Bunch of CPI and Industrial Output Data Released

February 10, 2015

The dollar was narrowly mixed overnight, with gains of 0.4% against the yen, 0.3% versus the Swissie and Australian dollar, 0.2% against the kiwi and 0.1% relative to the euro.  The loonie is unchanged, and the the yuan and sterling picked up 0.1% against the greenback.

Share prices rose 1.8% in China as 5-year lows reported in CPI and PPI inflation kindled speculation that the People’s Bank of China will be easing soon.  In other Pacific Basin bourses, stocks lost 0.6% in South Korea, 0.5% in Indonesia and 0.3% in Japan, Taiwan and Australia, but equities rose 0.5% in India and 0.3% in New Zealand.  The tone improved in Europe, with gains so far of 1.8% in Greece, 0.7% in Italy, 0.4% in France and 0.2% in Germany, offset with losses of 0.5% in the U.K. and 0.4% in Switzerland.

West Texas Intermediate oil sank 1.7% to $51.94 per barrel, and Comex gold is 0.3% lower at $1,237.50 per ounce.

Ten-year sovereign debt yields have risen six basis points in Greece, 4 bps in Japan, and one basis point in Germany but dipped a basis point in Britain.

Chinese consumer price inflation nearly halved to 0.8% in January, a 5-year low, despite a 0.3% month-on-month increase.  Producer prices posted an on-year decline of 4.3% versus drops of 3.3% in December, 2.7% in November, 2.2% in October, 1.8% in September and 1.2% in August.

Swiss consumer prices fell 0.4% on month and 0.5% between January 2014 and January 2015, which was the largest 12-month decline since April 2013.

Norwegian consumer prices fell 2.0% in the year to January, but that drop was eclipsed by the slump in producer prices of 4.5% from December and 12.4% from a year earlier.  Danish consumer prices dropped 0.5% on month in January and swung below zero to a 12-month dip of 0.1%. 

Australian home prices inflation slowed to a six-quarter low of 6.8% in the fourth quarter of 2014 from 9.0% in 3Q.  Reserve Bank of Australia officials in their recent quarterly Monetary Statement adopted a less worried attitude about the property market.

British industrial production slid 0.2% in December, cutting the on-year advance to 0.5% from 1.1% in November.  Production rose 0.1% between 3Q and 4Q and by just 0.8% between the final quarters of 2013 and 2014. 

France produced an upside surprise, announcing that its industrial production jumped 1.5% in December, although the 4Q-over-3Q was still negative 0.4%.  December output was 0.1% below a year earlier.

In Italy, industrial production rose 0.4% in December, most since June, but slid 0.2% from a year earlier.  Output in calendar 2014 was 0.8% less than in 2013.

South African factory output went up 2.3% on month in December and swung to an on-year rise of 1.1%.

Finnish industrial output edged 0.1% lower in December and fell by 0.9% on year.

Malaysian industrial production increased 2.0% in December and accelerated to a bigger 12-month 7.4% rate of increase from 4.8% in November.

In other news, Japan’s tertiary index of service sector activity slid 0.3% in the final month of 2014.  Service sector output rose 0.6% in 4Q but was still 1.2% lower than a year earlier.  Japan experienced a recession in the wake of last Aprils consumption tax hike.  In spite of augmented quantitative monetary stimulus since November, M2 money growth slowed to 3.4% in January from 3.6% in December.  3.4% matched the pace in 4Q and 2014 as a whole.

Same-store sales in Britain were merely 0.2% higher than a year earlier in January versus an on-year drop of 0.4% in December.

The National Australia Bank’s index of business confidence ticked up to a 3-month high of +3 in January, but business conditions remained unchanged at +2.

South African unemployment of 24.3% last quarter after 25.4% in 3Q14 was lower than street expectations.

Swiss unemployment remained low at 3.1% seasonally adjusted in January, same as in December.

Aside from the usual Tuesday release of chain store sales, monthly U.S. releases today encompass the NFIB index of small business confidence, the IBD/TIPP optimism index, and the Labor Department’s JOLTS index of job hires and separations.

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

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