Attention Turns to Central Banks

January 9, 2013

Japanese government officials — Prime Minister Abe, Finance Minister Aso, and Chief Cabinet Secretary Suga — sustained rhetorical pressure on the Bank of Japan overnight to intensify monetary policy easing.

ECB and Bank of England monthly monetary policy decisions are due tomorrow. 

A Polish central bank rate cut is considered likely later today.  The current rate level is 4.25%.

The Bank of Thailand left its one-day repo rate unchanged as expected at 2.75%, declaring the current accommodative stance appropriate.

Last week’s published FOMC minutes revealed a faction of policymakers that prefers to end quantitative easing (QE) sooner rather than later.

The dollar has risen by 0.3% against the euro, yen and Swiss franc, 0.2% versus sterling, and 0.1% relative to the kiwi.  The loonie, Australian dollar and yuan are steady.  The Oz is hovering near a 3-week high.

Share prices rose 0.7% in Japan and the Philippines, 0.5% in Singapore and Hong Kong, and 0.4% in Thailand and Australia.  Such fell by 0.8% in Indonesia, 0.4% in India and 0.3% in South Korea and closed unchanged in China.  In Europe, equities have appreciated 1.2% in Italy, 0.5% in Germany and Spain, 0.4% in Britain, and 0.1% in France.

The 10-year German bund yield slid two basis points, while its Japanese and British counterparts dipped a single basis point each.

Gold is 0.1% firmer at $1663.40 per ounce.  WTI oil edged down 0.1% to $93.02 per barrel.

German industrial production only rebounded 0.2% in November following a 2.0% drop in October.  That left the October-November average 2.8% below its 3Q mean and October’s output 2.9% lower than a year earlier.  Consumer goods production slumped by 2.2% following a 1.1% decline in October.

British trade figures were also worse than hoped.  The total goods and services deficit in November printed at GBP 3.466 billion after October’s shortfall of GBP 3.729 billion, and it embodied a goods deficit of GBP 9.164 billion.  British shop price inflation remained at 1.5% in December.  A measure of take-home pay in the U.K. recorded the smallest on-year increase in 21 months during December.

Greek industrial production was 2.9% below a year earlier in November.  Norwegian retail sales excluding motor vehicles ticked up 0.2% in November and were 2.3% greater than in November 2011.  Romanian GDP growth in the third quarter of 2012 was revised up a tenth percentage point to negative 0.4%.  GDP was also 0.6% lower than in 3Q11.  Romania posted a EUR 410 million trade deficit in November, 63% narrower than the deficit in October. Hungary recorded a EUR 704 million trade surplus in November, 3.8% bigger than a year earlier.  Denmark’s trade surplus widened 18.8% on month to DKK 7.6 billion in November.  In the Czech Republic, the jobless rate ended 2012 at 9.4%, and CPI inflation wound up at 2.4%, down from 2.7% in November.

Australian retail sales dipped 0.1% in November following no change in October and were 3.1% higher than in November 2011.  New house prices in Australia increased 4.7% in November from October, while job vacancies sank 2.2% between August and November.

New Zealand building permits dropped 5.4% in November after a 2.2% decline the month before.

South Korean unemployment stayed at 3.0% last month as expected. 

An analyst at the Fitch credit rating agency warned of the possibility of a downgrade to Japanese debt if fiscal excesses are not addressed.

U.S. mortgage applications rebounded 11.7% in the first week of 2013.  Weekly U.S. oil inventories get reported later in the day.  Canada releases housing starts.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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