Lull in Data Flow… Equities Down

July 2, 2013

The Reserve Bank of Australia left its Official Cash Rate at a record low 2.75% and called the Aussie dollar still elevated.  Australia (2.6%) and New Zealand (0.9%), along with Japan (1.8%), were among the few stock markets to see prices rise overnight.

Share prices otherwise fell by 1.2% in the Philippines, 1.0% in Indonesia, 0.7% in Hong Kong, 0.6% in India, 0.3% in Taiwan, and 0.2% in Malaysia.  South Korea’s Kospi index is unchanged.  In Europe, equities have declined 0.8% in Germany, 0.5% in Italy, 0.4% in France and Britain, and 0.1% in Spain.

The dollar has firmed 0.5% against the Australian dollar, 0.2% versus the euro, Swissie, sterling, loonie and kiwi, and 0.1% vis-a-vis the yen.  The yuan is unchanged.

Ten-year sovereign debt yields rose three basis points in Japan, fell three bps in Britain and are unchanged in Germany.

Gold and oil prices edged up 0.3% and 0.2% to 1259.90 per ounce and $98.21 per barrel.

The data release front has been much quieter than on Monday.

Growth in Japan’s monetary base accelerated to 36.0% on year in June from 31.6% in May, 30.2% in 1Q, and 7.0% in full-2012.  But growth in the central bank’s balance sheet slowed in June: After climbing from JPY 164.3 trillion at end-1Q to JPY 174.7 trillion at end-April and JPY 184.3 trillion at end-May, such totaled JPY 187.1 trillion at midyear.

Japanese labor cash earnings posted no change from a year earlier in either April or May.  Income growth will be needed eventually to sustain the economic recovery, and there is concern that an acceleration of price inflation without upward movement in wage inflation will be toxic.

The JPMorgan manufacturing global purchasing managers index stagnated at 50.6 in June, pointing to less growth in the second quarter than manufacturing saw in 1Q.

Non-oil PMI survey results were reported for Egypt, Saudi Arabia and the United Arab Emirates.  All three readings for June were lower than those for May.

  • Egypt’s PMI printed a full point lower and at a 2-month low of 47.5.  Political instability is hurting that economy badly.
  • The Saudi PMI sank 0.7 points to 56.6.  Although connoting buoyant expansion, the reading was at a 21-month low.
  • The U.A.E. PMI fell 1.2 points to 54.1.  Orders grew more slowly than in May.

Britain’s construction purchasing managers index climbed 0.2 points to a 13-month high of 51.0, further reducing the likelihood that the Bank of England will ease policy on Thursday.  The last expansion of quantitative easing by the Bank of England was announced in July 2012 and completed before the start of 2013.  This meeting will be the first of the Mark Carney era as governor.

Producer prices in the euro area fell 0.3% on month in May and by 0.1% on year.  These drops were a tad more than forecast.  Producer prices in April-May were on average 0.9% below the first-quarter mean level.

A smaller but nonetheless sizable on-year increase in Hong Kong retail sales occurred in May.  Volume and value posted respective advances of 12.2% and 12.8%.

Commodity prices in New Zealand posted a second straight drop in June, this time by 3.7%.

Scheduled U.S. data arrivals today include factory orders, the New York NAPM PMI index, the IBD/TIPP optimism index, monthly auto sales, and weekly chain store sales.

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

Tags: , ,


Comments are closed.