Lots of Released Data on Final Business Day of the Quarter

September 28, 2012

Share prices rose in the Pacific Rim but are mostly lower in Europe.  Investors are again focused on Spain, where the 2013 budget was unveiled yesterday and bank stress test results are due today.  The fiscal deficit is projected at 4.5% of GDP, down from 6.3% in 2012.  Italian Prime Minister Monti opposes new conditions on the ECB bond buying plan.  While ECB Pdt Draghi would like to involve the IMF, Monti believes that is unnecessary.

Equities have dropped so far by 1.0% in Spain, 0.7% in Italy, 0.5% in France and 0.2% in Germany.  The Japanese Nikkei lost 0.9% as the fiscal half drew to a close, but stocks elsewhere in the Pacific Rim advanced 1.8% in China, 1.0% in Thailand and India, 0.7% in New Zealand, and 0.4% in Australia, Hong Kong, South Korea and Taiwan.

The dollar is unchanged against the yen, loonie and kiwi, up 0.3% versus sterling and 0.2% relative to the Australian dollar, and down 0.3% against the yuan, 0.2% versus the Swissie, and 0.1% against the euro.

Ten-year British gilt yields are off 0.4%.  The 10-year German bund is down 3 bps, while Spanish 10-year sovereign yields firmed 2 bps.

Oil and gold prices have edged 0.2% and 0.1% firmer to $92.07 per barrel and $1782.50 per ounce.

Japan released the usual wide assortment of indicators on the final day of the month.  Industrial production stood out the most, falling more than twice as much as projected in August — 1.3% from July and 4.3% on year.  Such followed a 1.0% monthly decline in July and was accompanied by a revised official forecast that output is likely to drop another 2.9% in September.  The Ministry of Trade and Industry downgraded its assessment from a flat trend to one that is weakening.

  • Japanese labor statistics showed a 0.1 percentage point dip of the unemployment rate to an 11-month low of 4.2% and unchanged employment from a year ago.  The 0.83 job offers to seekers ratio was unchanged from July.
  • Retail sales rose 1.5% on month in August and were 1.8% higher than a year earlier.
  • Large-store sales fell 0.9% on year, only half as much as anticipated in August.
  • Real household spending increased 2.2% on month in August following drops of 1.6% in June and 1.4% in July.  The on-year advance of 1.8% was the most since May.
  • The manufacturing purchasing managers index ticked upward but remained under the 50 no-change level.  The September reading was 48.0 after 47.7 in August, 47.9 in July, 49.9 in June and 50.7 in May.
  • Housing starts posted a 12-month decrease in August of 5.5% following drops of 9.6% in July and 0.2% in June.
  • Construction orders were 8.7% higher than in August 2011 after 12-month increases of 8.0% in July and 4.6% in June.

Australian industrial output fell 1.1% in the second quarter, cutting its on-year increase to 0.5% from 3.9% in the first quarter.  Private credit expanded 0.2% in August, same as in July.  New Zealand building permits went up 1.9% last month, less than expected.  New Zealand M3 money posted a 7.2% 12-month increase in August.

South Korean industrial production fell 0.7% on month but rose 0.3% on year in August, and that economies index of leading economic indicators reversed a 0.2% July uptick in August.  The Thai trade surplus tripled to $1.54 billion in August.  Malaysian producer prices were 0.5% lower in August than a year before.

Euroland’s flash on-year CPI inflation estimate produced a big surprise.  Instead of subsiding slightly to lower ground, such accelerated from 2.4% in June and 2.6% in July to six-month high of 2.7% in September.

French real GDP stagnated in 2Q12 as such had done in the first quarter of this year.  Investment rebounded 0.5% from a 0.8% drop in 1Q, but consumption slid 0.1%.  Also, net exports exerted a drag on overall growth as imports (+1.7%) climbed much faster than the 0.2% increase of exports.

German retail sales volume rose by 0.3% in August but their level in July-August was 0.7% lower than the 2Q average.  August sales were moreover 0.8% below their year-earlier level.

French household spending in August sank 0.8% on month and by 0.5% on year.  French producer prices climbed 1.2% in August and posted a 2.6% 12-month rate of increase.  Italy’s PPI advanced 0.7% last month and was 2.7% higher than in August 2011.  Italian CPI inflation stayed at 3.2% in September instead of easing marginally as projected.  Dutch producer prices jumped 1.9% in August, accelerating to a 12-month pace of 4.2% from 1.7% in the year to July.  Portuguese industrial production and retail sales recorded on-year declines in August of 2.2% and 6.1%.  Irish Retail sales in August were 0.6% lower than a year earlier.

Greek PPI inflation accelerated sharply to a 12-month increase of 6.5% in August from 3.8% in July.  The PPI rose 1.7% on month.  Greek retail sales fell 9.1% in the year to July after a 10.6% on-year drop in June.

Swedish retail sales fell 0.4% in August, slicing the 12-month increase to 1.8% from 2.3% in the year to July.  Norwegian non-auto retail sales slid 0.2% in August but were 2.3% greater than a year before.  Icelandic producer prices dived 2.7% in August and were 6.1% lower than in August 2011.  Danish GDP fell 0.4% in the second quarter and by 0.6% in on-year terms. 

British consumer confidence improved a point with a negative 28 reading in September following minus 29 in August, minus 27 in July and minus 29 in June.  The U.K. services index edged up 0.1% in May-July versus the previous 3-month period.

Switzerland’s index of leading economic indicators improved to 1.67 in September from 1.59 in August.  The Swiss current account posted a CHF 21.42 billion surplus in 2Q12, 27.6% wider than in 1Q.

Scheduled U.S. data arriving today include the Chicago PMI data, personal income and spending, and the U. Michigan consumer sentiment index.  Monthly Canadian GDP is also on today’s data calendar.

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

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