Boxing Day Observances Keep Markets Quiet

December 26, 2013

A mixed dollar shows gains of 0.3% against the yen and loonie, 0.2% versus the Swiss franc and kiwi and 0.1% relative to the yuan and euro but declines of 0.7% against sterling and 0.5% vis-a-vis Australian dollar.

Having climbed above 16,000 on Wednesday for the first time since December 2007, Japan’s Nikkei rose another 1.0% today.  Chinese share prices, by contrast, fell 1.7%.  Sino-Japanese frictions, already elevated, took a further turn for the worse after Japanese Prime Minister Abe fell victim to his nationalistic instincts and visited the Yasukuri war shrine on the 120th anniversary of Mao’s birth.

In the U.S. the DJIA and S&P 500 have thus far risen moderately further in the morning.  Many exchanges stayed closed for Boxing Day, especially in the British Commonwealth.

The 10-year Treasury yield is a basis point higher at 2.99%.  Japan’s JGB climbed two basis points to 0.70%.

Gold and oil prices firmed 0.7% and 0.3% to $1,211.70 per ounce and $99.49 per barrel.

The Shoko Chukin index of Japanese small business sentiment remained steady at 51.1 in December after climbing 0.3 points in November and a full point in October.

Japanese housing starts recorded on-year growth of 14.1% in November, twice as much as in October and modestly faster than 13.5% in 3Q13.  Construction orders posted a 12-month gain of only 2.2% after a 61.1% surge between October 2012 and October 2013. 

Minutes from the Bank of Japan Board’s policy meeting on November 20-21 revealed skepticism among a few policymakers that Japan’s economy will continue to grow sufficiently to achieve 2.0% sustained CPI inflation by March 2015.  One worry was a big 0.7 percentage point contribution to third quarter growth at the same time that final demand growth slowed abruptly.  The inventory run-up was apparently unintentional.  Another worry surrounds the upcoming three percentage point sales tax hike in April, and a third is the persistence of deflationary expectations.

Taiwan’s central bank conducted a quarterly monetary policy review and decided to leave the 1.875% interest rate unchanged for another three months.  It’s been at that level since June 2011.

Industrial production in Singapore dropped 2.8% on month in November, halving the 12-month rate of increase to 4.0%. 

South Korean consumer sentiment stayed at a reading of 107 in December.  It was pretty stable over the entire second half of 2013 aside from a brief drop to 102 in September.  Turkish consumer confidence dropped 2.5 points in December to a reading of 75.

New U.S. jobless insurance claims last week of 338K were 42K lower than in the week of December 14.  The 4-week average of 348K was 15K higher than in the prior four weeks to November 23.

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

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