More Inflation Data, Japanese Current Account, and Chinese Trade Figures Released
January 14, 2020
Compared to closing levels yesterday, the dollar is unchanged against the yen, peso, and sterling, up 0.3% against the kiwi, 0.2% versus the euro, and 0.1% relative to the Canadian and Australian dollars but down 0.2% against the Swiss franc and 0.1% versus the Chinese yuan. Phase One U.S.-Sino trade pact is reportedly ready to be signed tomorrow.
Today’s been quiet on the central banking front, but the Fed’s Beige Book and Bank of Japan quarterly branch managers’ report on regional economic conditions will be published tomorrow.
Share prices in the Pacific Rim climbed Tuesday by 0.9% in Australia and New Zealand, 0.7% in Japan, 0.6% in Taiwan and Singapore, 0.5% in Indonesia, and 0.4% in South Korea but dipped 0.3% in China and 0.2% in Hong Kong. In Europe, Spain’s equity index is off 0.5%, while the German, French and Italian exchanges show even more marginal losses.
Ten-year sovereign debt yields fell two basis points in the U.K. and a basis point in Germany. The 10-year Treasury yield is steady, and its Japanese counterpart is a basis point firmer at zero percent.
West Texas Intermediate crude oil has risen 0.9%, while Comex gold is 0.5% softer.
U.S. consumer price inflation accelerated a bit less than anticipated in December to a 14-month high of 2.3% from 2.1% in November and a recent low of 1.6% last June. Average inflation in the second half of 2019 was 1.9%, still a half percentage point less than in the second half of 2018. Core CPI inflation held steady at 2.3% for a third straight month, and the food component eased to a 1.8% 12-month rate of rise from 2.0% in November and 2.1% in October. Higher overall CPI inflation reflects a swing in the energy component from -4.2% in October to +3.4% in December. The year-on-year increase in real average hourly earnings slowed to a lowly 0.6% from 1.1% in the prior month.
Indian wholesale price inflation accelerated two percentage points to 2.6% in December, which represents a 7-month high. All major components of the index moved higher.
Romanian CPI inflation rose 0.2 percentage points to a 5-month high of 4.0% last month. Hungarian CPI inflation was also at 4.0% in December, the most in 7 years.
Finnish CPI inflation of 0.9% in December was the highest since September, and Greek import price inflation leaped from -0.1% in October to 4.0% the following month.
Japan’s seasonally adjusted current account surplus widened 3.6% to JPY 1.795 in November in spite of a smaller merchandise trade surplus. The unadjusted JPY 1.44 trillion current account surplus was considerably greater than JPY 821 billion a year earlier and reflected increased on-year declines of 16.6% in imports and 10.2% in exports.
China’s $46.79 billion trade surplus last month, a six-month high, was almost $9 billion wider than the November surplus but $10 billion smaller than the December 2018 surplus. There was a 16.3% on-year leap in imports, most since October 2018, but strong export growth also returned at 7.6% after four straight 12-month declines. The calendar year surplus widened to $425 billion in 2019 from $351 billion in 2018.
Japan’s economy watchers index printed below the depressed 40 level for a third straight month but, at 38.4 in December, was slightly higher than the two prior readings. This index captures the perceptions of service sector workers regarding economic activity. In two other Japanese releases, on year growth in bank lending slowed last quarter to an even more depressed 2.0% from 2.1% in 3Q, and there was an upsurge in bankruptcies, which exceeded their year-earlier level by a 5-month high of 13.2%.
U.S. small business sentiment regressed in December by two full index points to a 2-month low of 102.7. That level was also below the second-half average.
Romanian on-year GDP growth in the third quarter of 3.0% was its lowest since the spring of 2014. Hungarian industrial production in November was 3.6% greater than a year earlier versus 12-month advances of 11.1% in September and 6.1% in October.
Turkish retail sales were 18.5% greater than a year before in November, and industrial production posted its largest 12-month rate of increase (5.1%) in 18 months.
Housing permits in New Zealand proved much weaker than forecast during November, dropping by 8.5% from October’s level.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: China trade surplus, Japanese current account, U.S. CPI