Quiet Start to Groundhog’s Day — Eye on Bernanke

February 2, 2012

The dollar shows minimal overnight movement.  It’s up 0.2% and 0.1% against the Swiss franc and euro but down 0.1% relative to the yen, loonie, Aussie dollar, kiwi and yuan.  Sterling is stable against the greenback.

There were some big stock market rallies in Asia, but European bourses show little change after poor Spanish labor statistics were released.  Share prices went up 2.4% in China, 2.3% in The Philippines, 2.0% in Hong Kong, 1.4% in Taiwan, 1.3% in Indonesia and South Korea, 1.0% in Australia and 0.8% in Japan and India.  The Paris Cac is unchanged.  The German Dax edged 0.1% firmer, while the British Ftse lost 0.3%.

Among 10-year sovereign debt yields, German bunds slid two basis points, British gilts rose a basis point, and the Japanese JGB is unchanged at 0.96%.

Oil prices eased 0.7% to $96.96 per barrel, while gold ticked 0.1% higher to $1750.90 per ounce.

There is still no finalized Greek rescue deal.  Chinese officials reiterated the view that they wish to see greater structural reform before committing major financial support to help solve Europe’s debt crisis.  Spain reported a 177.4K monthly leap (4.0%) in unemployment for January

The National Bank of Romania implemented a third 25-basis point rate cut since November in a mostly anticipated move.  The rate becomes 5.5%.  Romania released producer prices earlier today, showing such up 0.4% on month in December and 7.0% higher than a year earlier.

This just in… The Czech central bank left its key interest rate steady as expected at a record low of 0.75%, where such has been mired for the past 21 months.

Producer prices in the euro area slipped 0.2% in December and to a 12-month increase of 4.3% from 5.4% in November.  Energy prices were 9.5% higher than at end-2010, while all other producer prices gained 2.6% collectively on year.  December’s PPI was 0.1% below its 4Q11 average level.

The Swiss trade surplus narrowed again, printing at CHF 2.07 billion last month, down 29.7% from the November surplus.  There was a CHF 23.8 billion surplus in 2011, 22% greater than in 2010.

Britain’s construction sector purchasing managers index printed lower at 51.4, showing the slowest expansion rate in four months.

Japan’s monetary base in January was 15.0% higher than a year before.  Such had risen by a similar 15.2% in calendar year 2011.  Stock and bond transactions last week generated a JPY 1.5 trillion capital outflow, which was much greater than the JPY 354 billion outflow in the prior week of January 21.

The volume of Hong Kong retail sales in December was 17.1% higher than a year earlier.  Real sales advanced 18.4% in 2011 as a whole.  These results were a little more buoyant than anticipated.

The Australian trade surplus widened to a 3-month high in December of AUD 1.71 billion and exceeded expectations by around 10%.  Australian building permits fell by 1.0% in December and posted an on-year plunge of 24.5% after dropping 18.9% in the year to November. New Zealand commodity prices rose 1.2% last month, reaching a 9-month high.  A 13% on-year increase in New Zealand building permits still left such at an historically depressed level.

South African motor vehicle sales were 7.0% higher in January than a year before.

In later Wednesday North American developments, the United States reported an 11% increase in motor vehicle sales for January.  The Canadian manufacturing purchasing managers index dived 3.4 points to 50.6, implying a near stall in expansion there.  J.P. Morgan’s compilation of a global manufacturing PMI climbed to 0.7 points to 51.2, the strongest rate of expansion since June 2011.  Production and new business each rose.  And Facebook’s initial IPO resulted in a $100 billion valuation for the company and put co-founder Mark Zuckerberg share at $28.4 billion.

The Fed will be back in the news today.  Dallas and Chicago regional presidents Fisher and Evans are slated to speak, but the main attraction will be Chairman Bernanke’s testimony before the House Budget Committee.  Scheduled U.S. data include quarterly productivity and unit labor costs as well as weekly jobless insurance claims. 

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

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