Many Data Releases as Midyear Draws Near

June 27, 2013

Stocks rallied further in Asia but not Europe.  Share prices increased 3.0% in Japan, 2.9% in South Korea, 3.4% in the Philippines, 1.9% in Indonesia, 1.8% in India, 1.7% in Australia, and 1.3% in Taiwan but slid 0.4% in China and Singapore.  Equities in Europe are down 1.0% in Spain and 0.1% in Italy, unchanged in France, and up 0.3% and 0.1% in Britain and Germany.

The yen, down 0.5% against the dollar, hit overnight lows of 98.39 per USD and 128.12 per euro.  The greenback is up 0.3% versus the Swiss franc and 0.2% against sterling but down 0.4% relative to the kiwi, 0.2% against the Canadian and Australian dollars, and 0.1% vis-a-vis the euro.  The yuan is steady.

Ten-year sovereign debt yields are off four basis points in Britain, two bps in Japan and a single basis point in Germany.

Oil firmed 0.3% to $95.74 per barrel. Gold edged 0.1% lower to $1228.70 per ounce.

Revised British real GDP figures showed the same 0.3% quarterly gain but a smaller 0.3% on-year increase.  There have been four quarters of contraction since 4Q10 but no two in succession.  In the year between 1Q12 and 1Q13, consumption rose 1.5% and government expenditures increased 0.8%, but investment, exports, and imports dropped by 8.3%, 0.8%, and 0.9%.  GDP in the UK remains 2.6% below its 1Q08 peak.  Such fell by 7.2% during the Great recession.

Britain recorded a GBP 14.5 billion current account deficit in 1Q13 after deficits of GBP 13.6 billion in the fourth quarter of 2012 and GBP 15.3 billion in 3Q12.

Euroland’s retail purchasing managers index jumped 2.3 points to a 15-month high of 49.1 in June.  Germany’s retail PMI reading of 55.3 was up from 51.5 in May and at a 16-month peak.  The French retail PMI went up 3.6 points to a 1-year high of 48.9, but Italy’s dipped 1.4 points to a 2-month low of 40.7.

Ezone M3 grew 2.9% on year in May and March-May.  A deceleration from 3.2% in the year to April was caused a deeper 15.7% on-year drop in marketable instruments (M3-M2).  Private loans dropped 1.1% from a year earlier, largely reflecting a 3.1% drop in loans to non-financial firms.

Economic sentiment in Euroland rose 1.8 points to a reading of 91.3 in June.  Such bottomed last October at 85.4.  The improvement was most evident in industrial sentiment, up 1.8 points to -11.2, and consumer confidence, up 3.1 points to -18.8.  The business climate index had a reading of -0.68 after -0.75 in May and -1.04 in April.

Central banks in Taiwan and the Czech Republic left there main interest rates unchanged as expected at 1.875% and 0.05%.

German import prices posted a third straight monthly decline in May, this time of 0.4%.  The 12-month rate of decrease was 2.9% after a drop of 3.2% in the year to April and of 2.3% on-year in March.  Excluding mineral oil products, import prices were 2.0% lower than a year before.  Exports prices fell by 0.3% on month and 0.5% on year.

German labor statistics were better than forecast.  Unemployment fell 12K in June, the first drop since February, after increases of 17K in May and 4K in April.  The jobless rate held steady at 6.8%.  Employment was up 0.7% on year in April-May, same as the on-year increase in the first quarter.  Danish unemployment dipped 0.1 percentage points to 4.4% in May.

French consumer confidence unexpectedly dipped another point to a reading of 78 in June.  Portuguese consumer confidence rose 1.1 points to -53.9, and business sentiment in Portugal also improved.  Turkish consumer confidence fell to 76.2 from 77.5 in May.

Sweden posted a NOK 5.7 billion trade surplus in May, down from NOK 9.4 billion in April and NOK 10.1 billion in May 2012.  The Irish current account surplus was more than halved to EUR 1.2 billion in 1Q13 from EUR 2.9 billion in 4Q12.  Irish GDP was 0.9% weaker than a year before in 1Q13.

Belgian CPI inflation accelerated to a six-month high of 1.6% in June.  Spanish CPI inflation rose to 2.2% from 1.8% in May.  Icelandic CPI inflation held steady this month at 3.3%.  South African PPI inflation slowed to 4.9% in May from 5.4% in April.

Japan’s all industry index, a monthly proxy for GDP, rose by 0.4% in April and 0.5% from a year before.  April’s level was 0.7% above the 1Q average.  Service sector activity was unchanged on month, but industrial production and construction rose by 0.9% and 0.3%.

The stampede out of bonds worldwide was reflected in Japanese weekly two-way traffic.  Foreigners sold JPY 1.047 trillion of Japanese bonds, and the Japanese sold JPY 1.188 trillion of foreign bonds in the week of June 22.  Stock and bond transactions that week generated a net JPY 299 billion capital inflow after an inflow of JPY 845 billion in the previous week.

New Zealand business sentiment printed much higher in June at 50.1 after 41.8 in May.  New Zealand’s trade surplus unexpectedly contracted to just NZD 71 million in May from NZD 157 million in the prior month.

Scheduled U.S. data releases arriving today include personal income and spending, pending home sales, and weekly jobless insurance claims.

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

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