Mixed Chinese Data on a Holiday-Dampened Wednesday

November 11, 2015

The Armistice ending the First World War was reached 97 years ago today.  Markets in the U.S. (Veterans Day), France (Armistice Day) and Canada (Remembrance Day) are shut.

China reported October industrial production, retail sales, fixed asset investment, and net foreign direct investment statistics.

  • A 5.6% on-year rise in industrial production was the smallest gain in seven months and less than forecast.  Output in the first ten months of 2015 was 6.1% above a year earlier compared to a 7.9% 2014-over-2013 full-year advance.
  • An 11.0% on-year increase in retail sales exceeded September’s 10.9% outcome and was the best result since 11.9% last January-February.
  • Fixed asset investment grew by an as-expected 10.2% in the first ten months of this year.  That’s down from 10.3% in the first nine months and 15.7% in full 2014.
  • Foreign direct investment climbed 8.6% on year, matching the average on-year increase in the third quarter.

The dollar is unchanged from Tuesday’s closing against the yen and loonie.  The U.S. currency has lost 0.4% against sterling and 0.3% each versus the kiwi and Aussie dollar, but it has risen 0.1% relative to the euro, Swissie and yuan.

Share prices fell 1.5% in India and 1.4% in Taiwan.  Smaller drops occurred in Singapore of 0.5% and Hong Kong of 0.4%, along with upticks of 0.3% in China, 0.5% in Australia, and 0.1% in Japan.  In European trading, the German Dax is up 1.1%, followed by the Madrid Ibex (0.8%).  Swiss and Italian markets have risen 0.7% and 0.5%, but the British Ftse is just 0.1% firmer.

West Texas Intermediate crude oil declined 1.1% to $43.74 per barrel.  Comex gold softened 0.2% to $1,088.06 per ounce.

Ten-year sovereign debt yields in Germany and the U.K. are unchanged, while the Japanese JGB has slipped a basis point.

Japanese machine tool orders recorded a third straight on-year decline, this time of 23.1% in October after slides of 19.1% in September and 16.5% in August.  In the previous year to October 2014, machine tool orders had advanced 30.8%.

Japanese on-year M2 money growth slowed to 3.6% in October from 4.0% in 3Q and 3.9% in 2Q.  Other measures of money and broad liquidity also decelerated.

South Korean unemployment unexpectedly dipped 0.1 percentage point to 3.4% in October.

Australian consumer confidence according to Westpac’s index climbed another 3.9% in November on top of October’s 4.2% increase and reached a six-month peak.

The latest batch of British labor statistics was mixed in tone.  The claimant count of unemployed workers rose slightly more than expected, but the 5.3% jobless rate on an ILO-basis was the lowest since March-May 2008.  Total wage inflation held steady at 3.0% in July-September instead of rising as predicted, and regular pay inflation slowed to 2.5% from 2.8% in June-August.

German wholesale prices dropped 0.4% on month in October, twice as much as forecast, and posted a 1.6% on-year decrease.  The WPI fell 0.7% in the prior twelve months to October 2014.  Fuels and mineral oil products dropped 2.0% on month and plunged 17.8% on year in the latest reported month.

In the year to October, harmonized consumer prices rose 0.6% in Portugal but fell 1.4% in Romania.

Swedish unemployment ticked 0.1 percentage point higher to 4.14% last month.

Reserve Bank of New Zealand Governor Wheeler called prospects for a rate increase very tiny.

Chicago Federal Reserve President Evans said it’s by no means assured that inflation will get back to the 2.0% target given that such as been 1.5% or lower for the past six years.

Candidates for the Republican nomination for president held a fourth debate last night.  Jeb Bush was more spirited than in prior debates.  Several endorsed getting tougher with large banks.

Being a holiday, the U.S. data calendar is pretty empty.  Stocks will trade, but the Treasury market is closed.

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

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