Monthend Delivers Plenty of New Information

November 30, 2012

The yen fell to seven-month lows of 107.7 per euro and 82.76 per dollar.

The tone of fiscal cliff talks between the White House and Congressional leaders has turned more embittered and gloomy.

The German parliament approved the latest aid plan for Greece.

Japanese industrial production unexpectedly advanced 1.8% in October, but other released Japanese data pointed to continuing softness. 

Euro area CPI inflation sank 0.3 percentage points to 2.2% in November, while unemployment rose to a new record high of 11.7%.

Speculation has mounted that Australia’s Official Cash Rate may be cut next week.

The dollar advanced 0.7% against the yen but lost 0.2% relative to the euro and Swiss franc and 0.1% versus the yuan and dollar.  Commodity-sensitive currencies softened marginally against the greenback.  Canadian GDP gets reported at 13:30 GMT.

Share prices recovered 1.1% in China.  Analysts anticipated an encouraging Chinese manufacturing PMI report.  Equities also rose 0.9% in India, 0.8% in New Zealand and Singapore, 0.6% in Australia, and 0.5% in Hong Kong and Japan, but the Indonesian market lost 1.0%.  In European markets, the Dax is up 0.4%, and the Paris Cac and British Ftse have risen 0.3%.  However, the Spanish IBEX is off 0.3%.

Gold and oil prices rose 0.2% to $1732.50 per ounce and $88.24 per barrel.

The 10-year German bund yield firmed a basis point, while JGBs and British gilts are steady.

The climb in Japanese industrial output last month was the most since December 2011.  Output was still 4.3% lower than a year earlier, and the inventory-to-shipments ratio fell 1.8%.  In other Japanese data reported today,

  • Consumer prices fell 0.2% on a seasonally adjusted basis in October.  The core core CPI index that excludes both energy and fresh food was 0.5% below its year-earlier level.
  • Tokyo’s on-year headline and core-core inflation rates in November were minus 0.5% and minus 0.9%.
  • The manufacturing purchasing managers index dropped 0.4 points to 46.5, lowest since 45.7 in April 2011.
  • Real household spending reversed just a quarter of September’s 2.0% drop.  In on-year terms, such dipped 0.1%, while real income increased 0.9%.
  • Motor vehicle production recorded the same on-year 12.4% decline in October as posted in September.
  • Housing starts, up 25.2% in the year to October, recorded the largest 12-month increase in four years.
  • Construction orders fell 13.8% in the year to October.
  • The jobless rate stayed at 4.2% last month, and employment was 0.2% greater than a year before.

In a debate between Japanese Prime Minister Noda and the LDP leader, Abe, Mr. Abe backpedaled somewhat on how much he plans to interfere with the Bank of Japan, but the view is gain in the market that a central bank outsider will be appointed governor of the central bank regardless of the December 16 election’s result.  The Noda government unveiled a JPY 880 billion supplementary fiscal stimulus today.

According to the preliminary estimate, Euroland CPI inflation fell to 2.2% in November, lowest since the end of 2010, from 2.5% in October and 3.0% in November 2011.  The ECB’s inflation target is “below but close to 2.0%.”

Ezone unemployment climbed to a record high of 11.7% last month from 11.6% in September, 11.5% in July and August, and 10.4% in October 2011.

German retail sales volume collapsed 2.8% on month in October, raising new concerns about the largest and presumably healthiest economy in the Ezone.  This was the third monthly decline in four months and puts the October level 2.6% below the third-quarter average as well as down 0.8% from October 2011.

Greek retail sales in September posted on-year declines of 10.7% in nominal terms and 12.1% on a volume basis.

French consumer spending fell 0.2% on month and 0.5% on year last month.  French producer prices rose 0.5% on month and 2.9% on year in October.  Austrian producer price inflation held steady at 0.7% in October. 

Italian consumer prices dipped 0.2% in November and retained a 12-month 2.6% rate of increase.  Italy’s PPI slipped 0.3% in October, trimming the on-year pace to 2.3% from 2.6% in September.  The 11.1% Italian jobless rate in October was the highest since 2004.

Spain’s CPI inflation slowed to 3.0% in November from 3.5% in October according to the flash estimate.

British consumer confidence in November rose to an 18-month high of minus 22 on the GFK measure versus a negative 30 reading in October.

The Swiss index of leading economic indicators weakened more than anticipated in November to a reading of 1.50 from 1.64 in October.

Norwegian retail sales volume sank 1.4% last month but remained 3.8% higher than a year before.  Danish GDP edged 0.1% higher in the third quarter following a 0.7% contraction in 2Q.  On-year Danish growth remained in the red at minus 0.5% versus -0.6% in the year to 2Q.  Polish on-year GDP growth slowed to 1.4% from 2.3% in the second quarter. 

Portuguese industrial production and retail sales were 4.3% and 6.9% lower in October than a year before; both drops were greater than those in September.  Dutch PPI inflation ticked up to 4.3% in October from 4.2% in September.  Spain’s current account swung to a deficit of EUR 0.37 billion in September after a EUR 1.2 billion surplus in August.  Iceland’s trade surplus widened nearly threefold in September to ISK 15.2 billion.  Hungary’s trade surplus widened 33% to EUR 973 million in September. 

Australian private-sector credit only ticked 0.1% higher in October, the smallest monthly gain in 16 months. Australian M3 money growth slowed slightly to a 12-month increase of 7.5% in October.  New Zealand M3 also slowed from 6.4% in September to 5.8% in October.  New Zealand building permits fell 1.5% in October, the first decline since May, following a 7.8% increase in September.

Industrial production in South Korea rose 0.6% in October, about half as much as forecast. Malaysian producer prices dropped 1.5% on month and 2.7% on year in October.  Hong Kong M3 money expanded 10% between October 2011 and October 2012.

GDP in India was 5.3% greater than a year earlier in the third quarter.

Canada will be reporting September and 3Q GDP data today.  In the United States, personal income and spending and the Chicago and Milwaukee purchasing manager indices arrive.  The Bank of Mexico has a monetary policy meeting and is not expected to announce a change in Mexico’s key interest rate.

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

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