New Overnight Developments Abroad: Typical End-Month Barrage of Data

February 27, 2009

The dollar and yen recovered.  The greenback is down 1.0% against the yen but shows gains of 1.2% against the Australian dollar, 1.0% against the kiwi, 0.9% versus sterling, 0.7% against the Swiss franc, 0.5% against the euro and 0.4% relative to the Canadian dollar.

Stocks mixed.  In Asia, the Nikkei rose 1.5%, and shares firmed by 0.8% in both South Korea and Taiwan.  But prices fell 2.3% in China, 0.7% in Hong Kong and India, and by 0.4% in the Philippines and Indonesia.  European bourses are sharply lower, with losses of 2.0% in Germany, 1.8% in Britain and 1.6% in France.

Ten-year Bund and Gilt yields are lower. The 10-year JGB is steady at 1.28%.

Oil softened 1.6% to $44.48/barrel, while gold firmed 0.2% to $944.90/ounce, continuing the inverse pattern of those two commodities.

Japan released its CPI, labor statistics, household spending and income, retail sales, industrial output, factory PMI, housing starts, and construction orders:

  • Core consumer prices were unchanged on year in January, not down 0.1% as forecast.  The total CPI fell 0.6% m/m and by 3.1% at a seasonally adjusted annual rate over the past six reported months.
  • Tokyo consumer prices in February slid 0.3% m/m and rose 0.5% y/y.
  • The jobless rate of 4.1% was a half-percentage point lower than anticipated. Jobs fell 0.5% in the year to January, half the on-year loss in December, but the job offers-seekers ratio continued to drop, reaching 0.67 from 0.73 in December and 0.84 in September.
  • Real household spending slumped 0.8% on month in January and by 5.9% from a year earlier. On-year growth in real disposable incomes slowed to 1.0% from 1.6% in December.
  • Large-store retail sales fell 5.6% in the year to December, led by a 12.2% plunge in clothing.  Markets had looked for a somewhat bigger 6.1% drop.  Total retail sales fell 2.4% y/y, more than their decline of 1.5% in the year to 4Q08.
  • Industrial production plunged 10.0% in January on top of declines of 9.8% in December and 8.5% in November.  Official projections for Feb-March imply a 64% annualized decline in the first quarter, worse than the drop of 40% saar in 4Q08.  The ratio of inventories to shipments soared 51.3% in the year to January, and industrial output fell 30.8% over that period.
  • The manufacturing PMI unexpectedly printed a little higher in February at 31.6 after a record low of 29.6 in January.
  • Housing starts plunged by a sharper-than-assumed 18.7% in the year to January. Such had risen 3.1% in 2008.
  • Construction orders plummeted 38.3% on year in January, more than their 27.3% drop in December. Such rose 1.3% in calendar 2008.
  • These data are very weak, but there were some positive surprises.

Private credit growth in Australia rose 0.6% in January, three times more than forecast, and by 6.1% on year. Such follow other upside data surprises earlier this week.

German consumer prices rose 0.6% in February, more than reversing January’s 0.5% drop, and the 12-month rate firmed to 1.0% from 0.9%. The harmonized index of consumer prices went up 0.7% on month.  Higher-than-forecast inflation was attributed to package tours and energy.

Unemployment in Euroland rose another tenth to 8.2% in January and was 0.9 percentage points above the January 2008 level.  The number of jobless now exceeds 13 million workers. Youth unemployment was at 16.9% compared to 14.6% a year earlier.

Harmonized Euroland consumer prices in January fell 0.8% on month and decelerated to a 12-month rate of 1.1% from 1.6% in December, 2.1% in November and a cyclical peak of 4.0% in July. The ECB benchmark rate, by comparison, has been reduced 225 basis points from its summer peak.

Malaysian GDP growth slowed to 0.1% in the year to 4Q08 from 4.7% in the year to 3Q and 7.3% in the year to 4Q07.  On-year growth of slightly over 1% had been expected.

Similarly, on-year growth in India slowed twice as sharply as assumed, printing at a 5-year low of 5.3% in 4Q after 7.6% in 3Q08.

Swedish GDP data confirmed a sharp recession.  GDP fell 2.4% last quarter and by 4.9% from the fourth quarter of 2007.  Consumption, investment, inventories and especially exports all made negative contributions.  In other Swedish data released today, retail sales surprised on the upside with gains of 1.3% on month in January and 2.2% on year, the current account surplus was at SEK 63.6 billion last quarter, and producer prices also surpassed forecasts with gains in January of 0.9% from December and 3.9% on year.

A $1.155 billion South Korean current account deficit was reported for January, and the won weakened to 1542.9/dollar, lowest since March 1998.

Switzerland’s index of leading economic indicators was much weaker than expected, sinking to -1.41 in February from -0.93 in January and +1.61 a year before.

British consumer confidence was not as low as feared in February, edging up 2 points to -35.

South African credit growth slowed to 11.9% in the year to January from 13.6% y/y in December.  This 4-year low supports prospects for further easing of monetary policy.

Canadian producer prices and quarterly current account figures will be released at 13:30 GMT. From the United States arrives revised GDP, the U. Michigan index of consumer sentiment, and the Chicago PMI. Analysts have braced for the possible revision of U.S. growth to a decline surpassing 5% saar from 3.8% reported last month.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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