U.S. Jobs Day Culminates First Week of 2017

January 6, 2017

Prior to the Labor Dept report, the dollar showed overnight gains of 0.5% against the yen and sterling, 0.6% versus the yuan and 0.2% relative to the euro, Swissie and loonie. Lesser changes were recorded against the Aussie and New Zealand dollars. The Mexican peso was 0.4% higher.

Ten-year German bund and British gilt yields had risen one and three basis points. The 10-year JGB was flat.

Share prices had fallen 0.4% in China and 0.3% in Japan and India. The Paris Cac was down 0.3%, as were stocks in Italy. The German Dax and British Ftse had edged off a basis point.

West Texas Intermediate oil rose 0.5% to $54.05 per barrel. Comex gold at $1,176.40 had slipped 0.4% overnight.

Economic sentiment in the euro zone surpassed expectations last month, increasing 1.2 points to 107.8, best in over a year. All components of the measure improved in December. The business climate index printed at 0.79, up from 0.41 in November and the best score since June 2011.

Retail sales volume in the euro area slid 0.4% in November but was 2.3% higher than a year earlier. Sales in October-November averaged 0.9% higher than the third-quarter mean.

Ezone retail sales were depressed in November by a 1.8% drop in Germany that reversed part of a 2.5% increase the month before. Compared to November 2015, German sales rose a respectable 3.2%.

German industrial orders traced a similar pattern to retail sales, dropping 2.5% in November after soaring 5.0% in October. The on-year advance was 3.0%, and October-November orders were 3.7% greater on average than i n 3Q.

France recorded a EUR 2.3 billion current account deficit in November after a shortfall of EUR 3.2 billion in October. The trade gap shrunk to EUR 4.37 billion from EUR 5.15 billion.

British unit labor costs jumped 0.9% in the third quarter and were 2.3% higher than a year earlier. The increase exceeded forecasts.

Officials at the People’s Bank of China allowed the yuan’s reference rate, which they set daily, to rise sharply. Chinese government officials indicated a readiness to retaliate against U.S. protectionist barriers with similar sanctions.

Japanese labor cash earnings were 0.2% greater than a year earlier in November. Government and BOJ officials want such to accelerate. Japanese stock and bond transactions in the final week of 2016 generated a net 1.398 trillion yen capital inflow, which was much greater than the JPY 117 billion inflow in the prior week.

The National Bank of Romania retained a 1.75% central bank interest rate as expected. It’s been at that level since a 25-basis point cut in May 2015 culminated nine such moves done beginning in January 2014.

In the year to November, industrial production rose 14.8% in Ireland, 0.6% in Hungary and 7.0% in the Czech Republic but fell 1.3% in Norway. Over the same span, retail sales advanced 9.3% in Romania and 4.7% in Hungary.

Australia experienced an unexpected A$ 1.243 billion goods and services trade surplus in November versus deficits of A$ 1.119 billion in October, A$ 662 million in September and A$ 2.727 billion in November 2015. Between October and November, exports leaped 8.4%, but imports dropped 1.4%.

Canada and the United States release trade and jobs data today.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without expressed permission.

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