52.70 per barrel  but bounced off that level to show a net decline now of just 0.1%. Gold firmed 0.5% to $1,187.60 per troy ounce.

The ten-year German bund and British gilt yields are each a basis point higher.  Greece’s 10-year bond premium relative to German bunds, which catapulted over a percentage point wider on Monday, got slightly further extended today.  Greek snap elections next month are feared likely to aggravate intra-EMU tensions.

Russia’s manufacturing purchasing managers index slumped 2.8 points, most in almost three years, to a reading of 48.9 in December, which signifies the greatest rate of contraction since May.  In November, by contrast, the index touched a 13-month high.  Russia’s service sector PMI recovered from a 5-1/2 year low of 44.5 in November to print this month at 45.8, but the composite Russian purchasing managers index of 47.2 was a 7-month low and the third sub-50 reading in a row.  Russia experience a sharp acceleration of inflation as well, reflecting the ruble’s 42% plunge this year.

Austria’s manufacturing PMI improved 1.8 points to a four-month high of 49.2 in December.

Money growth in the euro area accelerated in November.  M3 posted an on-year increase of 3.1% versus 2.5% in both September and October, thanks primarily to a pickup in M1 money growth from 6.2% in October to 6.9% in the year to November.  Loans to the private sector were 0.9% lower in November than a year earlier; mortgage loans slid 0.2% while loans to non-financial firms dropped by 1.6%.

The government  of China reported a 0.2% drop in its index of leading economic indicators.  Retail sales in Hong Kong rose on year by 7.5% in volume and 4.1% in value in November, far surpassing expectations.  Thailand’s $1.66 billion current account surplus in November was 37% smaller than in October.

South Korea recorded an alltime current account surplus high in November of $11.4 billion, 29% wider than in October, but South Korea also announced that industrial production had fallen 3.4% in the year to November, most in ten months. 

Italian sentiment among manufacturers improved a point to a 5-month high of 97.5 in December.  Overall business sentiment, 87.6, also rose by 1.0.  Italian producer prices posted declines in November of 0.2% on month and 1.2% on year.  Such had declined 1.1% in the year to October.

British house price inflation according to the Nationwide index slowed to a 13-month low of 7.2% in December from 8.5% in November. 

Greek producer prices fell 2.3% in the year to November, more than twice as much as the on-year decline recorded the month before.  Austrian producer prices sank 1.1% on year in November, their largest drop in 21 months. 

Spanish retail sales grew 1.9% on year in November, their greatest increase in 14 months, while a 1.1% drop in Spanish consumer prices in the year to December was the most extreme indication of deflation since July 2009 in the euro area’s fourth biggest economy.

Sweden’s trade balance swung to a SEK 0.7 billion deficit in November from surpluses of SEK 1.1 billion in October and SEK 3.8 billion in November 2013.  Exports were flat on year, but imports grew 5%.

Scheduled U.S. data releases today feature the Case Shiller index of home price inflation and the Conference Board’s latest estimate of consumer confidence.

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

Tags: , ,


Comments are closed.