Quiet Friday the Thirteenth

December 13, 2013

The yen touched 103.94 per dollar overnight, its weakest value against the dollar since October 2008, and also hit a 5-year low of 142.85 per euro.  On net, however, the dollar is up only 0.2% against the Japanese currency.  Yen softness was fanned by heightened speculation that the Bank of Japan will be soon ramping up its stimulus.  The press this week was full of stories about fading confidence in Abenomics and a sustained Japanese recovery.

The dollar also has risen 0.2% against the euro, Swiss franc, and Australian and Canadian dollars.  Bigger gains have been scored versus sterling of 0.5% and the kiwi of 0.4%, but the yuan is steady.

Share prices fell 1.0% in India, 0.9% in Indonesia, 0.3% in South Korea and 0.1% in China but rose 0.7% in Australia, 0.4% in Japan and Malaysia, and 0.2% in Taiwan and New Zealand.  In European trading thus far, stocks have risen by 0.6% in Spain, 0.5% in Italy, 0.4% in France, 0.3% in Germany and 0.2% in Britain.

The 10-year Japanese JGB yield climbed three basis points to 0.68%, while 10-year German bund and British gilts are unchanged.

WTI crude oil firmed 0.4% to $97.09 per barrel, and gold edged 0.1% higher to $1225.50 per troy ounce.

The central banks of Chile and Peru left their reference interest rates unchanged at 4.5% and 4.0% as expected.  Russia’s central bank likewise did not change its one-week auction rate.  In none of these cases was a policy change predicted.

Japanese industrial production growth in October was doubled in revision to an increase of 1.0% on top of September’s 1.3% advance.  October’s output level exceeded the 3Q mean by 1.6% and the October 2012 level by 5.4%.  Japan’s inventory ratio fell 3.7% and 9.9% from a year earlier.  Industrial capacity went up 1.2% on month and 1.7% on year, while capacity use rose 0.4% on month but fell 1.2% on year.

New Zealand’s business purchasing managers index in November rose 0.8 points to a 3-year high of 56.7 from an upwardly revised October reading.  New Zealand consumer sentiment improved 0.8% in December.  The Reserve Bank of New Zealand issued a more hawkish policy statement earlier this week.

Retail sales in Singapore printed significantly weaker than forecast for the month of October, dropping 3.2% from September and 9.4% from a year ago.  South Korea’s index of leading economic indicators jumped 1.6% in October.

Lawmakers in the U.S. House of Representatives endorsed the two-year budget deal by a vote of 332 to 94, with 62 Republicans and 32 Democrats voting against the motion.

Australian central bank Governor Stevens said a USD 0.85 per Aussie dollar level would be more appropriate than the current level.

In the euro area, jobs stagnated last quarter and were 0.8% below the level in 3Q12. 

German wholesale prices in November fell for the eighth time in nine months, dropping 0.2% from October and 2.2% on year.  Mineral fuel prices sank 2.0% on month and 7.1% on year.

The Swiss PPI/import price index dipped 0.1% in November and was 0.4% lower than a year before.  Domestic producer prices slid 0.1% on month and 0.2% on year.  Greek import prices tumbled 1.1% on month in October and were 2.7% below a year earlier. 

Spanish consumer prices in November rose 0.2% both on month and on year. Finnish consumer prices edged 0.1% lower but accelerated in year-over-year terms to 1.4% from 1.2% in October.  Finnish retail sales were 0.8% greater than a year earlier in October, and Finland’s current account swung to a EUR 224 million surplus from a deficit of EUR 89 million the month before.  The Dutch trade surplus widened 23% on month to EUR 4.19 billion in October.  The Irish trade surplus, in contrast, narrowed 7.5% to EUR 2.97 billion. 

U.S. producer prices get released at 13:30 GMT today.

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

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