Euro a bit Lower Despite Positive German Data
January 8, 2014
The dollar climbed overnight by 0.3% against the loonie, 0.2% versus the euro, Swiss franc and yen and 0.1% relative to the kiwi. Sterling is 0.1% stronger, and the yuan and Aussie dollar are unchanged against the greenback.
The Nikkei rebounded 1.9%, helped by a softer yen. In other markets around the Pacific Rim, stocks rose 1.3% in Hong Kong, 1.0% in Singapore, 0.6% in Indonesia, 0.5% in Taiwan, 0.4% in New Zealand and 0.2% in China. South Korean and Australian equities closed unchanged, and European markets are lower with losses of 0.4% in London, 0.3% in Milan and 0.2% in Frankfurt, Paris and Madrid.
The 10-year Japanese JGB and German bund yields rose by two and one basis points, respectively, while the 10-year British gilt is steady.
Gold fell 0.3% to $1225.70 per ounce. WTI oil edged up 0.1% to $93.75 per barrel.
German industrial orders rebounded 2.1% in November, reversing a 2.1% drop in October. The 12-month rate of increase improved to 6.8% from 2.0% in the year to October. Orders in October-November were 0.8% greater than the average 3Q level. Domestic orders for capital goods, a leading indicator of business investment, advanced 2.7% in the latest month but were lower in October-November than in the third quarter.
Germany’s current account surplus widened to EUR 21.6 billion in November from EUR 18.8 billion in October and EUR 17.8 billion in November 2012. The seasonally adjusted merchandise trade surplus of EUR 17.8 billion was 6.6% wider than October’s surplus and 7.9% bigger than the 3Q average surplus. Between October and November, exports went up 0.3%, while imports fell by 1.1%.
Retail sales volume in the euro area jumped 1.4% in November, easily beating analyst expectations, but their 12-month rate of increase was only 1.6%. Also, October-November sales were unchanged from the 3Q average.
Euroland’s unemployment rate remained at 12.1% in December, the same level as in the prior three months and 0.3 percentage points above the November 2012 level. Although GDP growth has resumed, the labor market has only plateaued at a very high level.
The British Halifax house price index was much softer than forecast, registering a 0.6% month-on-month decline last month and an increase of 7.5% between the final quarters of 2012 and 2013. British shop prices fell 0.8% between end-2012 and end-2013 according to the British Retail Consortium.
Irish retail sales stagnated in November and recorded an on-year advance of 1.7%. That was better than October’s result. In the year to November, retail sales were unchanged in Romania and up 4.9% in Hungary.
Turkish industrial production advanced 2.9% in November and 4.7% from a year earlier. Hungarian industrial output grew 5.8% between November 2012 and November 2013. Brazilian industrial production, in contrast, was only 0.4% greater in November than a year before. And Norwegian industrial production posted a 12-month 2.2% decline in the same month.
The Australian construction purchasing managers index fell back to a near-50 score of 50.8 last month after readings of 54.4 in October and 55.2 in November. The index had been in the 40s during the third quarter and in the 30s in the second quarter.
Central banks in Romania and Poland will announce interest rate decisions today, but the main central banking event will be the release by the FOMC at 19:00 GMT of minutes from its December 17-18 meeting, which resulted in the first tapering of QE3. The ADP estimate of U.S. private employment growth in December is also awaited by investors.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euro, Euroland retail sales, German currrent account, German industrial orders