Some Japanese Volatility to Disturb an Otherwise Quiet Monday

May 27, 2013

Markets are closed today in the United States for Memorial Day and the United Kingdom for a spring bank holiday.

Japan’s Nikkei-225 equity index tumbled 3.2%, and the 10-year JGB yield fell by four basis points to 0.82%.  The yen rose 0.4% against the dollar.

  • Minutes from the Bank of Japan’s April 26 Policy Board meeting point to monetary easing until 2% inflation is secured but also revealed a consensus that growth is improving and that 2% inflation will be seen by the second half of the projection period.
  • BOJ Governor Kuroda said recent market moves (e.g. the sharp rise in JGB yields) did not indicate excessive market optimism.

In other market action,

  • Gold firmed 0.4% to $1391.90 per ounce.
  • West Texas Intermediate oil is 0.6% softer at $93.58 per barrel.
  • The U.S. currency is unchanged against the Australian and Canadian dollars, 0.1% firmer against the kiwi and Swiss franc, and 0.1% lower versus sterling and the euro.  The Chinese yuan is 0.2% stronger.
  • Share prices are mixed, with gains of 1.7% in India, 1.1% in Italy,  0.9% in Taiwan, 0.6% in Germany, 0.7% in France, 0.5% in Spain, 0.3% in Hong Kong and 0.1% in China but drops of 1.4% in Indonesia, 1.1% in New Zealand, and 0.5% in Australia.
  • The 10-year German bund is unchanged, but yields on comparable Spanish and Italian sovereign debt fell by six basis points.

Consumer sentiment in South Korea improved by a greater-than-anticipated two points to a 104 reading in May.

Chinese industrial profits were 9.3% higher than a year before in April versus a 12.1% on-year advance in the first quarter.

Hong Kong’s trade deficit narrowed by HKD 6.45 billion on month in April because of a 2.3% monthly contraction in imports.  Exports slid just 0.5%.

Britain’s Hometrack house price index increased 0.4% in May, most since May 2007, and was also up 0.4% from a year earlier.

Dutch business sentiment rose 1.4 points to a reading of negative 4.2 in May. 

Swedish retail sales volume edged up 0.1% in April and rose 2.0% on year, a half percentage point more than in March.

Finnish manufacturing sector sentiment rose a point to minus 5 in May, while sentiment in construction sank 13 points to minus 33.  Consumer confidence also deteriorated, dropping 1.4 points on month and 7 points on year to +5.

The Danish government revised down projected GDP growth to 0.5% this year and projected only 1.4% growth in 2014.

Norway’s 3.7% jobless rate in February-April was a tenth percentage point higher than in November-January.

Greece recorded another trade deficit in March, amounting to EUR 1.04 billion.

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

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