Quiet Start to Holiday-Riddled Week

December 21, 2015

The dollar is unchanged against the euro, yen, loonie and yuan.  The U.S. currency gained 0.2% relative to the Swiss franc and 0.1% versus the Aussie dollar and sterling but edged down 0.1% vis-a-vis the kiwi.

Splintered Spanish election results have depressed the Spanish IBEX by 2.5%, but other stock markets are mostly higher after a very difficult week before.  Share prices rose 1.8% in China, 2.4% in Australia, 0.9% in Taiwan and India, but dropped 0.4% in Japan.  Equities are so far up 0.9% in the U.K., 0.7% in Germany, 0.5% in Italy and 0.4% in France.  Greece’s market has fallen 0.8%.

The previously ruling center-right People’s Party lost 63 parliamentary seats in Spain, reflecting corruption instances and dissatisfaction with austerity.  The main opposition Socialists dropped 20 seats, reflecting lost confidence in the main parties.  The anti-austerity new Podermos party took 69 seats, and the liberals got 40 seats.  Spain will have a minority government and be hampered by issues on non-governability.

The 10-year British gilt yield is unchanged.  It’s Japanese counterpart fell two basis points to 0.26%, while the 10-year German bund is two basis points firmer at 0.56%.

West Texas Intermediate oil dropped to $34.12 per barrel, a loss of 0.6%.  Comex gold is 0.4% firmer at $1,070.45 per ounce.

Japan’s all-industry index bounced 1.0% higher in October following a dip of 0.2% in September and no change in August.  The index was 0.9% higher than a year earlier and 0.8% above the third-quarter mean.  Japanese supermarket and department store sales recorded respective on-year declines in November of 1.0% and 2.7% following increases posted in the year to October.

German producer prices unexpectedly fell last month.  The 0.2% drop after declines of 0.4% in each of the previous two months resulted in a 12-month decrease of 2.5%, most in 69 months.  Energy fell 7.1% on year, and other producer prices declined collectively by 0.7% over the past year.  Irish producer prices, in contrast, climbed 4.4% in the year to November.

Consumer confidence rose 4.4% this quarter in New Zealand but was 4.5% lower in Turkey in December than November. Danish consumer sentiment advanced 0.5 to a 6.1 reading in December, best since August. 

Sweden’s economic tendency index improved 3.4 points to 110.1 in December.  Manufacturing sentiment rose 6.2 points, while consumer confidence climbed 2.3 points.

Icelandic wage cost inflation accelerated from 7.9% in October to 8.7% last month.

Current account data were reported by Switzerland, Hong Kong and Greece.  The CHF 22.97 billion Swiss surplus in 3Q was 5.9% greater than in the prior quarter.  Hong Kong’s surplus widened sharply to HKD 48.4 billion last quarter, but the Greek surplus in October of EUR 314 million only about a third the size of September’s surplus.

The summary index of the CBI monthly survey of British distributive services rose a dozen points in December to 19, but that merely returned to October’s level, which was a six-month low at the time.

The Chicago Fed National Activity Index deteriorated unexpectedly in November, plumbing to an 8-month low of -0.30 from a revised -0.17 reading in October.

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

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