Dollar Steady on Final Day of January
January 31, 2013
The dollar is unchanged against the yen, yuan, and Swiss franc, up 0.1% versus the euro, loonie, Australian dolar and sterling, and off 0.1% against the kiwi.
Share prices in the Pacific Rim closed up 0.2% in Japan and Taiwan but down 0.6% in India, 0.5% in the Philippines, and 0.4% in Australia and Hong Kong. The tone turned more clearly negative in Europe where stocks have fallen by 1.9% in Spain, 1.0% in France and Italy, and 0.6% in Germany and Britain.
Ten-year yields on German bunds and British gilts have dropped by five and four basis points. The 10-year Japanese JGB yield is two bps softer.
Oil and gold prices have declined 0.3% apiece to $97.66 per barrel and $1676.00 per ounce.
Bank Negara Malaysia left its overnight interest rate unchanged as expected at 3.0%. It has been at that level since a 25-basis point hike in May 2011.
The Reserve Bank of New Zealand also kept its policy stance unchanged and released statement that said an overvalued kiwi is helping to suppress import price inflation. The Official Cash Rate has been at 2.5% since a 50-basis point cut in March 2011.
Japan reported industrial production, auto output, housing starts, construction orders, labor cash earnings and the manufacturing PMI index.
- Industrial production in December advanced 2.5% on month, the most in a year, but was still down 7.8% from the end of 2011. Officials at the Ministry of Economy, Trade, and Industry upgraded their assessment to say the downtrend is showing signs of bottoming out.
- Production of motor vehicles was 17.2% weaker than a year earlier in December following on-year drops of 8.4% in November and 12.4% in October.
- Housing starts in December were 10.0% greater than a year before, similar to November’s 10.3% advance but below analyst expectations.
- A 4.8% on-year rise in construction orders last month was the first 12-month increase since September’s gain of 3.6%.
- Labor cash earnings recorded a 1.4% on-year drop in December, which was a 5-month trough.
- Japan’s manufacturing purchasing managers index rose in January for the first time since September, printing at 47.7 after a 44-month low of 45.0 in December. Readings below 50 connote a contraction of activity.
- Stock and bond transactions last week generated a JPY 897 billion net capital inflow after a JPY 477 billion outflow in the prior week. This pattern dovetails with the flattening of the yen’s downtrend.
German unemployment declined 16K in January, a much better result than analysts anticipated, and the jobless rate fell back to 6.8% from 6.9%. It had been at 6.8% from December 2011 until September 2012. Employment in 4Q12 was 0.8% higher than a year earlier, down from growth of 1.4% between 4Q10 and 4Q11.
German retail sales were again disappointing, dropping on a volume basis by 1.7% on month in December and by 4.7% from a year earlier. Sales declined 1.1% in 4Q, a bit more steeply than the decline of 0.9% in 3Q.
Greek retail sales tumbled 2.0% on month in November and were 16.8% lower than a year earlier. Norwegian retail sales increased 0.2% on month in December, the same gain as in November, but were 1.3% lower than a year before.
French consumer spending was again weaker than forecast last month, dipping 0.1% from November and edging only 0.1% above its year-earlier level. French producer price inflation slowed from 1.9% in November to 1.6% in December. Italian PPI inflation likewise decelerated to 1.8% in December from 2.0% the month before. Hungarian producer prices dropped 1.8% between December 2011 and December 2012.
British consumer confidence rose 3 points in January to a reading of minus 26. The Nationwide index of U.K. house prices posted a 0.5% monthly increase and was unchanged from a year earlier. Both comparisons exceeded expectations.
Spain recorded a EUR 1.78 billion current account surplus in November, more than twice as high as in October. Spanish CPI inflation slowed to 2.8% this month from 3.0% in December. Iceland’s trade surplus narrowed 67% on month to ISK 3.5 billion in December.
Taiwanese GDP last quarter was 3.4% greater than in 4Q11, slightly beating expectations. Filipino GDP exceeded the year-earlier level by 6.8% in 4Q and accelerated to 6.6% in full-2012 from 3.9% in 2011. South Korean retail sales fell 1.1% on year last month after a 2.3% increase in November. Hong Kong retail sales advanced by 8.8% in value in the year to December and by 8.1% in volume terms. Malaysian producer prices dropped 5.0% between end-2011 and end-2012. The Thai trade surplus narrowed 56% to $280 million last month.
New home sales in Australia increased the most in 8 months during December and posted increases of 3.3% between 3Q12 and 4Q12 and 12.7% between the final quarters of 2011 and 2012. Private sector credit grew 3.6% in the year to December, including a monthly 0.4% advance that month. New Zealand M3 money growth accelerated to a 6.0% 12-month pace in December from 5.5% in November.
South African producer price inflation held steady at 5.2% last month. Turkey posted a barely changed trade deficit of $7.18 billion last month.
Scheduled U.S. data to be released today include weekly jobless insurance claims, personal income and spending, and the Chicago and Milwaukee regional purchasing manager surveys for manufacturing. Canadian producer price figures arrive as well.
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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