Setback Extended in Share Prices
December 9, 2014
Monday’s slide in equities continued overnight in Europe and Asia. Stocks slumped 4.5% in China, 2.3% in Hong Kong, 1.7% in Australia, 1.2% in India and 0.7% in Japan. Equities are so far down 1.5% in Spain, 1.4% in Italy, 1.2% in France, 1.1% in Britain and 0.9% in Germany.
Also consistent with the risk off wave, the 10-year British gilt and Japanese JGB yields have fallen by 3 basis points and 2 basis points.
The dollar is moderately lower on the day but not enough to challenge the underlying trend of improvement. The dollar lost 0.5% against the yen overnight, dipping marginally under 120.0, and has lost 0.3% versus the euro and Swissie. There have also been dips of 0.1% vis-a-vis the loonie and kiwi. The Aussie dollar touched 0.8224 per USD overnight but now shows only a net 0.1% downtick against its U.S. counterpart. Sterling also is 0.1% softer.
The Chinese yuan was fixed at a nine-month high.
WTI oil, which fell on Monday to a 5-1/3 year low of $63.05 per barrel, has rebounded 1.5% today, and Comex gold is up 0.9% on the day.
The German current account surplus of EUR 23.1 billion in October was almost as great as September’s EUR 23.7 billion and easily exceeded the monthly average of EUR 15.8 billion over the first eight months of this year. Seasonally adjusted imports fell 3.1% on month, six times faster than the 0.5% drop in exports. The merchandise trade deficit of EUR 21.9 billion in October was 23% wider than a year earlier, and its seasonally adjusted value of EUR 20.6 billion compares to monthly averages of EUR 19.4 billion in the third quarter, EUR 17.5 billion in 2Q, and EUR 16.0 billion in 1Q.
German labor costs rose just 0.2% last quarter but were 2.3% greater than in the third quarter of 2013, thanks to a 3.4% advance in non-wage labor costs over the 4-quarter period.
British industrial production data fell well short of forecasts, dipping 0.1% on month in October and rising just 1.1% on year. Factory output slumped 0.7% between September and October, trimming its 12-month increase to 1.7% from 2.2%. British same-store sales were 0.9% higher than a year earlier in November.
The French trade deficit of EUR 4.6 billion in October was very similar to its EUR 4.7 billion size in September, as imports stagnated.
Greek consumer prices fell 1.2% in the year to November. Cypriot consumer prices were unchanged over the same span of time.
Swiss joblessness held steady at a seasonally adjusted 3.1% in November.
Japanese on-year growth in M2 money of 3.6% in November constituted a nine-month high. Broad liquidity growth of 3.3% was the same as in October.
On-year growth in Japanese machine tool orders accelerated to 36.6% last month from 30.8% in October.
The National Australia Bank’s monthly survey of business confidence in that economy revealed a 16-month low, with a reading of just +1, and the companion index of business conditions dropped 8 points to +5.
Factory output in South Africa was weaker than forecast in October, rising 0.5% on month and 2.2% on year.
The National Federation of Independent Business reported an unexpectedly large 2.0-point rise in U.S. small business sentiment last month to 98.1, highest since February 2007. The average reading in January-October had been 95.1. Other U.S. data being released today are the Labor Department’s JOLTS index of job hires and separations, the IBD/TIPP optimism index, and weekly chain store sales. Mexican consumer and producer prices arrive, too.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British industrial production, German current account, Japanese money growth
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