Several Data Releases but Little Market Movement
December 9, 2019
Markets are mostly marking time ahead of numerous central bank meetings this week and Britain’s momentous election on Thursday.
The dollar is trading very near its closing levels last Friday. The price of gold is 0.2% firmer. That of WTI oil is 0.5% softer.
Stock markets closed 0.3% higher in Japan, South Korea and Australia but are down 0.4% in France, 0.3% in Germany, 0.2% in Spain and 0.1% in the United States.
Ten-year sovereign debt yields settled back two basis points in Germany and the United States and a single basis point in Great Britain.
Japanese real GDP growth last quarter got revised significantly higher to a quarter-on-quarter 1.8% expressed at an annualized rate (SAAR) from a preliminary estimated uptick of 0.2%. Upward revisions were made to consumption (2.2% SAAR), non-residential and residential investment (7.3% SAAR and 6.5% SAAR), and government spending (2.7% SAAR). Growth would have been even stronger except for drags totaling 1.4 percentage points combined from net foreign demand and inventories. Real GDP was 1.7% greater than in the summer quarter of 2018. The GDP price deflator recorded a 0.6% on-year advance.
Japan’s seasonally adjusted current account surplus jumped 16.6% on month to JPY 1.732 trillion in October. The unadjusted surplus of JPY 1.817 trillion was 38% wider than a year earlier despite a 7.9% decrease in exports.
Japan’s economy watchers index recovered to a still very depressed reading of 39.4 in November from 36.7 in October and 46.7 in September. A 1.39% on-year increase in Japanese bankruptcies in November was the third straight 12-month increase but smaller than those in September or October. Year-on-year growth in Japanese bank lending of 2.1% in November after 2.0% in October matched the third quarter’s average pace.
China’s trade surplus in November narrowed to a 3-month low of $38.73 billion and was also smaller than the November 2018 surplus of $41.86 billion due to an unexpected 0.3% rise in imports combined with a 1.1% on-year drop in exports. Chinese FX reserves declined $9 billion in the third quarter of 2019 to $3.906 trillion.
Regarding the euro area, the Sentix investor index improved sharply in December to a 7-month high of 0.7 from a score of -4.5 in November and a recent low of -16.8 recorded in October. Euroland labor costs rose 0.9% on quarter and 3.1% on year in 3Q19, and the euro area employment trends index compiled by the Conference Board increased marginally in November to a 2- month high.
Germany posted a bigger EUR 22.7 billion current account surplus in October than that of EUR 20.3 billion a year earlier, and the surplus in the first ten months of 2019 of EUR 212.6 billion was EUR 12.5 billion wider than a year earlier. The seasonally adjusted trade surplus of EUR 20.6 billion in October was the largest in 17 months and compares to a monthly average of EUR 18.7 billion in the first nine months of this year.
According to the monthly sentiment survey of the Bank of France, confidence of manufacturers and businesses in construction dipped slightly in November, but business confidence in the services rose back to October’s level. The central bank expects French GDP to grow about 0.2% this quarter after 0.3% in 2Q.
The Irish construction purchasing managers index recorded a third straight sub-50 reading in November, but at 48.2 such indicated a slower rate of contraction than in October when the index was 46.2. These readings constitute significant deterioration relative to conditions early in 2019 when the construction PMI exceeded 60.
Swiss unemployment stayed at 2.3% last month.
Denmark experienced its largest monthly current account surplus (DKK 27.4 billion) since at least the start of 2005.
Czech industrial production fell 0.1% on month and 0.4% on year in October.
Norwegian GDP dipped 0.1% last quarter but was 1.3% higher than a year earlier. Cypriot GDP grew 0.4% in 3Q and recorded a 3.2% on-year advance.
Mexican CPI inflation dipped just under 3.00% in November to a 38-month low of 2.97%.
Canadian housing starts in November of 201.3k annualized was smaller than forecast and down considerably from a recent high of 244.4k in June. Building permits slid 1.5% on month and to a 12-month 1.1% rate of increase.
The legendary Fed Chairman, Paul Volcker, from 1979-1987 has died at age 92. Both the FOMC and ECB hold policy reviews later this week.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese trade balance, German current account, Japanese GDP and current account