Wednesday Rundown

May 13, 2015

The dollar fell 1.4% against the Australian and New Zealand dollars on Wednesday.  It also dropped by 1.2% versus the euro and Swiss franc, 0.5% relative to the yen, 0.4% against sterling and 0.3% versus 0.1% against the yuan.

Share prices were unchanged in the United States, down 1.1% in Germany, and 0.7% versus the yen.

Sovereign debt yields plunged 39 basis points in Greece but rose by 5 bps in Germany and 4 bps in Britain and the United States.

Comex gold advanced 1.8% but WTI crude oil declined 1.0%.

Initial estimates of first-quarter eurozone GDP growth surpassed expectations on the whole with a gain of 0.4% on quarter and 1.0% on year.  Growth accelerated to 0.6% in France, a 2-year high, from zero; to 0.3% in Italy from zero in 4Q14, and to 0.9% in Spain from 0.7%.  But the expansion rate for Germany slowed to 0.3% from 0.7%.  Dutch growth of 0.4% was half as fast as in 4Q.  Greek GDP contracted for a second straight quarter, signaling a relapse into deficit.

There was bad news from China in the form of slower growth in money, retail sales and fixed asset investment.

U.S. retail sales stagnated in April and undershot expectations.  The result cannot be blamed on weather and was accompanied by disinflationary evidence from import prices, which dropped 0.3% in April, posting a 10.7% on-year plunge.

British GDP growth slowed to 0.3% last quarter, and jobless claims in the U.K. fell only 12.6K in April, least in 25 months.  British wage growth picked up, however, in March, and ILO-basis unemployment of 5.5% in February-April was the lowest in almost 7 years.

Japanese customs trade generated a 271 billion yen deficit in the first 20 days of April, 49.7% smaller than a year earlier.

Stock and bond transactions in Japan generated a 5.23 trillion yen inflow last month.

Japan’s current account surplus in March printed at a greater-than-expected 2.795 trillion yen surplus on an unadjusted basis and at 2.066 trillion yen when seasonally adjusted, which was nearly 3 times greater than in February.  The fiscal 2014 current account surplus of 7.8 trillion yen followed a JPY 1.47 trillion surplus in the prior fiscal year.

Japan’s economy watchers index rose to 53.6 in April from 52.2 in March.  There were 18.2% fewer bankruptcies last month than in April 2014.  Japanese bank lending grew just 2.6% on year in April, up very little from 2.5% in both 4Q14 and 1Q15.

The Bank of Iceland’s main interest rate was left unchanged at 4.5% as analysts and markets had expected.

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


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