Interesting Data Results and More More Volatility

January 13, 2015

10-year sovereign bond prices and European share prices both rose, as did the dollar and price of gold.  But oil dropped below $45.

British CPI inflation halved in December to a 15-year low of 0.5%, seemingly pushing the onset of Bank of England tightening further into the future.

China recorded a $49.61 billion trade surplus last month.  A 2014 surplus of $382 billion embodied much lower two-way commercial traffic than Beijing officials had sought, but almost two-fifths of that deficit occurred in the final quarter of the year.  On-year export growth in December of 9.7% was twice as fast as seen in November, while imports (down by 2.4%) registered a second straight on-year decline.

Japan’s seasonally adjusted current account surplus of JPY 915 billion in November was the second in a row to surpass JPY 900 billion.  Merchandise exports jumped 5.1% on month, twice as much as the monthly gain in seasonally adjusted imports.  The unadjusted current account surplus of JPY 433 billion was three times greater than anticipated and contrasts with a JPY 597 billion deficit in the year-earlier month.  Exports and imports rose by 10.8% and 7.7% between November 2013 and November 2014.

Depressed by plunging mineral oil prices, German wholesale prices posted a 2.3% on-year drop in December after a decline of 1.1% in November.  This was the greatest drop of 2014 and caused the WPI to fall by 1.2% on average for the whole year versus a decline of 0.6% in 2013 and rises of 2.1% in 2012 and 5.8% in 2011.

San Francisco Fed President Williams and Atlanta Fed President Lockhart made dovish remarks overnight.

The 10-year Japanese JGB yield slid a basis point to a record low of 0.25%, while the 5-year yield touched zero for the first time.  The 10-year British gilt fell by three basis points, and the 10-year German bund dipped a basis point to 0.46%.

Share prices in Europe are up so far by 1.3% in France and  Spain, 1.2% in Germany and Italy, 0.9% in Switzerland and 0.6% in Britain.

In the Pacific Rim, the Japanese market reopened after yesterday’s holiday with a 0.6% decline.  There were also declines of 0.6% in Indian share prices, 0.3% in Australia and 0.2% in South Korea.  But markets rose 0.8% in Hong Kong, 0.6% in Taiwan, and 0.5% in New Zealand and Indonesia.  Chinese equities closed unchanged.

The dollar advanced 0.7% against the kiwi, 0.5% versus the euro and Swiss franc, 0.3% relative to the yen and 0.1% against the Australian dollar and sterling.  The loonie and yuan are steady.

WTI oil slumped by a further 2.7% to $44.84 per barrel.  Comex gold extended its recent rally by 0.5% to $1,238.50 per troy ounce.

In other price news released overnight,

  • British retail price inflation slowed to 1.6% in December from 2.0% in November and 2.3% in October.  Excluding mortgage interest payments, the so-called RPIX index dropped to 1.7% from 2.0%.
  • U.K. producer output prices dipped 0.3% on month and 0.8% on year in December.  Producer input prices plunged 2.4% on month and 10.7% on year.
  • Swedish consumer prices unexpectedly rose by 0.2% last month.  Hence, the 12-month drop of 0.3% was only half as much as forecast.  Core CPI climbed to 0.5%.  It will take more than a single upside surprise to lead monetary officials away from their current attack against the risk of deflation.
  • Greek consumer price deflation accelerated from minus 1.2% in the year to November to a 13-month high of minus 2.6% in December.
  • The British DCLG house price index edged 0.2% higher on month in November but showed a slightly smaller 10.0% on-year pace after 10.4% in November.
  • Romanian consumer prices rose 1.1% on year in December, down from 1.3% in November.
  • Portuguese consumer prices were steady on month and down 0.4% on year last month.

Euroland’s current account surplus-to-GDP ratio increased to 2.6% in the third quarter of 2014 from 2.3% in the second quarter and 1.9% in 3Q13.

British same-store sales fell 0.4% on year in December after an on-year 0.9% rise in November, according to the British Retail Consortium.

Italian industrial production was 1.8% lower in November than a year earlier.  That was a smaller-than-forecast decline.  Output rose 0.3% from October.

Turkey’s current account deficit of $5.64 billion in November was almost three times the size of October’s deficit.  The Czech current account unexpectedly swung into deficit in November to the tune of CZK 6.7 billion.

Bank lending in Japan grew 2.5% on year in the fourth quarter of 2014, up from a pace of 2.2% in the year’s middle two quarters.  Japanese bankruptcies sank 8.5% on year in December, which was about half as much as the November-on-November drop of 14.6%.  Japan’s economy watchers index, a gauge of the perceptions of workers close to the retail sector, improved to a 3-month high of 45.2 last month from 41.5 in November.

Japanese customs clearance data for the first twenty days of December reveal a JPY 947 billion trade deficit, 31.6% narrower than a year before.  Compared to a year earlier, exports soared 13.4%, while imports went up just 1.8%.

A trio of U.S. indicators with a rising market following get released today: the JOLTS index of job hirings and separations, the NFIB small business confidence index, and the IBD/TIPP optimism index.  The December federal budget numbers arrive, too.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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