Global Share Prices Higher following 3-Day Weekends in the U.K. and U.K.

May 28, 2013

Equities climbed 1.1% in Japan and Hong Kong, 1.7% in China, 1.8% in Indonesia, 0.7% in India, 0.3% in south Korea and 0.2% in Australia.  Share prices in Europe so far show gains Tuesday of 1.7% in Italy, 1.6% in Britain, 1.5% in France and Spain and 1.1% in Germany.  There is some speculation that the rise of Japan’s Nikkei may partly reflect government buying.

The dollar has gained 0.9% against the yen and 0.5% versus the Swiss franc but is down by 0.5% and 0.3% against the Australian and New Zealand currencies.  The greenback is unchanged relative to the euro, loonie, sterling and yuan.

Ten-year sovereign debt yields have risen by five, three, and two basis points in Japan, Britain and Germany.  Futures trading point to a rise in Treasury yields, too.

Gold moved 0.4% lower to $1380.50 per ounce, but WTI oil recovered 0.7% to $94.83 per barrel.

Japan reported disappointing data for small business sentiment and corporate service prices.

  • The Shoko Chukin index of Japanese small business confidence slipped further below 50 (a neutral reading) to 48.2 in May from 49.4 in April and 49.7 in March.  Analysts were anticipating a score of 50.  The index’s recent low was 43.3 last November.  All of the deterioration in May involved non-manufacturers, whose sub-index fell 2.1 points to 49.0.  The manufacturer’s index stayed level at 47.2.
  • Corporate service prices recorded a 12-month 0.4% rate of decline, the most since December, and a 0.3% month-on-month drop.  Advertising fell 5.4% on year.  The 0.4% drop in the total CSP from April 2012 matched the average 2012-over-2011 rate of corporate service deflation.

China’s index of leading economic indicators dipped 0.2% in April to a 99.8 reading.  In Thailand, industrial production was 3.8% less in April than a year earlier, a much weaker result than expected.  Such had dropped 1.2% on year in February but then risen 1.2% in March.

German import prices fell 1.4% in April and 3.2% from a year earlier.  Even when mineral oil products are excluded,  import prices fell by 0.5% from March and 1.4% from April 2012.  The rate of decline in the overall index steepened from 2.3% in March, 1.6% in February, and 0.8% in January.  The policy hawks at the ECB ought to apologize for taking the risk of inflation too seriously.  German export prices slid 0.2% and were 0.4% lower than a year earlier.

Swedish producer prices fell by 1.1% on month and 5.3% on year in April following a 4.4% 12-month decline in March.  Domestic producer prices were 1.7% lower than a year before, whereas import prices plunged by 8.3%.

The Swedish trade surplus of SEK 8.8 billion in April was larger than surpluses of SEK 7.4 billion in March and SEK 3.4 billion in April 2012.  Exports rose 1.0% on month and posted a smaller on-year drop of 1.6% than imports, which were 7.5% less than a year before.  The Swiss trade surplus narrowed 8.7% to CHF 1.73 billion in April, reflecting a 3.4% increase in imports on the month.  Swiss jobs last quarter of 4.152 million surpassed analyst expectations. 

Irish retail sales rose 0.2% in April but were still 0.5% lower than a year earlier.

Austria’s manufacturing purchasing managers index improved 0.4 points.  While both orders and production had readings above 50, the overall PMI score of 48.2 was below the no-change threshold for an eleventh straight time.

South African GDP growth slowed last quarter, rising 0.9% from 4Q12 at a seasonally adjusted annualized rate.  On-year growth dropped to 1.9% from 2.5% in the year to 4Q12.

Scheduled U.S. data releases today include the Case Shiller house price index, the Richmond and Dallas Fed manufacturing indices, and the Conference Board’s index of leading economic indicators.  Another interest rate cut appears likely today from Hungary’s central bank.

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

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