Fresh Data Supports Euro Uptrend

February 1, 2013

The euro touched fresh highs of $1.3676 and JPY 126.19, while the yen sank to 92.31 per dollar.

Lots of data released: manufacturing PMIs, Ezone CPI and unemployment, Japanese labor statistics and household spending, and Australian  quarterly consumer prices.  Still to come: U.S. Labor Department jobs report. manufacturing PMI, and U. Michigan/Reuters consumer sentiment index.

The dollar shows net overnight losses of 0.7% against the Swiss franc and 0.5% versus the euro and loonie.  The greenback has also risen 0.7% against the yen, 0.3% relative to the Aussie dollar, 0.2% versus the yuan and 0.1% against sterling.

The 10-year JGB advanced two more basis points.  The Nikkei-225 closed 0.5% higher at a 33-month high of 11,191.  Share prices climbed 2.1% in China, 1.2% in the Philippines, 0.9% in Australia, 0.6% in Indonesia but fell 0.6% in India.  In Europe stocks slumped 1.8% in Spain and 0.4% in Italy but advanced 0.9% in France, 0.4% in Britain and 0.2% in Germany.

Gold and oil prices rose 0.3% to $1667.10 per ounce and $94.22 per dollar.  Bunds and gilts are unchanged.

Euroland unemployment remained at 11.7% for a third straight month in December instead of rising as predicted.  The jobless rate had been at 10.7% at the end of 2011.

Ezone CPI inflation eased to 2.0% in January instead of staying at 2.2% as analysts had presumed.  Energy prices were 3.9% higher than in January 2012, while all other consumer prices collectively posted an increase of only 0.8%.  Less inflation gives the ECB more flexibility to keep an accommodative stance.

Australian producer prices rose 0.2% last quarter, trimming the on-year pace to 1.0% from 1.1% in the third quarter and 2.9% in the final quarter of 2011.  The Reserve Bank of Australia holds a policy meeting next week for the first time in two months.  In other Australian data released today,

  • Commodity prices in local currency were 7.3% lower than a year before in January.  The drop in SDR terms was 6.4%.
  • Australia’s factory-sector purchasing managers index weakened sharply to 40.2 in January from 44.3 in December.  Activity is contracting sharply.

Euroland’s January manufacturing PMI was revised higher to and 11-month high of 47.9 from a preliminary estimate of 47.5.  Such printed at 46.1 in December and 44.0 last July.

  • The German PMI printed at an 11-month high of 49.8 versus 46.0 in December, strongly suggesting a return to positive GDP growth in 1Q13.
  • But France’s recession intensified with a factory PMI reading in January of 42.9, a 4-month low and 1.7 points below December’s score.
  • Italy’s PMI was 47.8, a 10-month high and 1.1 points above December’s reading.
  • Spain’s 46.1 score showed a month-on-month increase of 1.5 points and represents a 19-month high.
  • The Dutch score was above the 50 expansion-or-contraction threshold for the first time since September, albeit just barely with a score of 50.2.
  • Ireland’s 50.3 was also just marginally above 50 and constitutes a 9-month low.
  • Austria’s 48.6 was a half-point better than in December and at a 2-month high.
  • Greece remains in a very deep recession, although its PMI reading of 41.7 was above December’s score of 41.4.

In other purchasing manager surveys released today,

  • Chinese data were mixed.  The HSBC PMI improved 0.8 points to 52.3, with the best production in nearly two years.  But the government-sponsored CFLP PMI slid 0.2 points and was very close to the 50 threshold with a reading of 50.4.
  • India’s PMI dropped 1.5 points partly because of power outages.  Such was still decent at 53.2 and accompanied by indications of less inflation.
  • Turkey’s PMI hit a 22-month high of 54.0.
  • The South African PMI score of 49.1 after 47.4 indicates a lessening rate of contraction in manufacturingRussia’s PMI rebounded from a 15-month low of 50 in December to 52.0 in January, which was on a par with its long-term mean value.
  • Poland’s PMI edged 0.1 point upward to 48.6, best in six months.
  • The Czech PMI  of 48.3 increased 1.7 points from December’s 41-month low.
  • Hungary’s PMI leaped to 55.9 from 48.9 in December.
  • Britain’s purchasing managers survey was disappointing, though not far from expectations.  After a 15-month high in December, such fell 0.4 points to 50.8 in January.
  • The Swiss PMI reading of 52.5, in contrast, was two points better than forecast and three points above December’s level.
  • Norway’s index increased 0.5 points to 50.5.
  • Sweden’s PMI improved 4.6 points to 49.2.
  • Denmark’s PMI remained very strong, even as it fell 0.9 points to a reading of 56.1.
  • Back over to Asia, the Indonesian PMI dipped a full point, swinging from 50.7 to 49.7.  Vietnam’s PMI moved above 50 to 50.1 after dipping to 49.3 in December from 50.3 in November.  Taiwan’s PMI rose 0.9 points to a 10-month high of 51.5.  The South Korean PMI edged off 0.2 points to 49.9, signaling further stagnation. 

Japan’s jobless rate edged up a tenth percentage point to 4.2% in December despite an increase in the job offers ratio to 0.82 from 0.80 in November.  Employment fell by 0.6% on year, and the labor participation rate also declined, reaching 58.5% after 59.1% in November.

Japanese household spending dropped in volume terms by 0.7% both between November and December and compared to its year-earlier level.

Japanese motor vehicle sales sank 12.9% between January 2012 and January 2013, a much deeper on-year drop than that of 3.4% in December.

Italian unemployment stayed at 11.2% last month on a seasonally adjusted basis.

South Korean consumer price inflation ticked up to 1.5% in January from 1.4% in December.  Indonesian consumer prices were 4.6% higher in January than a year earlier.

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

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