Thanksgiving Week Starts on Optimistic Note

November 19, 2012

This will be a holiday-shortened week in the United States.  Japanese markets will be closed Friday for Labor Thanksgiving.

In today’s session so far, European share prices have rallied 1.4% in France, 1.3% in Germany, 1.2% in Italy, 1.0% in Britain, and 0.7% in Spain.  The Japanese Nikkei climbed 1.4% and closed above 9100.  Stocks also rose in South Korea (0.9%), Austraia (0.6%) and Honk Kong (0.5%) but fell 0.9% in Indonesia, 0.4% in Malaysia, and 0.1% in China.

The dollar has weakened 0.6% against the kiwi, 0.5% versus the Australian dollar, 0.3% relative to the euro and Swiss franc, 0.2% against the loonie and sterling, and 0.1% versus the yen.  The yuan is unchanged.

Ten-year British gilts and German bunds are four and two basis points higher.  The 10-year Japanese JGB yield recovered a basis point to 0.74%.

Oil prices increased 1.1% to $87.89 per barrel.  Gold climbed 0.5% to $1723.90 per troy ounce.

Chinese property values fell in fewer cities last month than in September.  Such were 1.1% lower than in October 2011.  There was a report that two-way Chinese trade flows appear to be suffering a relapse in November.

The Bank of Japan Board began a two-day policy meeting.  See my preview.  LDP leader Shinzo Abe, who is favored to unseat Prime Minister Noda after next month’s parliamentary election, said he hopes to appoint a BOJ governor who favors raising the target inflation rate to at least 2%.  The central bank has a goal now of 1%.

Japan released revised data for the index of leading economic indicators and machine tool orders.

  • The September LEI was revised to 91.6 from an initial estimate of 91.7 and an August reading of 93.2.  This was the weakest score since April 2011.
  • The September coincident index was revised upward to 91.5 from 91.2.  It was still the weakest reading since May 2011 and compelled officials to say the data signal a possible turning point.  Their assessment had been “improving” from February to May and “weakening” from June to August.
  • The September index of lagging indicators had a value of 86.7, same as the preliminary number and up from a reading in August of 87.3.
  • Machine tool orders were 6.7% lower than a year earlier in October.  That estimate was unchanged from the preliminary indication.

Hong Kong’s jobless rate edged up to 3.4% in October from 3.3% in September.  Thai GDP expanded 1.2% in the third quarter but posted a slower 12-month increase of 3.0% versus 4.4% in the year to 2Q12.  The deceleration reflected weaker export demand.  Thai officials revised down projected 2012 GDP growth to 5.5% and are looking for growth next year between 4.5% and 5.5%. 

Producer output prices in New Zealand fell 0.9% on quarter in 3Q12 and were 1.0% lower than a year earlier.  Producer input prices dropped 1.0% from 2Q, trimming the on-year increase to 0.3% from 1.9% in the year to 2Q.

Construction output in the euro area sank 1.4% in September and recorded a 2.6% 12-month rate of decline.  Output showed no change between 2Q and 3Q but was 4.8% lower than in the third quarter of 2011.

The British Rightmove house price index fell by 2.6% in November, the largest drop in 11 months, but recorded a larger on-year increase of 2.0%.

The Bank of France’s index of French leading economic indicators increased 0.6% in September, whereas the index of coincident indicators edged 0.1% lower.

Spain’s bad bank loan ratio advanced to a record high 10.7% in September from 10.5% in August.

Italian industrial orders slumped by a greater-than-forecast 4.0% in September and by 12.8% from a year earlier.  Industrial sales dropped 4.2% on month and 5.4% on year.

The Greek current account swung from a EUR 1.6 billion deficit in August to a EUR 775 million surplus in September.

Portuguese producer prices dipped 0.2% last month and recorded an increase of 4.6% from a year before.

Chilean GDP grew by an as-expected 5.4% in the year from 3Q11 to 3Q12.

Scheduled U.S. data reports today are the National Association of Home Builders housing index and existing home sales.  U.S. politicians have signaled that progress was made last Friday in talks to modify the fiscal cliff’s severity.

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

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