More PMI Reports and a Monster Australian Trade Deficit

October 3, 2012

The dollar has gained 0.5% against the kiwi and 0.3% versus the Australian dollar.  Other dollar pairs are pretty stable.  The greenback is unchanged against the euro and yuan, up 0.2% relative to the loonie, and 0.1% firmer against the yen, Swissie and sterling.

Japan’s Nikkei fell 0.5%, and Chinese markets remained closed in continuing observance of the communist revolution anniversary.  Share prices rose 0.5% in New Zealand, 0.3% in Vietnam and 0.2% in India and Hong Kong.  In European markets, share prices are down 0.4% in Spain but up 0.4% in Italy.  The British Ftse is 0.1% firmer, while the Paris Cac is off 0.2%.

Oil prices declined 0.7% to $91.27 per barrel, whereas gold prices have risen 0.3% to $1780.10 per ounce.

Ten-year British gilt and German bund yields slid two basis points, and the 10-year Japanese JGB recovered a basis point.

Australia’s A$ 2.03 billion trade deficit in August was more than 3-1/2 times greater than the shortfall in July and the largest deficit since March 2010.  There was a contraction in two-way commercial trade flows.  Australian home prices increased 1.4% in September, their best gain in 30 months.

The volume of retail sales in the euro area recorded a third consecutive 0.1% increase in August but was 1.3% lower than a year earlier. 

Germany was closed for Unity Day, celebrating the 1990 unification of its eastern and western halves.

British shop prices posted a 1.0% on-year advance in September, down from 1.1% in August.

Euroland’s service-sector purchasing managers index for September printed at 46.1, similar to the preliminary 46.0 estimate.  This was the lowest score since July 2009.  Business expectations were their most depressed since March 2009.  The composite PMI was also 46.1 and suggests a recession in the region.

  • France recorded an 11-month low of 45.0 on its services PMI and a 42-month low on its composite PMI of 43.2.  The composite French PMI was down from 48.0 in August and 50.2 last February.
  • Germany’s services PMI of 49.7 was revised from an above-50 preliminary reading of 50.6 and connotes stagnation.  Jobs were cut at their fastest pace since May 2009.  The composite German PMI of 49.2 was a 4-month high.
  • Italy’s service sector PMI of 44.5 was at an 8-month high and up from 44.0 in August.  The composite Italian PMI score of 44.8 was at a 6-month high.
  • Spain’s service-sector PMI had an extremely depressed reading of 40.2, lowest since November 2011.  The composite PMI of 41.2 was at a 4-month low and suggests that GDP in Spain fell just as much in 3Q as in 2Q.
  • Ireland was the only Euroland member where services and composite activity increased.  The services PMI in September climbed to a 19-month high of 53.9 from 51.7 in August.  The Irish composite PMI was at 53.0, a 17-month high.

Britain’s service-sector purchasing managers index slipped to a two-month low of 52.2 in September from 53.7.  The index has stayed above 50 all year, but weak manufacturing points to very scant, if any, GDP growth last quarter.

Sweden’s service sector purchasing managers index fell by 3.4 points and went below the 50 no change level to a reading of 47.3 in September.

Japan’s services PMI of 48.9 was lower than the August score of 49.3 but above July’s 47.5.  A composite Japanese PMI reading of 48.4 also constitutes a two-month low and suggests pretty flat GDP growth in 3Q.

Australia’s services PSI index sank further below 50, printing in September at 41.9 after scores of 42.4 in August and 46.5 in July.  The sales and orders components printed below 40.

China’s government-authorized CFLP service-sector PMI fell to a 7-month low in September of 53.7 from a reading of 56.3 in August and 55.6 in July.

The Saudi non-oil PMI improved to 60.3 from 58.3 in August and 58.1 in July.  The United Arab Emirates non-oil PMI was 53.8, up from 53.3 in August and 53.4 in July.

Russia’s services PMI printed at a four-month high of 54.5 in September after scores of 52.6 in August and 52.0 in July.  The composite Russian reading was 54.3, a five-month peak.

Iceland’s central bank left its key 5.75% lending rate unchanged as analysts were expecting.

Poland’s central bank also kept its 4.5% main interest rate unchanged, but analysts in that case had been projecting a rate cut of 25 basis points.

Turkish consumer price inflation accelerated to 9.2% last month from 8.9% in the year to August.  Core inflation eased a bit, however, to 6.7%.  Producer price inflation also slowed, dropping to 4.0% from 4.6% in August.

Private-sector U.S. jobs increased 162K according to the ADP estimate.  This gain was stronger than analysts were forecasting.  Refinancings lifted overall U.S. mortgage applications by 16.6% last week, and the fixed 30-year mortgage rate dropped ten basis points to 3.53%.

U.S. presidential candidates Obama and Romney face off at 21:00 EDT tonight in their first broadcast debate from Denver.  Data-wise, analysts await the non-manufacturing PMI report at 14:00 GMT from the Institute of Supply Management.

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

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