Data Deluge, Press Report Denials, and Quarter-End

June 28, 2013

Lots of data were released on this final working day of the second quarter.

  • Japanese figures show stronger inflation and activity.
  • German retail sales also beats expectations.  German CPI inflation accelerated.

Being the final trading day of the quarter, position-squaring could impact market action today.

An unidentified ECB official called German press reports erroneous that quantitative easing is under consideration.

EU leaders continued their semi-annual summit amid reports that promised resources to support troubled banks is getting watered down.

China’s top central bank official, Governor Zhou, reaffirmed intent to sustain a stable financial market and defended strong growth.

Asian share prices posted strong advances of 3.5% in Japan, 3.1% in Indonesia, 2.6% in India, 2.2% in the Philippines, 2.3% in Taiwan, 1.9% in China, 1.8% in Hong Kong, 1.6% in South Korea, 1.3% in Malaysia, and 1.0% in Singapore.

European equities are down 0.6% in Italy, 0.4% in France, 0.3% in Spain, and 0.1% in Germany.  The British Ftse has edged 0.1% higher.

Gold slumped another 0.8% and is at $1202.30 per ounce.  Oil climbed 0.5% to $97.56 per barrel.

Japanese data highlights revealed:

  • A much larger-than-forecast 2.0% increase of industrial production in May.  Output was just 1.0% lower than in May 2012 versus a 7.9% on-year decline in 1Q13.  METI officials retained the assessment that production shows signs of picking up at a moderate pace.
  • A 4.1% unemployment rate for a third straight month in May.  Jobs were 0.7% higher than a year before, and the job offers/seekers ration, 0.90, was at the highest level since mid-2008.
  • A 1.5% on-month increase in retail sales, double expectations, and a 0.8% 12-month increase in such.  Large store sales dipped 0.4% on year compared to a 1.6% on-year decline in 1Q.
  • Real household spending ticked 0.1% upward between April and May but posted a 1.6% 12-month decline.  Real disposable income growth accelerated to 3.1% on year from 0.5% in April and 0.6% in March.
  • The purchasing managers index for Japanese manufacturing rose 0.8 points to a 2-year high of 52.3.
  • Motor vehicle production was 6.2% less than a year earlier in May, which was a bit better than the result in April.
  • On-year growth in housing starts spiked to 14.5%, the best in more than a half-year.
  • Construction orders soared 26.0% in the year to May.
  • Core CPI inflation was zero in May and non-negative for the first time since October, thanks to a sharp jump in utility costs.

German retail sales volume rose 0.8% on month in May and 0.4% from a year earlier.  April-May sales were unchanged from the 1Q mean, however.

Among four reporting German states, CPI inflation accelerated by 0.2-0.4 percentage points between May and June, mostly on a base effect.  The month-on-month changed averaged +0.1%.

French consumer spending increased 0.5% on month and 0.6% on year in May, easily exceeding expectations.  French PPI inflation swung to minus 0.1% in May from +0.6% in April.

Italian business sentiment rose 1.5 points to a reading of 90.2 in June, surpassing expectations for the second month in a row.  Italian CPI inflation ticked up 0.1 percentage point to 1.2% in June.

Britain’s Nationwide house price index rose 0.3% on month in June and accelerated to a 12-month increase of 1.9% from 1.1% in May.  The U.K. services index was 0.8% higher in February-April than in the prior three months.  Consumer confidence rose a point in the U.K. to a 2-year high of minus 21.

The Swiss index of leading economic indicators rose 0.07 points to 1.16 in June.  Switzerland posted a CHF 20.7 billion current account surplus in the first quarter.  Chronic surpluses have underpinned the Swiss currency since the birth of floating exchange rates.

Swedish retail sales advanced by 0.8% on month and a steeper 3.1% on year in May.  Danish GDP was unchanged on quarter in 1Q and 0.7% weaker than in the first quarter of 2012.  Norwegian retail sales jumped 1.8% on month and 2.0% on year in May.  Greek retail sales were 14.2% lower in April than a year before, and producer prices in that troubled economy were 1.1% softer than a year earlier.  Dutch producer prices fell 1.9% in the year to May versus a 0.1% on-year dip in April.

According to the MNI measure, business sentiment in China slid 0.3 to a score of 54.9 in June.

South Korean industrial production fell in May by 0.4% from April and 1.4% from a year earlier.

In Australia, private sector credit growth slowed to a 12-month pace of 3.0% in May from 3.1% in April.  M3 slowed to 7.0% in April from 7.4% in the year to March. New Zealand M3 money grew 6.2% in the year to May, down from 6.5% in April.  New Zealand building permits, which had been projected to fall, instead rose 1.3% in May on top of a massive 21.0% surge in April.

In South Africa, M3 money and domestic credit recorded marginally softer on-year increases in May of 9.75% and 9.05%.  Turkey’s trade deficit narrowed 3% to $9.98 billion in May. 

Producer prices in the year to May fell by 5.0% in Singapore and 4.6% in Malaysia.  Each drop was less than recorded in the year to April.  Business sentiment in Thailand improved 5.1 points to a reading of 53.9 in May. 

Scheduled U.S. data releases today include the Chicago and Milwaukee regional manufacturing PMIs and the final U. Michigan/Reuters consumer sentiment index.  Canadian monthly GDP and producer prices arrive.  Colombia has a central bank rate announcement that is unlikely to involve a change.

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

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