End of February Data Releases

February 28, 2011

Monday’s tend to have fewer data releases than other days of the week but not when they coincide with the end of the month.

Oil prices are steady and below $100 at $97.89 per barrel amid confidence that Gaddafi will be squeezed out of power.

The dollar has lost 0.6% against the euro and 0.7% versus sterling.  The greenback otherwise shows gains of 0.3% against the Australian dollar and 0.2% against the yen, no change versus the Canadian dollar, and dips of 0.1% relative to the Swiss franc, Chinese yuan and New Zealand dollar.

Stocks in the Pacific Rim mostly rose with increases of 1.4% in Hong Kong, 1.3% in China, 1.1% in Sri Lanka, 0.9% in Japan, 0.8% in The Philippines, 0.7% in Taiwan and India and 0.8% in Indonesia, but there were a few exceptions with drops of 0.5% in Singapore, 1.2% in South Korea and 0.1% in Australia.  The British Ftse is off 0.5%, while the German Dax and Paris Cac are marginally higher.

Ten-year German bund and Japanese JGB yields edged a basis point higher, while the 10-year British gilt yields slid one basis points.

Gold is 0.2% higher at $1411.60 per ounce.

Released Japanese data suggest strengthening activity.

  • Industrial production advanced 2.4% in January, less than survey indications. Nonetheless, output was 5.0% above the 4Q level and 4.7% greater than a year earlier.  Corporate surveys suggest a first-quarter recovery of more than 5%, and officials said that output “continues to show an upward movement.”
  • Retail sales rose 4.1% on month in January, beating expectations.  The on-year drop fell to 0.7% for large stores from 1.7% in December.  Total retail sales were 0.1% higher than a year earlier.  Analysts anticipated a 1.5% on-year drop.
  • The manufacturing purchasing managers index rose in February to 52.9, further above the breakeven point, from 51.4 in January, 48.3 in December 47.3 in November and 47.0 in October.
  • Housing starts were 2.7% greater than a year earlier in January, while construction orders recorded a drop of 10.7%.  In December, such had risen 7.5% and 13.1%.  These data can be volatile around yearend.

Data released in Australia showed a 2.8% decline last quarter in corporate profits and a 0.3% rise in private credit.  New Zealand’s trade surplus of just NZD 11 million in January compared to a deficit of NZD 256 million in December.  Imports were 14% greater than a year earlier compared to a 4.3% increase in exports.  New Zealand business sentiment had improved to 34.5 in January from 29.5 in December, but that reading was taken before a damaging earthquake.

Singapore (0.5%) and Malaysia (9.3%) reported vastly different on-year rates of PPI inflation for January.  Malaysian M3 growth accelerated in January to 8.8%, while the jobless rate held steady at 3.2%.  Hong Kong M3 money growth picked up to 9.5% in January from 7.6% a month earlier.

South African M3 growth accelerated to 8.2% in January from 6.9% in December, but private credit growth slowed to 5.0% from 5.6%.

Indonesia’s trade surplus in January ($2.87 billion) was essentially unchanged from December. Turkey’s trade deficit narrowed 16% to $7.3 billion last month.

Consumer prices in the euro area fell 0.7% in January, causing the 12-month inflation rate to climb by 0.1 percentage points (ppts) to 2.3%, not 0.2 ppts as preliminary data had suggested.  Energy prices jumped 3.0% on month and 12.0% on year.  Non-energy consumer prices fell 1.1% on month and recorded an unchanged 1.3% 12-month rate of increase.  Core inflation edged up a tenth of a basis point to 1.1 to 1.2% on the two widely followed measures of core.  The ECB meets later this week.  While a rate hike is not expected, inflation warnings may be expressed in harsher language.

German import prices increased 1.5% on month in January and 11.8% on year.  Non-oil import price inflation of 9.3% last month compared with 9.2% in December and 7.7% in October.

Spanish consumer price inflation in February of 3.4% was higher than forecast.  Spain recorded a EUR 3.1 billion current account deficit in December.

Several European countries released PPI figures.  Total French producer prices in January rose 0.8% on month and 5.2% on year.  Domestic producer prices advanced 0.9% on month and 5.6% on year.  Icelandic producer price inflation slowed to 0.9% from 2.6%, while Dutch PPI inflation accelerated further to 11.2% from 10.8%.  Swedish producer prices fell 1.7% last month and were merely 0.5% greater than a year earlier.  Greek producer price inflation slowed to 7.3% last month from 7.6% in the year to December.

The volume of Swedish retail sales was 2.9% greater than a year earlier in January, down from a 12-month 3.1% rise in December.  Sweden’s seasonally adjusted trade surplus widened to SEK 10.9 billion in January from SEK 10.7 billion in December.  Irish retail sales posted a third straight monthly drop in January, this time a decline of 3.8%.  The Fine Gael Party won 70 of 154 seats in last week’s election and will head a coalition.  This change of the Irish government was foretold in opinion polls and is not expected to change the thrust of fiscal policy.

Hawkish Swedish Riksbank minutes from the mid-February meeting pushed the krona higher.  Not only might the benchmark interest rate get raised more often this year but the size of the increases, 25 basis points heretofore, could be increased.

South Korea’s finance minister denied allegations of a soft won policy.

Indian GDP was 8.2% higher than a year earlier in 4Q10.  On-year growth averaged 8.4% in the second half of 2010. 

Danish GDP unexpectedly fell 0.4% last quarter, trimming on-year growth to 2.7% from 3.3%.  Growth in calendar 2010 averaged 2.1%.

Czech M2 growth accelerated to 3.6% in January from 3.3% in December, while Hungary’s average jobless rate of 11.2% in November-January was higher than the 4Q10 mean of 10.8%.

This will be a big day as well for the release of North American data.

  • Canada reports fourth-quarter GDP and current account figures, as well as December GDP.
  • The slate of U.S. indicators includes the Chicago and Milwaukee purchasing manager surveys, pending home sales, personal income and spending, and the Dallas Fed index.  Dudley and Rosengren of the Fed have speaking engagements today.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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