Sterling Boosted by Robust U.K. Retail Sales Data

January 17, 2014

British retail sales leaped 2.6% on month in December, lifting the 12-month increase threefold to 5.3%.  Non-auto sales went up 2.8% from November and by 6.1% from a year earlier.

The Japanese cabinet upgraded its assessment of the economy to “recovering at a moderate pace” from December’s view that the “economy is on the way to recovering at a moderate pace.”  It was the most favorable assessment since 2008.  However, export demand poses a downside risk, and the upgraded view of consumption may prove temporary as there has been a dash to buy before a higher sales tax is imposed in April.

Japanese department store sales increased 1.7% on year in December including a 3.6% advance among stores in Tokyo.

But consumer confidence in Japan dipped to a two-month low of 41.3 in December from 42.5 in November and 45.4 in September.

Stock and bond transactions in Japan generated a 379 billion yen net capital outflow last week versus a net inflow of 608 billion yen the week before.

Ezone contruction output fell for a third straight month in November, dropping 0.6% after drops of 0.3% in September and 1.1% in October.  The 12-month rate of decline narrowed, however, to 1.7% from 2.3% in the year to October.

The dollar fell 0.6% against sterling overnight but shows appreciated value of 0.9% versus the kiwi, 0.3% against the Australian dollar, 0.2% relative to the Swiss franc and loonie, and 0.1% against the yen and euro.  The yuan edged 0.1% higher against the dollar.

Equities declined 1.5% in China, 1.0% in India, 0.7% in South Korea, 0.6% in New Zealand and 0.1% in Japan and Australia.  In Europe, in contrast, share prices are up 0.6% in Germany, 0.4% in Spain, 0.3% in Britain, and 0.2% in France and Italy.

The 10-year German bund and Japanese JGB yields are unchanged, while the 10-year British gilt has firmed a basis point.

WTI crude oil rose 0.6% to $94.49 per barrel.  Gold is up 0.1% at $1241.60 per ounce.

According to the Conference Board, Spain’s indices of leading and coincident economic indicators rose in November by 0.3% and 0.1%.

Chile’s central bank left its key interest rate unchanged at 4.5% as expected.

Retail sales in Cyprus posted a 5.3% 12-month rate of decline in September.  Dutch retail sales firmed 0.1% on month but fell 0.9% on year in November.

Swiss producer and import prices were unchanged in December and 0.4% lower than a year before.  Domestic producer prices posted a 0.2% on-year drop.

Icelandic consumer prices increased 3.7% between end-2012 and end-2013.

Arriving U.S. data today include industrial production, housing starts, the Reuters/U. Michigan consumer sentiment index, building permits and the Labor Department JOLTS index of hirings and firings. 

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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