Aussie Dollar Hammered by Chinese Data

September 15, 2014

The Australian dollar fell by 0.8% against its U.S. counterpart, which otherwise edged up 0.2% versus the euro and Swiss franc and 0.1% relative to the Chinese yuan and sterling but also slipped 0.1% vis-a-vis the yen, Canadian dollar and kiwi.

A lot of Australian exports go to China, which reported only a 6.9% year-over-year rise of industrial production in August, down from 9.0% in July and 8.8% in the first half of 2014.  The 6.9% increase was the smallest advance since the final month of 2008.  Meanwhile, retail sales growth slowed to a 4-month low of 11.9% from 12.2% in July, 12.4% in June and 12.5% in May.  Fixed asset investment in China advanced 16.5% in January-August, down from 17.3% in the first half of the year and 19.6% in full-2013.

Japanese markets were closed today, observing Respect for the Aged Day.  In other stock markets around the Pacific Rim, share prices fell by 1.0% in Australia , Singapore and Hong Kong, 0.9% in India and 0.3% in New Zealand and South Korea.  However, China’s market slid just 0.1%, and losses in Europe so far have been limited to 0.3% in Madrid, 0.2% in in Paris and London and 0.1% in Zurich.  The German Dax is up 0.1%.

The ten-year German bund is unchanged, and the 10-year British gilt yield has slipped one basis point.

Comex gold is 0.4% higher at $1,235.90 per troy ounce.  West Texas Intermediate oil has fallen 0.8% to $91.40 per barrel.

The released Interim Economic Assessment of the OECD lowered projected GDP growth for the United States to 2.1% this year followed by 3.1% in 2015, Euroland to 0.8% in 2014 and 1.1% in 2015, Japan to 0.8% in 2014 and 1.1% in 2015, and Britain to 3.1% this year.  Forecasts for China were left at 7.4% for 2014 and 7.3% next year.

The euro area’s EUR 12.2 billion seasonally adjusted trade surplus in July was the smallest so far in 2014.  Exports dipped 0.2% on month, while imports advanced by 0.9% on top of gains of 0.6% in June and 0.5% in May.  The unadjusted surplus in January-July of EUR 99.5 billion was 12.8% wider than that of EUR 89.2 billion in the first seven months of 2013.  Energy accounted for all of that improvement.

New Zealand’s Performance of Services index settled back to a 2-month low of 57.9 following readings of 58.4 in July and 54.7 in June.  That score still signifies pretty robust expansion.  New motor vehicle sales in Australia dropped 1.8% between July and August after a 1.5% decrease the month before.  Auto sales were also 3.5% smaller than a year earlier.

Wholesale price inflation in India continued to recede sharply in August, posting a 3.74% on-year increase after a July-over-July advance of 5.19%.  Both food and fuel price pressures diminished sharply in the latest reported month.

South Korean import prices recorded their sixth month-on-month decline in a row and were 9.9% lower than a year earlier.  Retail sales in Singapore slid 0.2% on month in July but registered a 5.5% increase compared to a year earlier.

The British Rightmove house price index accelerated to a 7.9% on-year advance this month from 5.3% in August and 6.5% in July.  Prices rose 0.9% on month.

Switzerland’s producer price/import price index dipped 0.2% in August and was 1.2% lower than in August 2013.

Norway’s trade surplus rose to NOK 22.86 billion last month from NOK 22.59 billion in July and NOK 17.8 billion in June.  The Dutch trade surplus narrowed 39% on month to EUR 2.7 billion in July.  Dutch retail sales were 0.7% higher than in July 2013.  Finnish CPI inflation accelerated to 1.1% in August from 0.8% in July, while Danish producer price inflation moved more deeply below zero, registering a 12-month 2.2% rate of decline.

Today’s sees some meaningful U.S. economic data releases — industrial production, capacity usage, and the Empire State manufacturing index — plus the arrival of Canadian existing home sales.

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

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