Another Hot and Lazy August Night

August 16, 2012

British retail sales were better-than-expected last month, lifting sterling by 0.1% against the dollar.  The greenback also dipped 0.1% versus the loonie but otherwise shows gains of 0.4% against the yen, 0.2% relative to the Australian dollar, and 0.1% against the euro, Swiss franc and yuan.

Chinese Premier Wen seemed to suggest further monetary easing soon, citing the decline of inflation.  Chinese foreign direct investment posted a sharp 8.7% on-year drop in July, more than three times largesr than expected and the greatest 12-month decrease since late 2009.  Chinese share prices fell overnight by another 0.5%, but equities in Asia and Europe were mixed on the whole.

Share prices increased 1.9% in Japan, and the Nikkei-225 closed above 9,000 for the first time since May 10.  Stocks rose 0.5% in Indonesia and 0.1% in South Korea but fell by 0.5% in Hong Kong, 0.4% in India and New Zealand, and 0.2% in Malaysia and Thailand.  In Europe, the Paris Cac and British Ftse edged 0.1% and 0.2% lower, but the Spanish IBEX and German Dax are higher by 0.8% and 0.1%.

The 10-year JGB yield climbed to a 2-month high of 0.86%.  The 10-year German bund is two basis points lower, and the British gilt is steady.

Oil and gold prices slid 0.2% to $94.18 per barrel and $1605.50 per ounce.

British retail sales volume rose another 0.3% in July on top of gains of 1.5% in May and 0.8% in June.  Sales over those three months were 0.9% stronger than in February-April after edging up just 0.2% in the prior three months.  In on-year terms, sales were up 2.8% in July and by 2.5% in May-July.

Consumer prices in the euro area fell 0.5% on month in July and posted a 2.4% 12-month rate of increase for the third month in a row.  Core inflation fell by 0.8% on month but ticked upward to an on-year increase of 1.7% after three 1.6% readings in a row.  German consumer prices went up 0.4% on month, preventing a lower reading for the euro area as a whole.

Dutch unemployment edged up 0.2 percentage points to 6.5% in July.  This rise was unexpected.  Hong Kong’s jobless rate, in contrast, remained at 3.2%.

Spain’s trade deficit widened 43% on month to EUR 2.73 billion in June.  Ireland’s trade surplus of EUR 4.32 billion was little changed from the May surplus of EUR 3.46 billion.

The Swiss ZEW expectations index improved 9.2 points in August but remained in the red with a reading of minus 33.3.

Turkish consumer confidence improved a point to a score of 92.8 in July.  South African wholesale turnover sank 2.7% in June, slashing its on-year increase to 3.9% from 8.75.  Israeli GDP expanded 3.2% at a seasonally adjusted annualized rate last quarter, thanks to a 10.3% leap in exports.

Expected future CPI inflation in Australia ebbed to 2.4% this month from 3.3% in the July survey.  New Zealand’s business purchasing managers index moved under the 50 no-change threshold for the first time since April, printing in July at 49.4.

Japanese stock and bond transactions last week generated a tiny JPY 16 billion net capital outflow versus a JPY 251 billion net inflow in the prior week of August 4.

Scheduled U.S. data arriving today include the Philly Fed manufacturing index, housing starts, and building permits.  Canada reports the monthly manufacturing survey and securities transactions. Chile’s central bank has scheduled an interest rate decision, which is expected to keep the status quo, and Mexican GDP figures are due. Likewise, Turkey’s central bank is also assumed likely to not change policy after today’s interest rate meeting.

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

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