A Mixed Bag of Data Leaves Dollar Little Changed
July 8, 2014
The dollar edged up 0.1% against the euro and Swiss franc but has slipped by 0.3% versus the Australian and New Zealand dollars, 0.2% vis-a-vis the yen and 0.1% relative to the loonie. Sterling and the yuan are steady.
Stocks are mostly lower, with drops of 2.0% in India, 1.2% in Italy, 0.7% in Spain, 0.6% in Britain and 0.4% in Japan, Germany and France.
The ten-year British gilt yield is four basis points lower. The 10-year Japanese JGB dipped a basis point, while the 10-year German bund drifted up a basis point.
Gold firmed 0.3% to $1,320.90 per ounce. Oil is 0.1% higher at $103.39 per barrel.
A 0.7% drop in British industrial production in May confounded expectations of a slight uptick. Such was the largest monthly decline in 16 months, somewhat tempering speculation about a Bank of England rate hike this year and resulting in a 2.3% 12-month rate of increase.
The French trade deficit in May of EUR 4.9 billion was 0.8 billion euros wider than in April and surpassed expectations by around 15%. The Bank of France’s manufacturing and service-sector business sentiment indices printed at the same levels in June as in May, respectively 97 and 93. French monetary officials project that GDP advanced 0.2% last quarter.
Bank loans in Japan were 2.3% greater in June than a year earlier. That followed a 2.2% rise in May. On-year lending growth in 2Q, 2.2%, was unchanged from the pace recorded in the first quarter, however.
Japan’s JPY 523 billion unadjusted current account surplus in May was the fourth black-ink figure in a row but 7.8% smaller than the May 2013 surplus. On a seasonally adjusted basis, the current account nearly tripled to JPY 385 billion from JPY 131 billion in April. Merchandise exports went up 1.5% on month, while imports slumped 2.9%.
Japan’s customs clearance trade deficit in the first twenty days of June of JPY 802 billion was twice the size of a year ago and embodied a 10.3% jump in imports that eclipsed a mere 1.1% rise in exports.
Japan’s economy watchers current index rose to 47.7 in June from 45.1 in May and 41.6 in April (when the sales tax was hiked). The index before then had been at 57.9 and has now recorded three straight sub-50 readings. June’s reading was not as high as forecast. The economy watchers outlook index slipped a half-point to 53.3 and likewise fell short of expectations as well.
Deputy Bank of Japan Governor Nakaso called talk about an exit from quantitative easing premature and reassured that the tools exist to mop of liquidity afterward.
U.S. small business sentiment fell to a 3-month low of 95.0 in June from 96.6 in May and 95.2 in April.
The German unadjusted current account surplus of EUR 13.3 billion in May was 3.9% wider than a year earlier. The seasonally adjusted merchandise trade surplus of EUR 18.7 billion was wider than April’s EUR 17.2 billion and monthly averages of EUR 16.0 billion in the first quarter and EUR 16.6 billion in full-2013. Between April and May, exports fell 1.1%, but imports fell at a more sharply rate of 3.4%.
Australian business confidence posted a June reading of +8, best since January, and the business conditions index of +2 was three points better than in May.
Business sentiment in New Zealand retrenched to a reading of 32 last quarter after one of 52 in 1Q, but the Fitch credit rating agency changed New Zealand’s credit rating outlook to positive from neutral. The kiwi got as strong overnight as USD 0.8808, breaking 88 cents for the first time in nearly three years.
Swiss consumer prices dipped 0.1% on month and were unchanged on year in June, falling a tad below analyst expectations. Swiss retail sales tumbled 1.0% on month and 0.6% on year in May, much worse than assumed.
The U.S. Labor Department reports the JOLTS index at 10:00 EDT. This is one of the esoteric “other” labor market indicators that Fed Chair Yellen as touted as a source of guidance for future policy decisions. Consumer credit figures also arrive today.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British industrial output, German current account, Japanese current account, Nakaso