For a Monday, it’s Been Busy

December 9, 2013

Share prices in India rallied 1.6% on the opposition’s victory in state elections over the weekend.  In other Asia markets, stocks climbed 2.3% in Japan, 1.0% in South Korea, 0.9% in Taiwan and 0.8% in Malaysia and Indonesia.  Equities fell 0.8% in Australia and dipped 0.1% in China and the Philippines.  The Spanish IBEX and German Dax have risen 0.5% and 0.3%, while the Paris Cac and British Ftse are off by 0.3% and 0.1%.

Japanese real GDP growth in the third quarter was revised to an annualized 1.1% from 1.9% reported a month ago and to an on-year advance of 2.4% from 2.7%.  Non-residential investment was revised downward to no change versus 2Q.  Net exports exerted a 1.9 percentage point drag, and the boos from inventory building was halved to 0.7 percentage points.  However, personal consumption rose twice as fast as estimated initially, producing a 0.5 percentage point contribution to GDP growth.  The GDP price deflator fell 0.3% in the year to 3Q13, down from a 0.8% on-year drop over the previous four quarters.

China recorded a $33.8 billion trade surplus in November, largest since January 2009.  Analysts were anticipating a $21 billion surplus following a $33.1 billion surplus in October.  On-year export growth accelerated more than twofold to 12.7% in November from 5.6% in October.  Chinese consumer prices dipped 0.1% on month in November and were unchanged from September and up 3.0% on year, the smallest 12-month increase since August.  Producer prices were 1.4% lower than in November 2012.

Japan’s economy watchers index improved 1.7 points to a reading of 53.5 last month, but the outlook component only rose by 0.3 points.  Japanese bank lending grew 2.2% between November 2012 and November 2013.  While low, this was still a 4-year high and up from on-year growth of 2.0% in 3Q and 1.8% in 2Q.

Japan recorded a seasonally adjusted current account deficit for a second straight month.  The gap was JPY 59 billion in size, down from JPY 125 billion in September.  In non-seasonally adjusted terms, the trade deficit widened to JPY 1.092 trillion from JPY 451 billion in October 2012, and the current account swung to a JPY 128 billion deficit from a JPY 421 billion surplus a year earlier.  On-year import growth of 28.2% outpaced exports that gained 17.9%.  But seasonally adjusted exports went up 2.8% from September, whereas imports fell by 1.4%.

German industrial production fell 1.2% in October on top of a 0.7% decline in September and were only 1.0% higher than in October 2012.  The German current account surplus printed at EUR 19.1 billion in October, 23% wider than a year before.  Germans make no apologies for their gargantuan current account, decrying any thought of punishing success.  The trade surplus was EUR 16.8 billion seasonally adjusted, a shade larger than the 3Q average of EUR 16.5 billion.

German labor costs fell 0.3% in both 2Q and 3Q and posted an on-year 1.6% rise in the third quarter.  The secret to Germany’s chronic external surpluses is high price competitiveness imposed by extreme wage restraint.  This also constrains personal consumption and imports.

The Sentix gauge, a measure of investor sentiment toward the euro area, slid unexpectedly in December, falling 1.3 points to a score of 8.3.

The dollar touched two-year and four-month highs against the Korean won and Indian rupee but shows only slight overnight changes against its main rivals.  The U.S. currency is up 0.3% relative to the Aussie dollar, 0.2% vis-a-vis the kiwi and yen, and 0.1% relative to the loonie.  The greenback has edged down 0.3% against sterling, 0.2% relative to the euro and yuan, and 0.1% versus the Swiss franc.

The ten-year British gilt yield ticked a basis point higher, while the 10-year Japanese JGB is off a basis point.  The 10-year German bund is steady.

Gold and oil price changes have likewise been only marginal.

The Bank of France’s index of French business sentiment increased a point to 101 in November.

Ireland’s construction purchasing managers index settled back 0.6 points to a still-elevated 58.8 reading in November. 

Real GDP between 3Q12 and 3Q13 fell by 5.9% in Greece, 5.6% in Cyprus, and 1.0% in Portugal. 

Czech industrial production reversed September’s 1.5% drop with a 1.7% rebound in October.  Czech consumer prices were 1.1% above year-earlier levels last month.  Greek consumer prices fell by 2.9% in that period.  Turkish industrial production sank 3.1% in October, cutting the 12-month rate of increase to just 0.7%.

Swiss retail sales dipped 0.1% on month and rose just 1.2% on year in October.  Swiss unemployment last month totaled only 3.2%, matching expectations.  Denmark’s current account in October was DKK 18.4 billion, nearly 23% wider than in September. Finland’s trade shortfall imploded to EUR 25 million from almost EUR 0.5 billion in September.

Sri Lanka’s central bank left its key repo and reverse repo rates at 6.5% and 8.5%, matching the expectations of analysts.

Canadian housing starts fell 6K at an annualized rate in November to 192.2K.  No U.S. releases are scheduled.  The Northeast has been hit by its first wintry event of the year but surely not the last.

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

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