A Less Volatile Day So Far than Thursday

August 16, 2013

The dollar is unchanged against the Swiss franc, kiwi and yuan.  The greenback has edged up 0.2% versus the Canadian dollar and 0.1% relative to the euro, yen and sterling while dropping 0.3% against the Australian dollar.

Share prices slumped around the Pacific Rim by 3.9% in India, 2.5% in Indonesia, and 0.8% in the Philippines, Japan, and Australia.  Chinese stocks jumped intra-day at one point but also closed 0.8% lower on balance.  Equities in Europe appear to have stabilized, with gains of 0.4% in Italy and 0.2% in France and Spain.  The German Dax and British Ftse are off 0.2% and 0.1%.

The 10-year Japanese JGB yield advanced two basis points.  But German bunds are unchanged, and the British 10-year gilt is a basis point lower.

The price of gold is unchanged at $1362.1 per ounce after rising sharply yesterday, and WTI oil has dipped by 0.1% to $107.23 per barrel.

A 6.8 earthquake near Wellington, New Zealand is not believed to have caused loss of life or major damage.

Muslims in Cairo plan a big rally of collective anger.

The Assistant Governor of the Reserve Bank of Australia, Guy Debelle, downplayed the risk associated with a facility to enable banks to meet tougher capital ratios.

Consumer prices in the euro area fell 0.5% on month in July and recorded an unchanged 1.6% 12-month rate of increase.  Core inflation dipped 0.1 of a percentage pint to 1.1%, while energy held at 1.6% on year.  Food accelerated to 3.5%, but non-energy industrial goods inflation decelerated further to a mere 0.4% from 0.7% in June and 1.5% in July 2012.  Sharp on-year reductions of inflation between July 2012 and July 2013 were posted by Italy to 1.2% from 3.6%, Cyprus to 0.7% from 3.8%, Ireland to 0.7% from 2.0%, Portugal to 0.8% from 2.8%, and France to 1.2% from 2.2%.

Euroland’s seasonally adjusted trade surplus of EUR 14.9 billion in June followed EUR 13.8 billion in May and EUR 15.0 billion in April.  Between May and June, exports and imports rose 3.0% and 2.5%, but compared to June 2012, exports and imports were 2.5% and 5.8% lower.  The first-half cumulative non-adjusted trade surplus of EUR 73.8 billion this year was more than three times wider than the EUR 21.3 billion in the first half of 2012.

Euroland’s EUR 16.9 billion current account surplus in June was the smallest since EUR 16.7 billion in February.  In the twelve months through June, the current account surplus equaled 2.1% of GDP versus 0.7% of GDP in the previous statement year.  There was a net surplus of EUR 256 billion on Euroland’s so-called Basic Balance in the year to June; the Basic Balance, which combines the current account and long-term capital movements, produced a EUR 2.9 billion deficit in the twelve months to June 2012.

The French index of leading economic indicators was flat in June, and the index of coincident economic indicators dipped by 0.1%.

GDP in Hong Kong advanced 0.8% in the second quarter and accelerated to an on-year pace of 3.3% from 2.9% in the year to 1Q.

Singapore recorded a wider SGD 18 billion current account surplus in the second quarter but a smaller July trade surplus of SGD 3.53 billion.

Producer prices in South Korea were unchanged on month in July and 0.9% lower than a year earlier after falling 1.4% in the year to June.

Sri Lanka’s central bank left its repo and reverse repo interest rates unchanged at 7% and 9%.

Like Thursday, there are several U.S. data releases planned today: housing starts and building permits, productivity and unit labor costs, and the preliminary early August consumer confidence gauge compiled by Reuters and the University of Michigan.  Thursday’s figures encouraged markets to anticipate a tapering of Fed quantitative easing next month and spurred more losses in bond and stock prices as well as the dollar.

Canada’s monthly survey of manufacturing sales, orders and inventories also gets released later today.

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

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