Busy Data Day

December 5, 2012

The dollar is narrowly mixed, with gains of 0.3% against the Swiss franc and yen and 0.2% versus the euro, no change relative to the Australian dollar, and slight losses of 0.2% against the kiwi and 0.1% versus the loonie, yuan and sterling.

Hopes that the new Chinese government plans an urban infrastructure stimulus goosed Chinese and neighboring Asian share prices.  Such advanced by 3.6% in China, 2.2% in Hong Kong, 0.6% in Taiwan and South Korea, 0.5% in Singapore and 0.4% in Japan, Australia, Indonesia, and Malaysia.  In Europe, the German Dax, Paris Cac and British Ftse have firmed 0.2%.  Stocks are up 0.1% in Italy, and down 0.1% in Spain after so-so Spanish bond auctions.

The 10-year German bund yield fell 3 basis points.  It’s British counterpart is up a basis point just ahead of Chancellor of the Exchequer Osborne’s delivery of the British Autumn Budget Statement.  The 10-year JGB hit a new low for the move of 0.70%.

Gold has climbed 0.5% to $1703.70 per ounce.  Oil edged 0.1% firmer to $88.57 per barrel.

The most eye-catching European data releases in a crowded field of numbers are Euroland retail sales and the  British service-sector purchasing managers survey.

  • Ezone retail sales volume plunged 1.2% in October.  Analysts had predicted only a marginal dip.  Food sales fell 0.8%, while all other retail sales dropped 1.4%.  Further depressed by downward revisions to historic data, retail sales were 3.6% lower than a year earlier.  Between September and October, sales fell by 2.8% in Germany, 4.5% in Portugal and 1.2% in Spain.  October’s sales level was already 1.6% lower than the 3Q mean.
  • Britain’s 50.2 reading on the service-sector PMI was 0.4 points lower in November than October and constitutes the weakest score since December 2010.  Business expectations were at an 11-month low, and new orders contracted for the first time since late 2010.  Britain also had disappointing manufacturing and construction PMI scores of 49.1 and 49.3, suggesting that improved GDP growth in 3Q12 lacked sustainability.

Euroland’s service sector PMI was revised up a full point to 46.7 from a preliminary estimate of 45.7.  46.7 was the best reading since August but still clearly below the 50 level that separates contracting activity from expansion.  Only Ireland’s 56.1, which matched the October 5-year peak, surpassed 50.  Italy’s 44.6 was at a two month low.  The service sectors readings of Germany (49.7), France (45.8) and Spain (42.4) were each the highest since August. 

Euroland’s composite (services and manufacturing) purchasing managers index of 46.5 after 45.7 in October suggests GDP this quarter may drop 4-5 times faster than in 3Q in spite of the fact that 46.5 is the highest reading since July.  The readings in France (44.3) and Spain (43.4) were depressed by at 3-month highs.  Italy’s 44.4 was also quite depressed and at a 3-month low.  Germany’s index firmed to a 2-month high of 49.2, while Ireland’s 55.3 showed buoyant growth even though it was less than a 55.5 reading in October.

Russia’s service-sector PMI of 57.1 was the second best reading for that economy since May 2011.  It’s composite PMI score of 56.2 was at a 29-month high.

Japan posted a 51.4 service-sector PMI, best since April and 1.4 points better than in October.  However, the orders component of this report was weak.  Japan’s composite PMI score of 49.9 was the best reading since 50.1 last May.

China’s HSBC service-sector PMI slid 1.4 points to a three-month low of 52.1 in November, but the composite reading of 51.6 was the third straight score above 50.0 and the highest reading since May.

The Hong Kong purchasing managers index improved to 52.2 in November from 50.5 in October and 49.6 in September.

The Australian PMI-services index rebounded to a 5-month high of 47.1 from readings of 42.8 in October and 41.9 in September.  Such was the 10th straight sub-50 score.  The Reserve Bank of Australia cut its Official Cash Rate by 25 basis points earlier this week.

India posted service-sector and composite PMI readings in November of 52.1 and 53.2.  In the services index, business expectations reached a 3-month high despite orders being at a 1-year low.  The composite reading was a 13-month low.

The 53.7 non-oil PMI reading in the United Arab Emirates reflects solid production with strong orders.  The long-term average reading of this data series is 52.7.

Real GDP in Australia last quarter rose 0.5% from 2Q and 3.1% from a year before.  Both changes were the smallest since the final quarter of 2011.  Consumption ticked only 0.1% higher, and Australia’s terms of trade sank 4.0% on quarter and 13.7% on year.

Taiwanese CPI inflation slowed to 1.6% last month from 2.3% in October.  Filipino CPI inflation slowed to 2.8% from 3.1%, while producer prices dropped 2.7% in the year to November.

British shop price inflation remained contained at 1.5% in November.

Spanish industrial output fell 3.3% on year in October, adjusted for variations in the number of working days.  Czech retail sales dropped 1.5% on month but rose 2.2% on year in October.  Finnish GDP dipped 0.1% last quarter and was 1.2% less than in 3Q11.  Norway’s current account surplus widened 11.6% to NOK 96 billion last quarter. 

Sweden’s service-sector PMI, a very volatile data series, fell to 46.4 in November after readings of 50.2 in October, 47.2 in September, and 50.7 in July.

The Polish Central Bank 7-day benchmark interest rate has been reduced by 25 basis points as expected to 4.25%.

The U.S. is scheduled to report factory orders, labor productivity, unit labor costs, the service-sector PMI index and the ADP estimate of private sector jobs growth.   Mortgage applications recovered 4.5% last week.

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

Tags: , ,


Comments are closed.