End of August Brings a Ton of Released Data

August 29, 2014

The dollar is unchanged overnight against the euro, sterling and yuan.  The greenback gained 0.2% versus the yen and Australian dollar and 0.1% vis-a-vis the kiwi, while losing 0.2% to the loonie and 0.1% against the Swiss franc.

The price of gold has slid 0.3% to $1,286.0 per ounce despite additional military gains by pro-Russian rebel forces in Ukraine.  Norway’s government claims that Russian military planes crossed its airspace illegally.

WTI crude oil is 0.4% firmer at $94.94 per barrel.

In stock market action overnight, Japan’s Nikkei closed down 0.2% at 15,425.  Equities lost 0.9% in Indonesia, 0.4% in Taiwan and South Korea, 0.3% in New Zealand, and 0.1% in Singapore but rose 1.2% in China and were unchanged in Hong Kong and Australia.  Over in Europe, there have so far been gains of 0.8% in Italy, 0.3% in France and Germany, 0.2% in Britain, and 0.1% in Spain and Switzerland.

Ten-year sovereign debt yields rose by two basis points in Britain and a basis point in Japan but slid a basis point in Germany.

Japan released industrial production, auto output, consumer prices, retail sales, household spending and income, labor statistics, and housing information.

  • A 0.2% uptick in industrial production after June’s 3.4% tumble fell well below market expectations.  The inventory ratio dropped 2.3%, and industrial output was weaker than a year earlier for the first time in eleven months.
  • Motor vehicle output sank 1.7% on year in July, which compares poorly with gains of 6.6% in June and 6.1% in May.
  • The CPI report further confirmed that the former uptrend has stalled.  Seasonally adjusted consumer prices in Tokyo were unchanged in August for a third straight month.  Core national CPI inflation (excluding fresh food prices) held steady at 3.3%, which translates to about 1.25% after taking account of the direct effect of a sales tax hike to 8% from 5% in April.  The national CPI posted a seasonally adjusted 0.1% uptick in July from June despite a 0.4% advance in energy.
  • Retail sales fell 0.5% on month in July but were 0.5% higher than a year earlier.  Large-store sales were down 0.6% on year.
  • real household spending registered a 5.9% 12-month rate of decline in July, about twice as much as analysts were predicting.
  • Real household income fell 0.7% on month and by 6.2% on year.  Real disposable income dropped 5.2% between July 2013 and July 2014.
  • Japan’s jobless rate increased to 3.8% in July from 3.7% in June and 3.5% in May.  The job seekers to openings ratio failed to rise further in July, but employment was 0.7% greater than in July 2013.
  • Housing starts were below year-earlier levels in July (by 14.1%) for the fifth straight month.
  • Construction orders recorded a 24.4% on-year increase, however.

The encouraging 1.0% rise in German retail sales volume reported a month ago for June was followed by a disappointing 1.4% decline in July, whose level was 0.8% below the 2Q mean and only 0.7% higher than a year earlier.

CPI inflation in the euro area slid to a new low of 0.3% in August from 0.4% in July, 0.5% in June and 1.3% in August 2013.  A 2.0% on-year drop, twice that registered in July, was the principal factor.  Non-energy inflation ticked up 0.1 percentage points to 0.6%, and core inflation (excluding food and energy) rose to 0.9% from 0.8%.  Market players are hoping that the ECB takes steps toward quantitative easing at next Thursday’s monthly policy meeting.

Euroland’s jobless rate stayed at 11.5% in July.  It’s down just 0.4 percentage points over the past year, compared to a 1.1 percentage point drop in the U.S. jobless rate to 6.2% over the same period of time.

Italian GDP fell 0.2% in 2Q after a 0.1% decline in 1Q.  GDP was also 0.2% less than in the second quarter of 2013.  Italy’s had three recessions in six years.

Danish GDP dropped 0.3% last quarter and was 0.1% softer in year-on-year terms.

Czech and Polish GDP recorded on-year advances of 2.7% and 3.3% after increases of 2.9% and 3.5% in the year to 1Q.

Several countries reported producer price figures: Icelandic PPI slipped 0.8% on year in July; Greek producer prices fell by 0.3% on year; Malaysia’s PPI dipped 0.3% on month but rose 1.8% on year; producer prices in Cyprus declined by 2.0% from July 2013; French producer prices fell 0.3% on month and by 0.6% on year; Austria’s PPI registered a 0.8% 12-month slide; and producer prices in Singapore posted a 0.1% monthly dip and a 1.5% on-year decline.

Norwegian retail sales growth from a year earlier slowed to 3.1% in July from 4.3% in June as a result of a 1.5% monthly drop.  Greek retail sales were 3.8% stronger than a year earlier in June after a 3.8% drop in May.  Spanish retail sales fell 0.5% on year in July, breaking a streak of three consecutive on-year advances.

The Swiss index of leading economic indicators compiled by KOF advanced 1.6% in August to a reading of 99.5.

The British Nationwide house price index increased 0.8% in August and accelerated to a 12-month 11.0% pace from 10.6% in July.  But such had climbed 11.8% in the year to June.  Moreover, the Hometrack U.K. house price index decelerated to a 5.5% on-year advance from 5.8% the month before.

According to the GFK measure, British consumer confidence returned to a 9-year high in August after dropping from +1 in June to -2 in July.

In the year to July, Portuguese industrial production and retail sales went up 3.5% and 1.0%.

Italian consumer prices edged 0.2% higher in August and were 0.1% lower than a year before.  A previous downtrend in Italy’s double-digit jobless rate was interrupted in July when such rose 0.3 percentage points, but seasonally adjusted unemployment slid further to 12.5% from 12.6%.

South African M3 money and private credit increased by 6.9% and 9.8% between July 2013 and July 2014.

Australian M3 and private credit recorded on-year advances of 7.5% and 5.1% in July.  New Zealand M3 growth slowed 0.1 percentage point to 5.3% in July. 

Still to come on this busy day of data releases are U.S. personal income and consumption, Canadian 2Q GDP, the U.S. Milwaukee and Chicago PMIs for manufacturing, and an interest rate announcement by the Central Bank of Colombia where a 25-basis point rate increase has been predicted by analysts.

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

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