Chinese Yuan Weaker
July 18, 2013
Chinese monthly house price data revealed continuing upward pressure. Related to this, officials set the yuan at its weakest level in ten days.
British retail sales figures exhibited greater-than-anticipated strength.
Fed Chairman Bernanke will be reprising yesterday’s semi-annual testimony before the Senate Banking Committee today. On Wednesday, he asserted that no pre-announced tapering path of quantitative easing exists and that future policy will be data driven. But neither did he back away from the likelihood that asset buying will begin to get reduced later this year. The Fed’s Beige Book, also published yesterday, described modest to moderate growth in 11 of the 12 Federal Reserve districts. In the Dallas district, growth has been strong.
Japanese department store sales were buoyant in June, and the government is expected to upgrade its economic assessment further.
Scheduled U.S. data today include the Philly Fed manufacturing index, weekly jobless insurance claims, and the Conference Board’s index of leading economic indicators.
Japan’s Nikkei advanced by 1.3% overnight, but Chinese share prices fell 1.6% amid more concern about central bank liquidity provisions there. Equities rose 2.0% in Thailand, 1.1% in the Philippines, 0.9% in India and Indonesia, and 0.2% in Australia and Malaysia but fell by 0.8% in Taiwan and 0.1% in Hong Kong. In European trading, stocks are up 0.8% in Italy, 0.6% in Spain, 0.4% in Britain, and 0.3% in France. The German Dax is unchanged, however.
Gold and oil prices are 0.2% lower at $1280 per ounce and $106.27 per barrel.
The ten-year British gilt yield fell by four basis points. The 10-year German bund and Japanese JGB yields are a basis point lower.
The yen has weakened through the 100 per dollar threshold and is 0.5% softer than Wednesday’s close. The dollar also rose by 0.6% against the Aussie currency, 0.3% versus the Swiss franc, 0.2% against the euro, and 0.1% relative to the loonie and kiwi.
Not only did British retail sales growth of 0.2% in June meet expectations, but prior months were revised upward such that the 12-month increase now stands at a respectable 2.2% (2.1% excluding auto fuel).
Chinese house price inflation accelerated to 6.8% from 6.0% in May. 69 of 70 metropolitan areas showed on-year advances.
The National Bank of Australia reported weaker readings in business confidence (minus 1 after +2) and business conditions (down a point at minus 4). The Conference Board’s index of leading economic indicators in Australia was unchanged in May, as was the index of coincident economic indictors. Each had risen by 0.3% in May.
Euroland’s seasonally adjusted current account narrowed to a three-month low of EUR 19.6 billion in May from EUR 23.8 billion in April and EUR 23.1 billion in March. Over the twelve months to May, the current account accrued to EUR 183.7 billion from EUR 42.1 billion in the previous statement year. The Basic Balance (current account plus direct and portfolio long-term investment flows) widened to EUR 267.8 billion from EUR 19.8 billion during the 12 months to May 2012.
Euroland posted a fourth straight quarterly current account surplus in 1Q13, equivalent to 1.4% of GDP. The surplus had widened to 2.7% of GDP in the final quarter of 2012 from 1.7% of GDP in 3Q and 0.8% of GDP in 2Q12.
Japan department store sales were 7.2% greater in June than a year earlier. That compares favorably to a 2.6% on-year advance in May.
Hong Kong’s jobless rate of 3.3% in June was 0.1 percentage points lower than in May. The Dutch jobless rate widened to 8.5% from 8.3% in May.
Dutch consumer sentiment worsened two points to a reading of negative 38 in July.
New Zealand consumer confidence sank 3.3% in July. Wholesale turnover in South Africa climbed 0.6% on month and 7.7% on year in May. It was reported yesterday that South African retail sales increased 2.2% from April and 6.2% from May 2012.
The heat wave in the eastern United States continues.
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bernanke, Chinese house prices, Euroland current account, Yen
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