Awaiting Several U.S. Data Releases Today Before the Xmas Break

December 23, 2014

The U.S. data release calendar today encompasses the final estimate of 3Q GDP plus monthly personal income and spending, durable goods orders, new home prices, the FHFA house price index, the Richmond Fed manufacturing index, and the Reuters/U. Michigan consumer sentiment index.  Weekly chain store sales also get reported.

In the meantime, the release of revised British GDP last quarter and its current account in that period fell short of expectations.  The quarter-on-quarter growth rate stayed at 0.7%, but the on-year rise of GDP was revised downward by 0.4 percentage points to 2.6%.  In related separate reports, capital investment sank 1.4% on quarter and posted a significantly smaller on-year advance of 5.2%.  The monthly index of British service sector activity went up 0.3% in October and 3.4% on year.  Services in August-October were 3.2% greater than a year before.  Finally, a record high GBP 27.01 billion current account deficit was posted, equivalent to a whopping 6.0% of GDP.  That’s up from 5.5% of GDP in the 2Q deficit. 

French revised 3Q GDP matched the preliminary finding.  Real GDP grew 0.3%, entirely on a bigger rise of inventories.  Domestic final demand enhanced the quarterly growth rate by 0.2 percentage points, but net exports exerted a 0.2 percentage point drag, canceling the boost from personal consumption and government spending.  In other French reports, debt equaled 95.2% of GDP last quarter, producer prices slumped 2.0% on year in November, 0.8 percentage points more than forecast, and consumer spending, though up 0.4% on month in November, registered a larger 1.1% 12-month rate of decline.

Japanese markets were closed today for the Emperor’s Birthday holiday.  They will be open the rest of this week, however.

New Zealand’s trade deficit of NZD 213 million in November was significantly below October’s 908 million New Zealand dollar deficit.  This was the fifth straight deficit.

The dollar rose 0.2% overnight against sterling and 0.1% relative to the Chinese yuan.  The greenback is down 0.3% versus the kiwi and 0.1% against the loonie, Swissie, and Australian dollar.  The yen and euro are unchanged against the U.S. currency.

Stocks fell by 2.1% in China, 1.1% in Australia, 0.7% in India, and 0.3% in Hong Kong.  Regulators are looking into allegations that China’s stock market has been manipulated.  Not all Asian markets fell overnight, including a 0.3% gain in Indonesia, and the weakness did not extend into European trading where so far equities are up 0.7% in France, 0.5% in Italy, 0.4% in Switzerland and Britain, 0.3% in Spain and 0.2% in Germany.

The ten-year British gilt yield fell two basis points, but the comparable German bund is steady.

West Texas Intermediate oil prices rebounded 1.3% to $55.96 per barrel.  Lately, such has been higher at the U.S. open but then fallen during North American trading.  Gold is little changed at $1,178.60 per ounce.

A second of three Greek parliamentary votes on Prime Minister Samaras’ favored candidate for the position of president failed to get the necessary support.  The third and final vote, scheduled for December 29, most go Samaras’ way, or a general election will ensue that, it is feared, will install a different and much more euro-hostile government in power.

The Conference Board’s index of Chinese leading economic indicators rose 0.9% last month, but the index of coincident economic indicators only edged up 0.1%.

Euroland’s index of leading economic indicators climbed 0.4% in November, while the index of coincident economic indicators stagnated.

The IMF predicts that substantially lower oil prices will lift global GDP growth incrementally by 0.3-0.7 percentage points in 2015.

Italian retail sales were unchanged in October and posted a 0.8% on-year decline.  Polish retail sales fell 0.2% in the year to November, while its jobless rate edged up 0.1 percentage points to 11.4% that month.

Several countries announced price data.  Spanish PPI deflation widened to 1.5% in November, the largest on-year drop since January of this year.  Finnish producer prices last month were 0.5% lower than a year earlier, but Hong Kong’s CPI was 5.1% higher.  Singapore consumer prices, more in keeping with global trends, were 0.3% lower in November than a year before, their first on-year drop since late 2009. Swedish PPI inflation slowed to 1.3% from 2.1%.  In Hungary, producer prices posted a 1.7% on-year drop last month.

The British Bankers Association reported only 36,717 mortgage applications in November, the lowest total since April 2013.

Danish real GDP growth of 0.4% on quarter and 0.9% on year in 3Q14 was a shade below forecast.  Norwegian unemployment of 3.8% in August-October was a tick higher than expected.

Besides the aforementioned slew of U.S. indicators to be released today, Canada reports October monthly GDP.

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

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