Markets Hardly React to Weak German Industrial Output Report

July 7, 2014

The dollar was unchanged overnight against the euro, Swiss franc, kiwi, Aussie dollar and yuan.  The greenback gained 0.2% versus sterling and 0.1% against the loonie but edged 0.1% lower relative to the yen.

European stocks opened the week marginally lower following good gains last week.  Japan’s Nikkei lost 0.4%.  Equities rose 0.5% in India but slid by 0.1% in New Zealand, Australia and China.

Ten-year Japanese JGB and German bund yields are unchanged.  The 10-year British gilt dipped a basis point.

Comex gold and WTI oil eased 0.5% to $1,313.90 per ounce and 0.1% to $103.90 per barrel.

German industrial production dropped 1.8% in May on top of loses of 0.8% in March and 0.3% in April.  Output of producer goods slumped 3.0%, while that of consumer goods fell by 3.5%.  Overall production posted the same on-year 1.3% advance as in April.

Czech industrial production declined 1.5% on month and recorded a much smaller 2.5% rise from a year earlier.  Danish, Norwegian and Spanish production also fell on month in May.

The Sentix measure of investor sentiment toward the euro area partly recovered to a score of 10.1 in July after falling to 8.5 in June from 12.8 in May and 14.1 in April.

Australia’s construction purchasing managers index improved to a 7-month high of 51.8 in June from 46.7 in May, 45.9 in April, and a recent low of 44.2 in February.  Job ads in Australia rebounded 4.3% last month from May’s 5.7% decline.

Branch managers at the Bank of Japan conducted their quarterly assessment of regional conditions, declaring all nine regions to be still in moderate recovery.  Investment picked up in four regions, and optimism was also expressed about consumer spending.

Japanese international reserves were unchanged last month after a gain of $1.01 billion in May.  Japan’s index of leading economic indicators slid in May to a reading of 105.7 from 106.5 in April.  The index of coincident economic indicators stayed at 111.1 and drew an assessment of “weakening” from officials.

Swiss unemployment remained at 3.2% last month.

The Bank of Canada will be reporting its quarterly business outlook survey results later today.  No U.S. data are due today.

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

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