Ezone Service PMI Scores Revised Lower as Investors Continue to Await ECB Meeting
September 5, 2012
The Australian dollar fell another 0.4% against the U.S. currency in reaction to 2Q Aussie GDP figures and touched a 6-week low of $1.0165..
The greenback also advanced 0.3% against the loonie and 0.2% relative to the euro and Swissie. The yen and yuan are steady, while the kiwi and sterling have each edged 0.1% higher against the dollar.
Share prices fell in the Pacific Rim by 1.1% in Japan and Taiwan, 1.5% in Hong Kong, 1.7% in South Korea, 0.8% in Malaysia, 0.7% in Indonesia and India, 0.6% in Australia and 0.5% in the Philippines. The British Ftse is off 0.2% in European trading hours, but the German Dax, Spanish IBEX and Paris Cac are up by 0.7%, 0.3% and 0.2%.
Gold and oil prices slipped 0.1% each to $1694.50 per ounce and $95.20 per barrel.
A German 10-year bund auction did not go as well as hoped. The 10-year bund, British gilt, and Japanese JGB yields are each a basis point firmer.
Retail sales volume in the euro zone dipped by 0.2% on month in July and fell 1.7% on year. July sales nonetheless were 0.2% higher than the 2Q12 average level.
Euroland’s service sector purchasing managers index in August was revised to a two-month low of 47.2 from a preliminary reading of 47.5. The index has been lower than the 50 no-change level since February. The euro area’s composite PMI (both manufacturing and services) was 47.0, lowest since mid-2009.
- While several members seem to be stabilizing, conditions in Germany are worsening at an accelerating pace. Germany’s composite PMI score of 47.0 was at a 38-month low, and the services reading of 48.3 represents a 37-month trough and is 4.7 points weaker than the long-term mean score.
- Spain and Italy each posted service PMI readings of 44.0, a five-month high in both cases and up from respective 2012 lows of 41.9 and 42.3. Spain’s composite PMI was 43.4 last month a 5-month high as well. Italy’s composite PMI was 43.5, a 3-month peak.
- The French August composite PMI of 48.0 was 0.9 points lower than the preliminary estimate but 0.1 above the July score and thus at a 5-month high. The French services PMI of 49.2 compares to a flash estimate of 50.2 and a July reading of 50.0. Job cuts are a worrying feature of the report.
- Ireland scored 51.4 on the composite PMI measure last month and 51.7 on the services component. Export orders increases at a quickening pace.
Britain’s service-sector PMI, released a day earlier than anticipated, increased 2.7 points to a decent 53.7. That’s the strongest growth since March, but business confidence and employment remained weak, thus signaling continuing fragility. According to the British Retail Consortium, shop prices were 1.1% higher than a year earlier in August.
China’s service-sector purchasing managers index compiled by HSBC printed at a one-year low of 52.0. The composite PMI of 49.9 was a 5-month low. Business sentiment worsened to an 8-month low.
Hong Kong’s composite PMI reading of 50.5 was not much better than July’s score of 50.3. Jobs contracted, and orders stagnated.
India’s 55.0 service-sector PMI reading was the best since February, but the composite score of 54.3 was 0.1 lower than its July reading. The Indian economy is proving resilient, and input price inflation isn’t worsening. Still, the central bank is provocatively putting inflation-containment first.
Russia’s service-sector PMI bounced upward to 52.6 from a 22-month low in July of 52.0. The composite Russian PMI printed 0.4 higher at 53.0 in August.
Japan posted service and composite PMI readings of 49.3 and 48.6 in August. These reflected lessening rates of contraction than in July but were the third straight month to see both scores below 50.
Sweden’s services PMI fell by 4.0 points to just 50.8. Norway’s manufacturing PMI reading of 48.1 in August after 49.1 in July was lower than forecast and the third consecutive sub-50 score. Norway’s current account surplus narrowed 38.4% to NOK 90 billion last quarter.
Australia’s services PMI sank disappointingly to 42.4 in August from 46.5 in July. This was the seventh consecutive reading below 50, and it was accompanied by Australian GDP data that were a touch worse than hoped. Real GDP rose 0.6% last quarter, less than half as much as the first-quarter pace of 1.4%. On-year growth slowed to 3.7% from 4.3%.
Czech retail sales in July were 0.3% above a year earlier. Adjusted for variations in the number of working days, however, there was an on-year drop of 1.5%.
Swiss consumer prices stagnated in August and were 0.5% lower than a year earlier. Monetary officials in the country are concerned about the possibility of mild deflation becoming entrenched. Finnish GDP slumped 1.1% last quarter and was 0.1% lower than in 2Q11. Irish joblessness remained at 14.7% last month.
The Bank of Thailand left its policy interest rate at 3.0% as analysts were forecasting, but the decision unexpectedly drew two dissents from policymakers who preferred a rate reduction of 25 basis points to safeguard against global risks.
Filipino consumer prices rose 0.8% last month and accelerated to a 12-month increase of 3.8% from 3.2% in the year to July. Producer prices in July fell compared both to June and July of 2011. Taiwanese CPI inflation printed at 3.4% in August.
U.S. mortgage applications last week fell by another 2.5%. Other scheduled U.S. data releases today are quarterly productivity and unit labor costs, the monthly NAPM index, and weekly chain store sales. Central bank interest rate decisions are due today in Canada and Poland; in neither instance are analysts looking for changes.
The Democratic Party national convention kicked off in Charlotte last night. This week’s most anticipated event is Thursday’s ECB press conference.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland retail sales, PMIs
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