Renewed Downdrift in Yen
January 8, 2013
The yen is 0.3% firmer against the dollar, which otherwise shows no change against the Swiss and Australian currencies, a rise of 0.1% against the kiwi and sterling and 0.1% dips versus the yuan, loonie and euro.
Share prices slipped in the Pacific Rim but are firmer in Europe.
- Equities fell 0.9% in Japan and Hong Kong, 0.7% in South Korea, 0.6% in Australia, and 0.4% in Singapore, China and Taiwan.
- Stocks have risen by 0.8% in Italy, 0.6% in France and Spain, and 0.2% in Germany and Britain.
Oil and gold prices strengthened 0.6% to $93.72 per barrel and $1653.50 per ounce.
The ten-year British gilt yield dropped two basis points, while the 10-year Japanese JGB yield is a basis point firmer. The German bund is steady.
Mainichi news claims the Bank of Japan and government officials are discussing a dual mandate that, like the Fed’s, would include a labor market goal as well as price stability. The government is said also to be preparing a JPY 12 trillion fiscal stimulus package. Finance Minister Taro Aso said European Stability Mechanism bonds would be purchased to counter yen strength against the euro.
Bundesbank President Weidman again protested the extent of ECB unconventional policy measures.
The Greek government successfully sold 4-week and 6-month bills at slightly lower yields and greater bid-offer ratios than the prior auctions netted.
German industrial orders dropped 1.8% in November, slightly more than forecast, and were 1.0% lower than a year earlier. Such followed a surprise 3.8% monthly increase in October and left the October-November level of orders some 0.9% above the 3Q12 level. Foreign orders sank 4.1% in the latest month, outweighing a 1.3% increase in domestic demand.
The German November current account of EUR 15.3 billion was 2.1 billion euros wider than in October but smaller than a surplus of EUR 16.1 billion in November 2011. The year-to-date surplus of EUR 148.7 billion was 17.7% wider than the accrued surplus over the first eleven months of 2011. Merchandise exports and imports fell on month by a disturbing 3.4% and 3.1% respectively in a sign of a drag from the external sector. The seasonally adjusted trade surplus of EUR 14.6 billion was marginally smaller than October’s EUR 14.9 billion surplus and less than the monthly average in the second and third quarters of 2012.
Ezone unemployment rose to 11.8% in November from 11.7% in October, 11.6% in September and 11.3% in November 2011. The Spanish jobless rate is over 20 percentage points higher than the German jobless rate.
Retail sales volume in Euroland edged up 0.1% in November but was 2.6% lower than a year earlier. Sales in October-November were 1.3% below their 3Q level.
Euroland’s economic sentiment index printed 1.3 points higher at 87.0 in December. Industrial confidence improved 0.6 points. Service-sector confidence rose 2.1 points. Consumer confidence was revised up 0.1 points to a reading of negative 26.5. Construction confidence rose 0.9 points, but retail sector confidence declined by 0.9 points. The business climate index printed at minus 1.12, 0.05 points better than in November but 2.54 points below the February 2011 post-crisis high.
Seasonally adjusted unemployment in Switzerland remained at 3.0% last month. The unadjusted rate rose 0.2 percentage points to 3.3%.
In November, Italy matched October’s 9-year peak of 11.1% unemployment.
The French trade deficit narrowed 8.1% to EUR 4.33 billion in November, but as in Germany, both exports and imports recorded outsized on-month declines.
British same-store retail sales posted a paltry 0.3% on-year increase in the critical holiday shopping month of December. Total sales were up 1.5% according to the British Retail Consortium.
Norwegian industrial production was 3.5% lower in November than a year earlier but recorded a 3.1% advance on a working day-adjusted basis. Factory output went up 2.4% on year. Irish industrial production, in contrast, was 6.8% lower than in November 2011, and Hungarian output posted a 6.9% on-year decrease.
Australia’s construction purchasing managers index recovered 1.8 points to a still-depressed sub-50 reading of 38.8 in December.
The Australian trade deficit widened unexpectedly and by 7.9% to A$ 2.637 billion in November. Imports grew twice as fast as exports. The October deficit was revised upward by 17%.
Indonesia’s current account deficit in the last quarter of 2012 equaled 2.3% of GDP. Taiwanese export growth of 9% between December 2011 and December 2012 was twice as much as analysts anticipated. Turkish industrial output growth in November, up 1.5% on month and 11.3% on year, also surpassed expectations.
U.S. small business sentiment according to the NIFB measure improved to 88.0 last month from 87.5 in November. Other scheduled U.S. data releases today are the IBD/TIPP optimism index, consumer credit, and weekly chain store sales. Mexico releases consumer prices, the PPI, and consumer confidence. Lacker of the Fed speaks publicly.
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: European sentiment, German orders and current account, Taro Aso