Crowded Calendar of U.S. Data Releases

January 18, 2012

The dollar declined overnight by 0.7% against the kiwi, 0.5% against the Swissie and euro, and 0.2% versus the Australian dollar, loonie, and sterling.  The yen and yuan are unchanged against the greenback.

Tomorrow begins a week-long celebration of the Chinese Lunar New Year to usher in the Year of the Dragon.  Special importance is attached to such years in China’s rotating calendar.

Share prices were mixed in the Pacific Rim.  Equities fell 1.6% in China, 1.3% in Sri Lanka, and 0.7% in Singapore, but they rose 1.0% in Japan, 0.8% in The Philippines, 0.6% in Indonesia and 0.1% in Australia.  In Europe, the German Dax and Paris Cac have staged tentative rises of 0.4% and 0.3%, while the British Ftse is unchanged.

Sovereign bond yields in Germany, Great Britain, and Japan are little changed.  Today’s auction of 11-month Portuguese treasury bills, the longest such maturity since April, is being watched carefully.  Portugal’s sovereign credit rating was downgraded two notches last week to BB, junk status, and Portuguese 10-year government yields, unlike many others, have rose at the start of this week.

On the commodity front, Gold edged 0.1% lower to $1653.90 per ounce, while oil prices firmed 0.6% to $101.30 per barrel overnight.

The World Bank released new semi-annual GDP forecasts.  Projected world growth this year was revised down 1.1 percentage points to 2.5%, while the estimated growth rate in 2013 was bumped down as well to 3.1% from 3.6% predicted last June.  The World Bank penciled in 2012 growth of 2.2% for the United States, 1.9% for Japan but minus 0.3% for the euro area.  The euro debt crisis is expected to dampen growth in developing economies, which are now expected to expand by 5.4% this year compared to a prior assumption of 6.2%.

Australian consumer confidence got only a mild lift from recent central bank rate cuts in that economy.  Confidence rose 2.4% this month, printing at 97.1 after readings of 94.7 in December and 103.4 in November.  In a separate release, New Australian motor vehicle sales dropped 2.9% on month, steeper than November’s 0.7% decline, and by 3.0% on year in December. 

Revised data revealed a 2.7% plunge in Japanese industrial production during November.  Output in October-November averaged 1.2% less than in the third quarter, and November’s level was 4.2% below the year-earlier level.  The inventory-to-shipments ratio dropped 1.6% in the latest month.  Capacity usage fell by 2.9%, and capacity posted a dip of 0.1%.

A top Goldman Sachs analyst called the yen as much as 25% overvalued, observing that trade and current account surpluses in Japan will soon be history.

South Korean department store sales were 11% higher than a year earlier in December.  Also in December, Chinese foreign direct investment was 12.7% lower than a year before, but such climbed by 9.7% in 2011 as a whole.

South African consumer price inflation remained at 6.1% last month.  Malaysian CPI inflation slid to 3.0% from 3.3% in November and averaged 3.2% in full-2011.  Policymakers at the South African Reserve Bank issue a statement tomorrow.

Construction output in the euro area rose for the first time in three months in November, posting a 0.8% advance.  That still left the average output in October and November some 2.0% below the 3Q level and 1.2% weaker than a year earlier.

The Swiss ZEW expectations index, a gauge of investor sentiment, improved sharply to minus 50.1 in January from a negative 72.0 reading in December.  The current conditions component rose to minus 14.7 from minus 20.0.

The latest batch of British labor statistics showed

  • An 8.4% jobless rate in September-November on a standardized ILO basis.  That’s the most since June-August 1994.
  • A smaller-than-predicted 1.2K uptick in the December claimant count of unemployment, which also climbed 1.3K per month in 4Q compared to a 15.4K per month pace over the first nine months of 2011.
  • A 5.0% jobless rate for the fourth month in a row on a claimant basis.  Such was at 4.5% at end-2010.
  • Wage growth in September-November of only 1.9% from a year earlier for total pay and regular pay that excludes bonuses.

The heavy U.S. data release schedule today includes weekly chain store sales and mortgage applications and monthly industrial production, Treasury capital flows, producer prices and the National Association of Home Builders survey. 

The Bank of Canada releases its quarterly Monetary Policy Report

COPOM, the interest rate policy-making body of the Bank of Brazil, makes its first scheduled pronouncement of 2012. 

Tarullo of the Fed, Weidman of the ECB and Bundesbank, and Barosso of the EU speak publicly today. 

As always, Greece will remain a major market focus.  Merkel, Monti, and Sarkozy are set to meet in Rome this Friday ahead of an ECOFIN gathering next Monday and a full EU summit on January 30.  The deadline to approve a new EU treaty of strengthened fiscal rules is March 2.  A Greek default by then is a distinct possibility.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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