Aussie Labor Data Bummer

February 13, 2014

The Yellen senate testimony has been postponed as the U.S. faces another snow day.

Australia’s jobless rate rose 0.2 percentage points to 6.0%, highest in slightly more than a decade and 0.6 percentage points greater than in January 2013.  This increase was accompanied by an equally unexpected 3.7K decline in jobs (analysts were predicting a 25K rebound from December’s revised 23K drop).  Full-time workers fell by 39.2K combined in those consecutive months, and the participation rate slid to 64.5% from 64.6% in December.  The Aussie dollar 0.8% weaker against its U.S. counterpart and again below 90 cents.

Share prices are lower ahead of the release of U.S. retail sales, which are suspected to be weak.  Stocks in Japan plunged 265 points of 1.8%.  There were also drops of 1.3% in India and 0.5% in China, Hong Kong, Taiwan and South Korea.  Aussie equities are unchanged, but European share prices are down 1.1% in Italy, 1.0% in Spain, 0.8% in Britain, 0.6% in Switzerland, 0.5% in France and 0.3% in Germany.

The U.S. currency is unchanged against the loonie and yuan but down 0.7% relative to the Swiss franc, 0.5% against the euro and yen, 0.3% vis-a-vis the kiwi and 0.2% against sterling.

Ten-year sovereign debt yields dropped five basis points in Britain, two bps in Germany and a basis point to 0.59% in Japan.

Oil has again settled under $100 and is off 0.8% at $99.62 per barrel. Gold eased 0.3% to $1,292.00 per ounce.

Three central banks announced interest rate decisions.  No changes were made.

  • The Swedish Riksbank repo rate will continue to be at 0.75%.  Such was lowered by 25 bps at the prior meeting in December, when officials also pushed out the likely first rate hike from 2H14 to early 2015.
  • The BI rate of Bank Indonesia was kept at 7.5%.  Officials have resisted following recent hikes in other emerging markets but earlier had raised the key interest rate in five steps from 5.25%, the level between February 2012 and June 2013, to 7.5% by November 2013.
  • The Bank of Korea’s interest rate was left unchanged at 2.5%.  Such was last changed in May 2013, when a 25-bp cut was administered.  Korean inflation continues to run below the 1.5-3.5% target range.

Japanese domestic corporate goods prices ticked up 0.1% in January, recording a 12-month increase of 2.4% versus 2.5% in December and -0.4% in January 2013.  Export prices were 2.0% lower than in January 2013. 

The final German CPI report for January confirmed the flash estimates of a 0.6% drop on month and a marginally lower 1.3% 12-month increase.  Energy prices were 1.8% lower than a year before, while all other consumer prices collectively rose 1.5%.  The monthly decline was mostly seasonal, led by a 17.3% drop in the cost of package holidays.

Swiss producer and import prices were unchanged on month and down 0.3% on year in January.  The import component fell 0.6% on year, while domestic producer prices eased by 0.1%.

Expectations of Australian consumer price inflation held steady in January at 2.3%.

New Zealand’s business purchasing managers index slid to a 3-month low of 56.2 in January from 56.4 in December and 56.7 in November.

The Greek jobless rate continued to crest in November, reaching 28.0%, 0.3 percentage points above October’s level.  Sweden’s seasonally adjusted unemployment rate ticked up 0.2 percentage points to 8.2% in January and was at 8.6% unadjusted versus 8.4% a year earlier.

Dutch retail sales fell 3.0% in the year to December, including a collective 4.7% slump in non-food items.  Dutch CPI inflation slowed to 1.4% in January, lowest in 43 months. 

South African wholesale turnover growth accelerated to a three-month high of 6.6% in December.  There was a 1.4% rise between 3Q and 4Q.

The rise of Turkey’s current account deficit to $8.32 billion in December from $4.1 billion in November surpassed expectations and resulted in a full-2013 imbalance of $65 billion.

Brazilian retail sales disappointed in December with a monthly dip of 0.2% and a smaller-than-projected 4.0% 12-month rate of increase.

In addition to the aforementioned scheduled release of retail sales, U.S. business inventories and weekly jobless claims are also awaited.  We’ll have to see if these plans get delayed too by the winter storm barreling up the East Coast.  Canadian home price figures are due today as well.  Tomorrow features numerous European GDP reports, U.S. industrial production and import prices, and a slew of Chinese data.

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

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