Electoral College Honors Voters’ Choice and Picks Biden; Data Focus on China

December 15, 2020

The dollar is little changed today. It’s biggest move, a 0.4% decline against sterling, comes as trade talks were extended past the deadline and as British labor market data revealed a full return of average wage earnings growth to the pre-pandemic pace but also a larger-than-forecast 64.3k jump in jobless insurance claims due to a second Covid lockdown in Britain.

U.S. stock market futures point to a higher open. The U.S. electoral college stood its ground against Trump, who defiantly refuses to concede and promises to fight on. William Barr is out as Attorney General. Trump hopes the acting AT Rosen will take action where Barr wouldn’t go. President-Elect spoke to the nation, documenting the decisiveness of the election outcome and saying it’s time to turn the page. Vaccinations of priority individuals began in the U.S. even as the death count crossed above 300k. Cases and deaths in the U.S. exceeded 200k and 1600 in the past 24 hours.

Stock markets closed mostly down in Asia and are  mixed in Europe.

Ten-year sovereign debt yields dipped a basis pint in Germany, Japan and Great Britain.

The price of WTI oil firmed 0.3% as OPEC reduced its forecast of global demand. Gold’s price rose 0.9% so far today.

China’s jobless rate dipped to an 11-month low of 5.2% in November. Industrial production posted a 7.0% on-year advance, the most in 20 months, while a 5.0% increase in retail sales over the past 12 months was the most in 11 months. Fixed asset investment growth, which began the year with a 24.5% on-year plunge in January-February, has recovered sufficiently to produce an average 2.6% on-year advance in January-November. Chinese foreign direct investment was 5.5% greater in November than a year earlier and recorded an on-year advance of 6.3% over the first 11 months of this year. China’s was the first economy to be depressed by Covid in 2020 but among the least impacted considering the year as a whole.

U.S. import prices edged 0.1% higher in November and matched October’s year-on-year drop of 1.0%. Non-fuel import prices fell 0.3% on month and rose 1.6% on year. Imported fuel prices were 24.6% cheaper than a year earlier.

French and Italian CPI inflation in November was confirmed at the preliminary readings of +0.2% and -0.2%, respectively. Italy’s deflationary pace was the least pronounced in 5 months.

In other price news, British average hourly earnings rose 2.7% in the year through October; South African producer prices in November were unchanged on month but recorded an 8-month high year-on-year increase of 3.0%; Danish producer prices, in contrast, were down 2.6% from November 2019 levels; and Polish CPI inflation dipped to a 3-month low of 3.0% last month.

The U.S. Empire State manufacturing index slipped back to a four-month low of 4.9 in December.

Consumer confidence in New Zealand, which has been among the most successful countries at combating Covid, soared to a 1-year high of 106.0 this quarter from 95.1 in 3Q.

Indonesian business confidence also improved very sharply in the fourth quarter of 2020, swinging to a reading of +2.21 from -5.97 in 3Q and -13.1 in the second quarter.

¬†South Africa’s leading economic index climbed 3.1% in October and roughly 15% over the past five reported months.

Finland’s monthly activity trend index recorded a ninth consecutive year-on-year drop in October, but the 1.9% slide was the smallest since February.

Just in: U.S. industrial production increased 0.4% last month, a tad above expectations thanks to a much larger-than-forecast 0.8% advance in factory output. Capacity utilization rose 0.3 percentage points to 73.3%, matching its level in November 2019.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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