Torrential Data and Continuing High Market Volatility
September 30, 2015
Considerable economic data were released on this final day of the third quarter.
Markets await speeches from Fed Chair Janet Yellen and New York Fed District President Dudley.
Share prices rebounded 2.1% in Australia, 1.9% in Hong Kong, 1.5% in India, 1.1% in Indonesia, 2.7% in Japan, 1.0% in South Korea and 0.8% in China.
Stocks in Europe currently show gains exceeding 2.0% in the U.K., Germany, Italy, Spain, France and Switzerland.
The dollar has appreciated 0.4% against the yen and euro and 0.3% versus the Swiss franc but has lost 0.6% relative to the Aussie dollar, 0.5% vis-a-vis the kiwi, and 0.1% against the yuan, loonie and sterling.
Gold and oil are down 0.3% at $1,123.85 per ounce and $45.11 per barrel.
Ten-year sovereign debt yields rose four basis points in Britain, two bps in Japan and a single bp in Germany. A rate rise is indicated in U.S. futures.
Japanese data releases today accentuate the negative.
- Industrial production fell 0.5%, defying expectations of a 1% advance and the government’s prediction a month ago of a rise of 2.8%.
- Officials downgraded the assessed production trend to “has weakened,” the lowest designation since August 2014.
- Retail sales increased 0.8% on year in August, down from 12-month advances of 1.8% in July and 2.9% in the second quarter.
- Large-store sales growth slowed to 1.8% from 2.1% in July and 4.4% in the second quarter.
- Motor vehicle production was 4.7% lower in August than a year earlier.
- Construction orders fell 15.6% in the year to August, four times faster than in the year to July.
- Housing starts, however, showed more acceleration than forecast, posting a 12-month 8.8% increase.
Eurozone CPI inflation slipped into the red, recording a 0.1% year-on-year dip in September versus a 0.1% rise in August, 0.2% increases in June and July and 0.3% in May. Core inflation remained at 0.9%, but energy posted an 8.9% 12-month decline.
Eurozone unemployment stayed at 11.0% in August, but youth unemployment edged up 0.1 percentage point to 22.3%.
German retail sales volume fell 0.4% in August after a 1.6% rise in July and a 0.3% drop in 2Q. Sales were 2.5% greater than a year earlier.
German employment ticked only 2K higher in September and showed no net change over the past six reported months. The jobless rate has been at 6.4% all that time.
British real GDP rose 0.7% on quarter in 2Q and 2.4% on year, down from a year-over-year increase of 2.9% in the first quarter. The U.K. current account deficit narrowed to GBP 16.967 billion in the second quarter from 24.009 billion pounds in 1Q and GBP 19.01 billion in the second quarter of 2014.
The Nationwide index of British house prices rose 0.5% on month in September and 3.8% on year. On-year house price inflation of 3.5% in 3Q was down from 4.4% in 2Q and 5.9% in the first quarter of 2015.
British consumer confidence fell four points to a reading of 3 in September.
The UBS Swiss consumption indicator rose 0.04 points to 1.63 in August, but the KOF index of Swiss leading economic indicators fell 0.8% in September.
French real consumer spending was unchanged in June and just 1.6% greater than a year earlier.
French and Italian producer prices declined 2.1% and 2.9% in the year to August. Italian consumer prices slid 0.3% on month in September versus a projected rise of 0.7% and were just 0.3% higher than in September 2014. Producer prices in the year to August tumbled 9.9% in Greece and 5.9% in Cyprus. Such fell 1.5% in Austria and 1.1% in Hungary. Iceland’s PPI rose 1.5%, but Malaysia’s fell by 0.3%.
Building permits in August fell 6.9% in Australia and 4.9% in New Zealand. Australian private credit growth in the year to August was 6.3%. In the same span, M3 money rose 9.0% in New Zealand and 10.0% in South Africa.
In the year between 2Q14 and 2Q15, real GDP rose 1.8% in Denmark and 4.6% in the Czech Republic.
Iceland’s seven-day central bank collateralized lending rate, which was raised in August, was left unchanged after today’s monetary policy meeting, but reserve requirements were doubled to 4%. Also, officials warned that the interest rate would be raised additionally if inflation follows wages upward.
The National Bank of Romania left its 1.75% monetary policy rate unchanged. Such was cut four times, each by 25 basis points, between the start of 2015 and May 6.
U.S. mortgage applications fell 6.7% last week after jumping 13.9% in the prior week. The 30-year fixed mortgage rate dipped a basis point to 4.08%.
The Chicago and Milwaukee regional manufacturing purchasing managers monthly surveys will be reported today. The Bank of Japan’s quarterly Tankan survey of corporations is due tonight, and Thursday also sees the release of numerous manufacturing PMI reports.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British GDP and current account, Dudley, eurozone CPI and unemployment, Japanese industrial production, Yellen