European Share Prices Significantly Lower… And Oil Off Another 1.3% to $59.10
December 12, 2014
Equities have fallen 1.6% in Paris, 1.4% in Madrid, Milan and Zurich, 1.5% in London and 1.2% in Frankfurt. Stocks closed down 0.9% in India, 0.3% in Hong Kong and 0.2% in Australia but rose 0.7% in Japan, 0.3% in China and South Korea, and 0.2% in New Zealand, Singapore and Taiwan.
Key sovereign debt yields extended their declines. For the week thus far, 10-year U.S. Treasuries and British gilts slid 17 basis points and German bunds dropped by a dozen basis points. The 10-year JGB yield is below 0.4% at 0.39% and two basis points below last week’s closing.
The dollar showed mixed overnight movement, dropping 0.3% against the euro and Swiss franc and 0.2% relative to the yen but firming 0.5% vis-a-vis the loonie, 0.3% against the kiwi and 0.1% versus sterling.
Comex gold is little changed at $1,223.30 per troy ounce.
Investors received some discouraging data.
A 7.2% on-year rise in Chinese industrial production for November was the second smallest advance in five years and down from 7.7% in the year to October. Only August’s 6.9% year-over-year rise was exceeded last month.
A 15.8% January-November rise from a year before in Chinese fixed asset investment was the smallest year-to-date advance since 2001.
Industrial production in the euro area rose only 0.1% in October after a 0.5% September gain. There were month-on-month declines in France and The Netherlands of 0.9%, in Spain of 0.4%, and in Italy of 0.1%. German output was unchanged.
British construction output dropped 2.2% in October versus an expected 0.7% increase.
All three measures of China’s money stock posted smaller-than-forecast year-on-year growth in November. M2 (12.3%) was down from 12.6% in October and a 2014 high of 14.7% in June.
New Zealand’s service-sector purchasing managers index fell 3.7 points to a 4-month low of 55.2 in November.
The 1.1% on-year decline in German wholesale prices in November was the greatest 12-month rate of drop since April. The WPI declined 0.7% from October.
Quarterly employment growth in the euro area of 0.2% in 3Q was marginally slower than in the second quarter.
Consumer prices posted month-on-month dips in November of 0.2% in Italy and 0.1% in Spain.
Britain’s index of leading economic indicators declined by 0.3% in October for a second straight month according to the Conference Board.
In Hong Kong, industrial production was 1.8% lower in 3Q than a year earlier. Producer prices were 1.3% higher on year.
Not all the news was bad. Chinese retail sales rose 11.7% on year last month after a 11.5% pace in October. This was the first improvement since May. New Zealand consumer sentiment rebounded 3.9% this month after back-to-back slides of 3.4% in October and 1.3% in November. Chinese bank lending in November of 1.15 trillion yuan was the biggest total since January and some 29% greater than forecast. Japan’s industrial production in October was revised to a gain of 0.4% from 0.2% reported initially (that still wasn’t enough to keep capacity from dipping 0.1%). The French current account deficit was smaller in October than September, and the Dutch trade surplus widened in October.
The Central Reserve Bank of Peru left its monetary policy interest rate unchanged at 3.5% as analysts were expecting but lowered reserve requirements. A released statement promised to implement extra easing measures if needed.
Scheduled U.S. data releases today involve producer prices and the Reuters/U. Michigan preliminary estimate of consumer sentiment. U.S. self-confidence continues to be shaken by street protests against police bias and the revelations of CIA-sponsored torture.
Japanese voters elect members of parliament’s lower chamber, which is the more powerful body of the legislature, on Sunday. The LDP is projected to secure a bigger seat advantage than it holds currently. The reason is the poor image of its political opponents. Confidence in Abenomics has eroded.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British construction output, Chinese economic data, Euroland industrial production
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