Some Tellingly Soggy Data Results

November 14, 2012

Industrial production in the euro area slumped 2.5% on month in September.  Output was 1.3% than the average 3Q12 level and 2.3% weaker than a year earlier.

British labor statistics suggest more softness.  The claimant unemployment count jumped 10.1K in October, its biggest monthly rise in 13 months.  Average weekly earnings growth in 3Q of 1.8% with bonus pay and 1.9% without such stayed below 2.0%.  In the quarterly Bank of England Inflation Report released today, projected 2012 growth was revised a half percentage point lower.  The near-term inflation path was bumped up, and analysts are inferring that fresh quantitative easing is not an imminent prospect.

The Greek and Portuguese economic downturns have deepened.

  • Greek real GDP tumbled 7.2% between 3Q11 and 3Q12 following a 6.3% on-year decline in the second quarter.
  • Portugal’s GDP fell by 0.8% on quarter and by 3.4% in the year to 3Q after a 3.2% 2Q-over-2Q drop.  Portuguese unemployment went up 0.8 percentage points in 3Q to 15.8% from 15.0% in 2Q.

Dutch retail sales volume posted a monthly drop of 0.9% in September and was 0.1% lower than a year earlier.

On political fronts,

  • China’s 18th Communist Party Congress concluded.  Xi Jinping is favored to be named China’s president tomorrow.  The central bank is likely to get a new governor.
  • Japan appears likely to hold early lower house parliamentary elections in the middle of next month that could return the LDP to power with Shinzo Abe as prime minister.  He’s a foreign policy hawk.
  • Market attention in Europe remains focused on Greece and Spain.  Recent suicides by Spaniards evicted from their homes has become a flashpoint of tension.
  • Less than seven weeks remain in 2012 for U.S. politicians to figure out a way to blunt the impact of the fiscal cliff.

The dollar is 0.9% stronger against the yen and marginally above the 80.0 level.  The U.S. currency has slid 0.3% against the euro and Swiss franc and 0.1% versus the loonie and yuan.  The greenback shows gains of 0.2% relative to the kiwi and 0.1% versus the Australian dollar.

Stocks are again falling in Europe, with losses so far of 0.6% in London, 0.5% in Milan, and 0.4% in Frankfurt and Paris.  Spain’s IBEX is 0.1% softer.  In the Pacific Rim, Japan’s Nikkei closed unchanged.  Equities rose 1.2% in Hong Kong but fell 1.0% in Singapore.  They rose 0.5% in China, 0.4% in Indonesia, 0.3% in Taiwan and 0.2% in South Korea but dropped by 0.4% in New Zealand where disappointing retail sales were reported.

The 10-year sovereign debt yields are up by four basis points in Britain and a single basis point in Japan and Germany.

Oil prices have climbed 0.2% to $85.52 per barrel.   Gold is 0.1% lower at $1723.40 per ounce.

New Zealand nominal retail sales fell 0.8% last quarter, trimming their four-quarter increase to 2.1% from 4.8% in the second quarter and 7.9% in 4Q11.  Retail sales volume dropped 0.4% between 2Q12 and 3Q12.

Australian wage inflation slowed but not enough to inspire speculation that the Reserve Bank of Australia might enact another interest rate cut very soon.  Wages rose 0.7% on quarter but showed an unchanged on-year increase of 3.7%.

There’s been an unexpected tightening of Icelandic monetary policy, a normalizing move that bumped the seven-day collateralized lending rate to 6.0% from 5.75% and also saw other central bank rates rise by 25 basis points.  Expected inflation remains higher than the central bank target, and economic slack is being reabsorbed.

The Central Bank of Chile, on the other hand, left its policy rate unchanged at 5.0%, where such has been since a 25-bp cut in December 2011.

The Conference Board index of Japanese leading economic indicators fell 0.4% in September after a 0.5% drop in August.

Australia’s Westpac index of consumer confidence leaped 5.2% in November, the biggest monthly advance in a year.

Indian WPI inflation slowed more than forecast to an on-year 7.45% in October.

South African retail sales growth from a year earlier slowed to 4.5% in September from 6.7% in August.  This greater-than-forecast deceleration resulted from a monthly decline of 0.5%.

Finnish CPI inflation edged down to 2.6% in October from 2.7% in September.  French CPI inflation ticked down 0.1 percentage points to 2.1% last month.

Ireland’s trade surplus decreased by marginally more than 40% in September to EUR 2.90 billion.

U.S. retail sales, business inventories, and producer prices will be reported today.  FOMC minutes also get released.

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

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