Asian Equities Still Reeling

January 11, 2016

The Japanese market was closed Monday in observance of the Coming of Age holiday, but other stock markets in the region suffered further heavy losses, led by a 5.3% plunge in China’s Shanghai Composite index.  Stocks closed down 3.5% in Hong Kong, 1.8% in Indonesia, 1.5% in Singapore, 1.3% in Taiwan, 1.2% in South Korea and Australia and 0.9% in New Zealand.  In Europe, share prices so far are 0.6% lower in Greece and down 0.4% in Switzerland, 0.3% in France, and 0.2% in the U.K., Germany, and Italy.

Chinese consumer prices increased 0.5% on month in December, but the 12-month rate of climb was just 1.6% compared to 1.5% in December 2014 and a target of 3.0%.  On-year producer price deflation was at 5.9% for a fifth straight month in December.  In the prior year to December 2014, producer prices fell 3.3%.

Fear persists that China’s state-controlled currency is poised for a bigger devaluation in spite of intensifying intervention support by the People’s Bank of China.  The yuan, Aussie dollar and sterling rose 0.3% against the U.S. dollar, which otherwise shows gains of 0.2% versus the yen and euro and 0.1% relative to the Swiss franc but dips of 0.2% vis-a-vis the loonie and 0.1% against the kiwi.

West Texas Intermediate crude oil dived another 1.8% to $32.58 per barrel.  Comex gold edged 0.1% lower to $1,103.55 per troy ounce.

Ten-year sovereign debt yields ticked up a basis point in Great Britain and stayed unchanged in Germany.

The Sentix measure of investor sentiment toward the eurozone weakened more sharply than forecast in January due to the first adverse assessment of the U.S. economic outlook in 39 months.  The Sentix printed 6.1 points lower at 9.6, a 12-month low.

Egypt’s non-oil private purchasing managers index rebounded 3.2 points above November’s record low of 45.0 to print at at a 3-month high of 48.2 last month.

The Irish construction purchasing managers index improved 3.1 points to a 5-month high of 58.6 in December.  Construction in Ireland has expanded since August 2013.

Swiss retail sales slumped 2.1% between November 2014 and November 2015.

Danish consumer prices increased 0.5% on year in both December and 2015 as a whole.  The calendar year advances was the smallest in 62 years.  Danish industrial production fell 1.5% in the year to November, and that Nordic economy recorded bigger surpluses that month than in October of DKK 11.9 billion in the current account and DKK 5.7 billion in the trade balance.

Norwegian producer prices plunged by a considerably greater 10.8% in the4 year to December.  In the same span, consumer prices rose 2.3% overall and 3.0% among core items.

Malaysian industrial output was much weaker than forecast in November, dropping 1.1% on month and rising 1.8% on year after a 4.2% on-year advance in October.  Spanish industrial output was flat in November but 5.7% higher on year.

Turkey’s current account deficit ballooned to $2.105 billion in November from $135 million in October.  The Cypriot trade deficit narrowed 6.4% on month to EUR 291 million in November.  Romania’s trade deficit of EUR 784 million in November was 10.8% smaller than that of October.

Building permits in New Zealand rose 1.8% on month in November after an outsized 5.1% jump in October.

The Fed reports its monthly labor market conditions index today, and Lockhart and Kaplan are two of the Fed officials speaking publicly today.

Canadian housing starts and Mexican trade data and industrial production will be released today as well.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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