Favorable Japanese Data Releases

December 28, 2016

Markets that had been closed for holiday on Tuesday reopened but to a continuing trickle of data reports with the exception of Japan, where industrial production, auto output and retail sales were reported.

Japanese industrial production climbed 1.5% in November, warranting an official trend upgrade to “picking up movement” from “shows signs of an increase at a moderate pace. Industrial output advanced 4.6% on year, while the inventory to shipments ratio was 6.6% less than a year earlier. Ministry of Economics, Trade and Industry officials project back-to-back increases in industrial output of 2.0% in December and 2.2% in January.

Retail sales in Japan did not fall on month as analysts predicted but rather edged up by a further 0.2% in November after a 2.5% jump in October. Total retail sales were also 1.7% greater than in November 2015, and large store retail sales only dipped 0.3% on year.

Japanese motor vehicle production advanced 6.6% on year in November compared to a 3.9% 12-month decline recorded in October.

The dollar strengthened 0.6% against the euro, 0.5% versus sterling, 0.4% vis-a-vis the Swiss franc, 0.3% against the yen and 0.1% relative to the Australian dollar and yuan.

The DOW closed on Tuesday just 55 points from the psychologically formidable 20K barrier. Japan’s Nikkei was unchanged today. Elsewhere in the Pacific Rim, share prices rose 2.1% in Indonesia, 1.0% in Taiwan and Australia and 0.8% in Hong Kong, but such fell 0.4% in China. British equities are 0.5% firmer, but the Spanish and German exchanges are down by 0.5% and 0.1%.

Ten-year sovereign debt yields fell three basis points in Britain and a basis point each in Germany and Japan.

Gold is flat at $1,138.50 per ounce. WTI crude oil edged 0.3% higher to $54.04 per barrel, extending the longest streak of appreciation in almost seven years.

Italian consumer confidence improved 3.0 points to a reading of 111.1 in December, while business sentiment in that economy printed at 103.5 versus 102.2 the month before.

The UBS Swiss Consumption Indicator rose 0.04 points to 1.43 in November but from a downwardly revised 1.39 reading in October. October’s level was reported initially as 1.49, and November’s outcome fell short of expectations.

Spanish retail sales were up 3.3% on year in November, the biggest 12-month increase since August. Such had risen 2.1% in the year to October. Sales firmed 0.5% from the month before.

The British Bankers Association reported fewer mortgage approvals in November (40,659) than seen in October or than had been predicted by analysts.

U.S. pending home sales get reported later this morning by the Commerce Department.

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



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