Lots of Monthend Data and a Likely U.S. Government Shutdown Tomorrow

September 30, 2013

Stocks were whacked overnight in Asia and Europe on prospects for a shutdown of the U.S. federal government.  Share prices plunged 3.0% in the Philippines, 2.4% in Indonesia, 2.1% in Japan, 1.8% in India, 1.7% in Australia, 1.5% in Hong Kong, 1.3% in Singapore, and 1.0% in New Zealand.  Losses thus far in Europe amount to 1.9% in Italy whose political crisis has intensified as well as 1.2% in Spain, 1.3% in France, 1.1% in Germany, and 0.9% in Great Britain.

The yen is 0.5% stronger against the dollar, which otherwise sows gains of 0.2% vis-a-vis the euro and 0.1% against the kiwi, loonie, and yuan, a dip of 0.1% relative to the Swiss franc, and no change versus the Aussie dollar or sterling.

Gold is 0.2% firmer at $1341.60 per ounce.  The price of WTI crude oil fell 1.4% to $101.44 per barrel.

The ten-year British gilt and German bund yields are two basis points lower.  The 10-year Japanese JGB edged up a basis point to 0.68%.

A confidence vote looms in the Italian parliament after supporters of former Italian Prime Minister Berlusconi withdrew from the government’s ruling coalition in Italy.  There’s fear that a U.S. fiscal shutdown could be prolonged and make a default more likely later in October.

China’s HSBC manufacturing purchasing managers index was revised a whole point lower from its preliminary indication to a reading of 50.2 in September.  The 3Q average was 49.7, similar to the 2Q mean of 49.3.  China will be closed the rest of this week.

Japanese data released today showed

  • A slightly greater-than-expected 0.7% decline of industrial production in August.  Although the second drop in three months, July-August combined output was 1.5% greater than the 2Q mean, and officials predict strong gains of 5.2% in September followed by 2.6% in October.
  • A fractional further rise in the manufacturing PMI to a 33-month high of 52.5 in September after 52.2 in August.  The reading of 45.0 last December was a 44-month low.
  • Growth in retail sales of 0.9% between July and August and 1.1% from August 2012.  Large-store sales were 0.1% softer than a year before.
  • A somewhat smaller 7.6% drop in motor vehicle production between September 2012 and September 2013 following a 12-month decline of 9.5% in July.
  • Reduced on-year growth of 8.8% in housing starts in August after 12-month increases of 15.3% in June and 12.4% in July.
  • But a bigger 12-month jump in construction orders following a climb of 13.7% in the twelve months to July.

In Australia, where the central bank is expected to retain a 2.5% official cash rate tomorrow, expected inflation over the coming year remained at a 5-month low of 2.1% according to a measure compiled by MI-TD.  Private credit growth accelerated to a 12-month increase of 3.4% in August from 3.2% in July.

New Zealand M3 money growth also picked up last month, accelerating to 6.5% from 5.2% in July.  Business sentiment in New Zealand printed sharply higher at 54.1 in September after a 48.1 reading in August.

South Korean business sentiment rose five points to score of 82 this month.  South Korean industrial production increased 1.8% in June-August from the prior three months and was 3.3% greater than a year earlier.

German retail sales volume firmed 0.5% in August, the first increase in three months.  August sales were just 0.3% greater than a year earlier, and combined July-August sales were 0.3% softer than the 2Q average.

Consumer price inflation in the euro area slowed to 1.1% in September from 1.3% in August 1.6% in July and 2.6% in September 2012.  Core inflation dipped to 1.0% from 1.1% in August and 1.5% a year earlier.  Energy prices dropped 0.9% in the last 12 months, a turnaround from their 9.1% advance in the year to September 2012.

Italian consumer price inflation slowed to 0.9% in September from 1.2% in August.  Italian producer prices dropped by a larger 2.0% in the twelve months to August.  Dutch and French producer prices were 2.2% and 0.4% lower in September than a year before.    In Hungary, the PPI accelerated to a 2.4% on-year pace in August.

In the year to August, Portuguese industrial production advanced 0.6%, whereas retail sales dipped 0.1%.  Greek retail sales were 14% lower than a year earlier in July.

The Bank of England reported a 2.1% on-year rise of M4 money in August.  Mortgage approvals rose to 62.2K from 60.9K in July and 58.2K in June. 

Switzerland recorded a 6.8% wider CHF 20.5 billion current account surplus in 2Q. 

Turkey’s trade deficit of $7.0 billion in August was 16% lower than forecast and down from $9.8 billion in July.

South African M3 money growth slowed to 6.9% in August from 7.4% in July, but private credit grew more rapidly, advancing 8.2% after an on-year 7.4% increase.

U.S. data arrivals today include the mid-western regional PMIs and the Dallas Fed manufacturing index.  Canada reports producer prices and monthly GDP.

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

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