A Sea of Data Fails to Stir the Dollar

August 30, 2013

The dollar is unchanged against the euro, kiwi, yuan and sterling and down just 0.1% versus the yen, loonie, Australian dollar and Swiss franc.

The big overnight news was a vote by Britain’s House of Commons not to participate in a military strike on Assad’s forces in Syria.  This has made the U.S. response and its timing even more uncertain.

Being the final trading day of the month, investors must sift through a deluge of fresh economic data.

Share prices rose 2.2% in Indonesia and the Philippines, 1.4% in Malaysia, 1.3% in Taiwan, 1.2% in India, 1.0% in South Korea and 0.8% in Australia but fell by 0.5% in Japan, 0.3% in Singapore and 0.2% in China.  Equity markets in Europe are down 0.7% in Italy, 0.5% in France and Italy, and 0.4% in Britain and Germany.

The British vote on Syria depressed commodity prices.  Gold and WTI crude oil are 1.3% and 0.9% lower at $1394 per ounce and $107.86 per barrel.

Japanese data mostly confirmed continuing economic recovery and withdrawal from deflation.

  • Industrial production jumped 3.2% in July, erasing a 3.1% drop the month before and producing a 1.6% on-year advance.  Officials expect further increases in August and September based on survey evidence.  Auto production recorded a much smaller on-year drop of 1.5% after plunging 9.5% in the year to June.
  • Overall CPI inflation increased a half percentage point to 0.7% in June.  The seasonally adjusted CPI rose 3.3% at a seasonally adjusted rate between April and July.  Core CPI inflation last month also rose to 0.7%.
  • Japan’s manufacturing purchasing managers index printed 1.5 points higher at 52.2, best since February 2011.
  • The jobless rate fell another 0.1 percentage point (ppt) in July after sliding 0.2 ppts in June and, at 3.8%, is back at pre-financial crisis levels.  The job offers to seekers ratio continues to climb, rising 0.02 points to 0.94, and employment was 0.5% greater than a year earlier.
  • Housing starts and construction orders were a robust 12.0% and 13.7% higher in August than a year before.  Summer activity has been very strong.
  • Real household spending after seasonal adjustment advanced 0.9% on month in July.  Spending was just 0.1% above a year earlier, however.

Euroland CPI, sentiment, and unemployment figures were released.

  • On-year consumer price inflation slowed to 1.3% in August from 1.6% in both June and July.  That’s clearly below target and compares to 2.6% in the year to August 2012.  Core inflation held steady at 1.6%, while energy swung from +1.6% to minus 0.4%.
  • Overall economic sentiment jumped 2.7 points to 95.2 in August and was 6.6 points higher than in April.  Industrial sentiment also went up 2.7 points.  The service sector improved by 2.5 points.  Consumer confidence gained 1.8 points, retail rose 3.3 points, but construction sentiment dipped 0.9 points.
  • The business climate index improved from -0.52 in July to -0.21 in August, which was the best result since March 2012.
  • Ezone unemployment held at 12.1% for a fourth straight time in July.  Joblessness was below 5.5% in Germany on an ILO basis but above 25% in Spain and Greece.

Several countries’ producer price statistics were reported.  The Italian PPI posted a slightly greater on-year drop of 0.9% in July. Hungarian producer prices rose 1.3% in the year to July, twice the 0.6% advance in June. In the year to July, producer prices fell by 3.0% in Malaysia, 2.2% in Cyprus, 1.8% in Bulgaria, 1.0% in the Netherlands, and 0.8% in Austria. 

Britain’s Nationwide house price index increased 0.6% sequentially in August and 3.5% from a year earlier.  Both gains were somewhat smaller than those in July.  The Bank of England reported 1) a 1.8% on-year rise of M4 money in July versus a 0.1% dip between mid-2012 and mid-2013, 2) stronger-than-forecast mortgage approvals in July totaling 60.6K, and 3) increases of GBP 0.6 billion in consumer credit and GBP 1.3 billion in net lending to individuals last month.  Finally, U.K. consumer confidence improved three points to a reading of minus 13 in August, according to the GFK gauge.

German retail sales volume slumped 1.4% in July after declining 0.8% in June.  Sales were 1.7% below the 2Q mean but 2.3% higher than in July 2012.  Spanish retail sales were 2.0% weaker than a year earlier in July.  Norwegian retail sales fell 1.3% on month and rose by a lessening 1.0% on year.

The KOF index of Swiss leading economic indicators rose 1.1 points to 1.36 in August.

Italian CPI inflation edged down 0.1 of a percentage point to 1.1% in July.  Italy’s jobless rate also eased 0.1 ppt to 12.0% that month.

Portuguese retail sales and industrial output each posted on-year decreases of 2.3% last month.

Building permits in New Zealand underperformed expectations in July, dropping 0.8%.  On-year M3 money growth slowed to 4.9% in the same month.  Private credit in Australia increased 0.4% in July and by 3.2% from a year earlier.  South African M3 money and private-sector credit each recorded smaller-than-forecast on-year advances of 7.4% in July.

China’s business sentiment index increased 3.7 points in August to 58.0, corroborating other signs that a slower rate of growth is stabilizing rather than intensifying.  South Korea reported better-than-expected on-year growth in industrial production of 0.9% and retail sales of 1.1% in July.

Scheduled U.S. data today include personal income and spending, the Chicago and Milwaukee regional PMI reports, and the U. Michigan/Reuters gauge of consumer sentiment.  Canada will be releasing monthly and quarterly GDP.  Brazilian and Indian GDP numbers are due, too.

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

Tags: , , ,


Comments are closed.