Return from Summer Holiday

September 3, 2013

The U.S. and Canada will be returning after Labor Day holidays on Monday.  New Middle Eastern jitters were aroused after alleged ballistic missile test by Israel.

The Aussie dollar advanced 0.7% against its U.S. counterpart after the Reserve Bank of Australia released a statement that failed to talk about scope for further easing. Australia’s Official Cash Rate was left at 2.5% as expected.  In other Aussie news, retail sales ticked up a mere 0.1% in July following no change in June and a 0.2% increase in May.  The current account deficit widened last quarter to a larger-than-expected A$ 9.35 billion from A$ 8.74 billion in the first quarter.  A general parliamentary election is set for this Saturday in which opinion polls suggest Prime Minister Rudd is likely to be unseated by his Conservative opponent, Abbott.

Other parliamentary elections this month will be held in Norway on the 9th and Germany on the 22nd.

Japan’s Nikkei rallied 3.0%, while India’s stock market sank 3.5%.  Gains elsewhere amounted to 1.5% in China and Indonesia, 1.0% in Hong Kong, 0.5% in South Korea, and 0.2% in Australia and New Zealand.  In Europe, the Spanish IBEX is 0.4% stronger, but the German Dax has eased 0.2%.  The Paris Cac and British Ftse have edged 0.1% lower.

The 10-year German bund yield slid a basis point, while Japanese JGBs an British gilts are steady.

Gold and oil prices dipped 0.2% to $1393.10 per ounce and $107.30 per barrel.

The dollar shows gains of 0.3% against the euro and 0.2% versus the yen and Swiss franc but has slipped by 0.1% against the loonie and sterling.  The kiwi and yuan are steady against the dollar.  In overnight trading, the yen got as low as 99.72 per dollar and 131.51 per euro.

The Bank of Japan’s balance sheet totaled JPY 205.7 trillion at end-August, JPY 8.9 trillion bigger on the month and 11.6% greater than three months earlier.  Japan’s monetary base (MB) grew 42% from August 2012 to August 2013, accelerating from on-year paces of 38% in July, 30.2% in 2Q, 15.2% in 1Q and 7% in 2012.  Doubling the MB is a keystone of the Kuroda monetary policy.  Japanese labor cash earnings grew 0.4% in the year to July, a tad less than expected and lower than June’s on-year increase of 0.6%.

Verizon bought Vodafone’s share of it, and Microsoft will purchase Nokia’s mobile device business.

More purchasing managers survey results were reported.

  • China’s government-authorized CFLP services PMI dipped to 53.9 in August, down from 54.1 in July and matching the reading in June. The measure has been above the 50 no change threshold each month so far of 2013.
  • Britain’s construction PMI jumped 2.1 points to 59.1 in August, highest since September 2007.  As recently as April, such had been under 50 at 49.4.
  • The Vietnamese manufacturing PMI rose 0.9 points to a 4-month high of 49.4 in August.  June’s low was at 46.4.
  • The non-oil Egyptian PMI rebounded 0.5 points but remained extremely depressed at 42.2 in August, well below the first-half average score of 46.0.
  • Saudi Arabia’s non-oil PMI improved to a 4-month high of 57.4 from 56.6 in July and June.
  • The non-oil PMI in the United Arab Emirates, which has exceeded 50 since September 2009, stayed at 54.5, a six-month high.

Producer prices in the euro area climbed 0.3% in July, as energy jumped by 0.8% and all other producer prices stayed collectively unchanged.  The PPI was 0.2% above its year-earlier level and, likewise, 0.2% above the 2Q13 mean.

Swiss GDP growth of 0.5% on quarter in 2Q beat analyst forecast.  GDP was 2.5% greater than in 2Q12.

Czech GDP grew 0.6% in the second quarter but remained 1.3% lower than a year earlier.

Turkish PPI inflation slowed 0.2 percentage points to 6.4% last month, while CPI inflation dropped back to 8.2% from a 10-month high of 8.9% in July.  Romanian PPI inflation slowed in July to 1.6% from 2.8% in June.

Scheduled U.S. data to be released today include the August manufacturing purchasing managers index, construction spending, and the IBD/TIPP Optimism index.

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

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