Drop in Yen and Share Price of Apple

January 24, 2013

The yen has declined 1.0% against the dollar.  Japan posted another monthly and annual trade deficit.

Apple shares slumped some 10% following news of weaker revenue growth.

The World Economic Forum in Davos, Switzerland entered its second day.

The HSBC Chinese manufacturing purchasing managers index rose to a 24-month high of 51.9 in January according to the preliminary estimate and was above the 50 no-change threshold for a fifth consecutive time.

Preliminary PMI data also arrived for the euro area, Germany, and France, revealing a bigger-than-anticipated overall improvement despite very poor French results.  Confidence in the euro area was strengthened additionally by solid balance of payments data in November.  The euro edged 0.1% higher against the dollar.

The dollar rose 0.6% against the Australian dollar and 0.2% against the loonie, kiwi, and sterling.  The greenback is unchanged versus the yuan and Swissie.

Japan’s Nikkei rebounded 1.3% after reacting adversely on Wednesday to the Bank of Japan’s policy changes.  Elsewhere in the Pacific Rim, share prices fell by 1.0% in China, 0.6% in Taiwan, 0.5% in India and 0.2% in Hong Kong, but there were rises of 0.5% in Australia and Singapore, 0.4% in Malaysia and the Philippines, and 0.1% in Indonesia and New Zealand.  In Europe, the British Ftse is up 0.3%, and stocks in France and Spain edged 0.1% higher, but the German Dax has slipped 0.1%.

Ten-year British gilt, German bund, and Japanese JGB yields declined by four, three, and one basis points.

The price of gold dropped 0.6% to $1677.40 per ounce.  That for WTI crude oil firmed 0.2% to $95.42 per barrel.

Japan’s customs clearance trade deficit widened to JPY 6.93 trillion last year from JPY 2.57 trillion in 2011, as exports sank 2.7% while imports rose 3.8%.  In the year to December, exports to China plummeted 15.8% and shipments to the European Union slumped by 11.1%.  The seasonally adjusted trade deficit in December was JPY 801 billion following a revised JPY 852 billion in November. 

Japanese stock and bond transactions generated a JPY 952 billion net capital inflow last week, seven times greater than the net inflow in the previous week of January 12.

Euroland’s seasonally adjusted current account surplus of EUR 14.8 billion in November was twice as wide as forecast and the largest surplus so far in 2012.  The unadjusted current account showed a surplus of EUR 19.8 billion in November and EUR 106.2 billion over the past twelve reported months.  The Basic Balance, which aggregates the current account with long-term capital movements, showed a surplus of EUR 95.2 billion during the year to November compared to a deficit of EUR 154 billion over the twelve months to November 2011.

Euroland’s composite purchasing managers index improved a full point in January to a ten-month high of 48.2.  Both the manufacturing and service sector PMIs, with respective readings of 47.5 and 48.3, also constituted the best scores since last March.  All of these results were better than analysts were predicting.  They point to a diminishing intensity of recession as 2013 began.

The most encouraging aspect of the PMI data was a 3.3-point rise in Germany’s services index to 55.3, which was the best score since June 2011.  The German composite  PMI also went up 3.3 points to 53.6, signifying clear recovery, while the German manufacturing PMI of 48.8 remained below the expansion or contraction threshold of 50 but was 2.8 points higher than December’s reading.

France’s downturn intensified.  The composite French PMI sank 1.9 points to a 46-month low of 42.7, and the French services PMI of 43.6 was also the worst score since March 2009.  The manufacturing PMI fell 1.7 points to 42.9 and was below 50 for the eleventh straight time.  The French and German economies are no longer on the same page.

Germany’s index of leading economic indicators stagnated in November, however, and so did its index of coincident indicators.

Britain’s distributive trends index dipped two points to a reading of 17 in January.  Such followed a sharp deterioration to 19 in December from 33 in November.

The British Bankers Association observed 33,636 mortgage approvals in December, somewhat less than had been expected and little changed from November’s total of 33,551.

Swedish producer prices rose 0.5% sequentially last month but recorded a 2.4% twelve-month rate of decline. Finnish PPI inflation ticked up to 1.5% from 1.3% in November.  Sweden’s jobless rate of 7.4% was above the December 2011 level of 7.1%.  Spanish unemployment climbed to another record high of 26.02% last quarter from 25% in the third quarter of 2012.  Italian retail sales fell 0.4% on month and 3.1% on year in November, and Finnish retail sales volume was 1.2% lower than a year before in December. Austrian industrial output posted a 0.5% on-year decline in November after being 1.3% higher in October than a year earlier.  Dutch consumer spending fell 3% on year in November.

The Czech economic sentiment index weakened 0.3 points in January to a negative 4.2 reading.  A 1.8-point slide in consumer confidence offset a 0.1 point rise in business sentiment. Polish retail sales were 2.5% lower than a year earlier in December, and the jobless rate of 13.4% was a half percentage point higher than in November.

South Korean on-year GDP growth was 1.5% last quarter, the same as in 3Q12 and a tad below market expectations.  Vietnamese CPI inflation accelerated to 7.1% in January from 6.8% in December.

Bangko Sentral ng Pilipinas retained its 3.5% overnight borrowing rate as expected, but the Filipino central bank anchored the Special Deposit Account rate at 3.0%.  The South African Reserve Bank delivers its first scheduled interest rate announcement of 2013 as well.

New Zealand’s business manufacturing purchasing managers index rose 1.3 points to a 50.1 score in January.

Aside from the preliminary Markit estimate of a U.S. manaufacturing PMI, the Conference Board will be releasing the U.S. index of leading economic indicators.  Also, the Department of Labor reports weekly jobless insurance claims, and the Kansas City Fed’s monthly manufacturing survey arrives.

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


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