Little Dollar Movement but Fairly Interesting Data

February 13, 2015

The dollar is unchanged against the yen, yuan and sterling, up 0.2% against the euro and 0.1% versus the loonie, and down 0.2% relative to the Swiss franc, kiwi and Australian dollar.

European fourth-quarter GDP figures and Chinese money and credit growth were released.

Markets are encouraged about a Ukraine ceasefire.  Sides in the Greek talks remain pretty far apart.

Following yesterday’s better U.S. stock market performance, equities mostly rose overnight in Asia and Europe.  In the Pacific Rim, share prices rose 2.3% in Australia (see comment on Stevens’ testimony), 1.0% in India, 1.1% in Hong Kong, 0.8% in China and South Korea, 0.7% in New Zealand, 0.6% in Indonesia and 0.4% in Taiwan.  Japan’s Nikkei lost 0.4%, however.  But the bid tone persists in Europe, with gains so far of 1.7% in Spain, 1.0% in Italy, 0.6% in France and 0.5% in Germany and Britain.

Eurozone bond yields do not reflect contagion from Greece’s problems.  While 10-year Greek sovereign debt yields jumped another ten basis points, those in Spain and Italy are 3 bps lower.  The French yield is steady, and those of Germany and the U.K. firmed just one and two basis points.

West Texas Intermediate oil prices climbed 1.2% to $51.81 per barrel.  Comex gold rose 0.3% to $1,224.30 per troy ounce.

Eurozone GDP results in 4Q were mixed.  Germany (up 0.7% on quarter and 2.5% on year) easily surpassed expectations.  Dutch GDP (0.5% q/q, 1.0% y/y) also beat forecasts.  So did Portugal (0.5% q/q, 0.7% y/y) and Italy (0.0% q/q, -0.3% y/y).  It turns out that the eurozone as a whole recorded no negative quarters in 2014, unlike the United States or Japan, and GDP for the year as a whole climbed 0.9%.  4Q-over-3Q Ezone GDP growth was +0.3%.  But Greek GDP swung back into the red last quarter, with a dip in GDP of 0.2%.  Cypriot GDP declined every quarter of the year and by 1.9% between 4Q13 and 4Q14.  Finnish GDP fell by 0.3% on quarter and 0.1% on year, and Belgian GDP edged up just 0.1% in 4Q. 

Credit growth in China strengthened in January, while money stock expansion slowed sharply.  New yuan bank loans of CNY 1.47 trillion versus 697 billion yuan in December constituted a 5-1/2 year high, while M2 money growth fell to a 19-year low of 10.8% from 12.2% in December and 13.4% back in July.

The Conference Board reported increases of 0.9% and 0.6% last month in China’s leading and coincident indices of economic indicators.

Reserve Bank of Australia Governor Steven said Australia’s very weak January labor statistics would not necessarily inform future policy, stressing the importance of looking at the trend over several months rather than a single observation.  He was delivering biannual testimony to parliament.

Despite higher inflation last month than expected, the Central Bank of Chile left its policy interest rate at 3.0%, its level since a 25-basis point cut in September.

Likewise, the Central Reserve Bank of Peru kept is policy interest rate at 3.5% but continued to cut its reserve requirement on local currency deposits.  Such now becomes 8.5%, down from 9.0%.

Stock and bond transactions last week in Japan generated a net 914 billion yen capital outflow, 21.7% lower than in the prior week.

British construction output rose substantially less in December than forecast, posting a gain of 0.4% from November and 5.5% from end-2013.

German wholesale prices fell further in January, dropping 0.4% on month and 2.6% on year.

Swiss producer/import prices fell by 0.6% in January, more than it had in December, leading to a bigger 2.7% on-year decline.

Augmented by the collapse of oil prices, Greek import prices tumbled 4.9% on month in December and by 12.3% from December 2013.

Among some east European economies, real GDP in 4Q rose 0.6% in Poland (3.1% versus a year earlier), 0.9% in Hungary (3.4% y/y), 0.5% in Romainia (2.5% y/y), and 0.2% in the Czech Republic (1.3% y/y).

Spanish consumer prices dropped 1.6% on month and 1.3% on year in January according to a revised estimate.  Romanian consumer prices declined 0.7% on year in January.

Retail sales in Singapore slumped 2.0% in December, cutting the 12-month advance by 60% to 2.6%.  Food prices in New Zealand rose 1.3% on month in January, most in seven months.

Sunday marks the mid-point of the first quarter and represents the end of the first eighth of 2015.

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

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