Monday Monday, Can’t Trust That Day

September 14, 2015

Overnight changes in the U.S. dollar have been comparatively mild.  It’s ticked 0.1% higher against the euro and Swissie, unchanged relative to sterling, and down versus the yen, yuan, Aussie, Canadian and New Zealand dollars.

Share prices fell 2% in China, 1.6% in Japan and 0.5% in South Korea but rose 1.0% in India, 0.5% in Australia and shows gains of 0.3% in Germany, France and Spain.

The ten-year Japanese JGB yield firmed two basis points, and the 10-year British gilt and German bund yields are a basis point higher.

West Texas Intermediate crude oil fell 0.3% to $44.52 per barrel.  Comex gold edged 0.1% lower to $1,106.93 per ounce.

Today’s data deviations from forecast have been mostly on the strong side.

On-year growth in Chinese retail sales accelerated to a 6-month high of 10.8% in August from 10.5% in July.  Likewise, industrial production increased 6.1% on year after gains of 6.0% in July and 6.8% in June.  But fixed asset investment increased 10.9% in January-August, down from 11.2% in January-July, 11.4% in the first half of 2015, and 15.7% in 2014.

Eurozone industrial production increased 0.6% on month in July, the best result in five months, which lifted the 12-month increase to 1.9%.  Production gains were paced by Ireland’s 7.2% increase.  Output rose 0.6% in Spain, 1.1% in Italy, and 0.5% in Germany but fell 0.8% in France.

Ireland’s construction purchasing managers index printed at at a 5-month low of 56.5 in August, down from 59.1 in July and 65.7 in June.  Ireland recorded a EUR 3.62 billion trade surplus in July, somewhat smaller than surpluses of EUR 4.1 billion in June and EUR 3.8 billion in May.

New Zealand’s service-sector purchasing managers index improved 1.6 points to a 2-month high of 58.2.  PMI scores above 50 denote expanding activity, and the higher the number, the faster the pace of growth.

Swiss retail sales volume fell 0.6% in July, but the 0.7% rise in sales excluding fuel was the best gain so far this year.

A 6.8% 12-month decline in the Swiss PPI/import price index was the greatest on-year drop since April 1950, providing yet another reminder of prevailing disinflation around the world.  Italian consumer prices rose 0.2% in the year to August, same result as in July.  Greek import prices slumped 11.5% in the year to July.  Indian wholesale prices fell 4.95% in the year to August, more than forecast and more than the 4.05% on-year decrease in July.

Japan’s tertiary index, a gauge of service-sector activity, increased 0.2% in July following a 0.3% rise in June and a 0.2% dip in the second quarter.  The tertiary index was 1.9% greater than a year earlier.

Japanese industrial production in July was revised from a 0.6% drop reported initially to a slide of 0.8%, with no change versus July 2014.  Capacity and capacity usage dipped by 0.1% and 0.2%, respectively, compared to levels in June.

Hungarian industrial production dropped 0.7% in July, trimming the 12-month rate of increase to 3.4%, a nine-month low.  Hong Kong industrial production in the second quarter was 1.3% lower than a year earlier.

Over the weekend for similar reasons, both The Economist and Financial Times ran editorials recommending that the FOMC not hike the federal funds rate at its upcoming meeting later this week.  The decision is due Thursday.

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

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