Japan’s Tankan, Many PMI Readings and More Protests in Hong Kong
October 1, 2014
The dollar extended its impressive rally, climbing 0.6% against the Australian dollar, 0.4% versus the Swiss franc, 0.3% relative to the euro, 0.2% vis-a-vis the yen, and 0.1% against the kiwi and sterling. The dollar touched new lows for the move of JPY 110.10 and CAD 1.1225.
With Hong Kong street mobs in their sixth day, the Hang Seng index lost 1.3%. In other Pacific Rim stock markets, prices fell 1.4% in South Korea, 0.6% in Japan, and 0.4% in Singapore but rose 0.8% in Australia, 0.4% in New Zealand, and 0.3% in Taiwan.
Chinese markets are closed the rest of this week for the National Holiday observing the 65th anniversary of the Communist Revolution’s victory.
European share prices have fallen 0.4% in France and Britain and 0.1% in Italy. The German Dac and Spanish IBEX have traded up 0.2% and 0.3%, however.
The 10-year British gilt yield dropped three basis points, while 10-year Japanese JGB and German bund yields are unchanged.
Oil rose 0.5% to $91.61 per barrel. Gold fell 0.2% to $1,209.00 per ounce.
The Bank of Japan’s quarterly Tankan poll of corporate conditions and expectations was better than feared. The BOJ has been refraining from augmenting its policy stimulus, keeping that option open for only if and when officials become convinced that their inflation goal is not obtainable under the existing stance. The diffusion index for big manufacturers rose a point to +13, but the index for big non-manufacturing firms fell by six points to register +13 as well.
Euroland’s manufacturing purchasing managers index fell 0.4 points in September to a 14-month low of 50.3, which was also below the preliminary estimate of 50.5. Inflation readings were below the 50 level that separates rising from falling. Euro area manufacturing is virtually stagnant, and its weakness threatens other sectors of the economy.
- The French PMI rose 1.9 points to a 4-month high of 48.8. Jobs in manufacturing were shed at a slower rate than in August.
- Three more economies — Austria, Greece and, notably Germany — joined France in experiencing sub-50 scores. Germany’s 49.9 was 1.5 points weaker than the August reading and a 15-month low. Austria’s 47.9 was the lowest score in 17 months, and Greece’s 48.4 was an 11-month low and down from 50.1 the month before.
- Ireland again experienced the strongest pace of growth, but its reading of 55.7 was down from 57.3 and at a 2-month low.
- Spain scored a 52.6, down from 52.8 and a seven-month low.
- The Dutch reading of 52.2 followed a 13-month low of 51.7 in August but was still below July’s 53.5 reading.
- After dipping below 50 to a 14-month low of 49.8 in August, Italy’s PMI bounced up 0.9 points to a 2-month high of 50.7.
Among other European economies where PMI-manufacturing surveys were published,
- The British results were especially dismaying, as the index fell another 0.6 points to a 17-month low of 51.6. At midyear, such was 57.5.
- The Swiss PMI also hit a 17-month low of 50.4, down from 52.9 in August.
- The Swedish PMI reading of 53.4 lay between August’s 51.0 and July’s 55.2.
- Norway’s manufacturing PMI sank to a 15-month low of 49.4 from 51.8.
- Russia’s 50.4 reading after 51.0 in the prior two months underscores the fragility of that economy and its vulnerability to economic sanctions.
- Hungary’s PMI rose 1.6 points to 52.6 but still lay far below July’s 56.7 reading.
- The Czech 55.6 reading represents a 2-month high after August’s 11-month low of 54.3.
- Poland’s 49.5 in September was below 50 as were the readings in July and August, but it was 0.5 points better than in August.
Japan’s manufacturing PMI was 51.7, unrevised from the preliminary indication but below August’s 52.2 and connoting rather soft activity growth.
Australia’s Performance of Manufacturing index, 46.5, was at a 5-month low and 0.8 points lower than August’s level.
India saw the manufacturing PMI sink to a 9-month low of 51.0 from 52.4 in August and 53.0 in July. Output and orders grew more weakly, and input prices fell.
Indonesia’s 50.7 was a 2-month high following August’s one-year low of 49.5.
South Korea shot a 48.8, returning to sub-50 territory after a sole 50.3 reading in August. 48.8 represents a 3-month low.
Turkey’s 50.4, a 15-month low, highlights the difficulties felt by emerging economies as Fed policy transitions to a less accommodative stance.
Vietnam posted a 51.7 PMI score in September, a two-month high after 50.3 in August.
Last, but not least from Asia, the government-authorized CLIP PMI for China stayed barely above 50, remaining at 51.1 in September.
Japanese motor vehicle sales fell 2.8% on year in September, which was only about half as big a 12-month decline as the 5.0% drop in August.
Australian retail sales ticked up 0.1% in August, less than forecast, and the 12-month rate of rise slid to 5.0% from 5.2%.
The Bank of Iceland left its one-week collateralized lending rate unchanged at 6.0%, the level since a 25-basis point hike in November 2012.
South Korean consumer price inflation slowed to 1.1% in September, down from 1.4% in August, 1.6% in July and 1.7% at midyear. Price edged 0.1% lower from the month before.
Thai CPI inflation slowed to 1.8% in September from 2.1% in August. This news was accompanied by the PPI report that showed a 1.1% 12-month rate of decline. Indonesian CPI inflation edged down to 6.5% last month from 6.7% in August. Indonesia’s trade balance weakened by $350 million in August, swing to a deficit of $310 million that month.
Investors await the ADP estimate of U.S. private-sector employment growth in September. Other U.S. data releases today are the manufacturing PMI, construction spending, and motor vehicle sales.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Australian retail sales, manufacturing purchasing managers surveys
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