Dour Data but Stocks Up

May 10, 2016

The dollar rose overnight by 0.6% against the yen and kiwi, 0.3% versus the Swiss franc, 0.2% relative to the loonie and 0.1% against the euro.  The dollar is down 0.3% against the Australian dollar and 0.2% relative to sterling.  The yuan is unchanged.

Share prices in the Pacific Rim advanced 2.2% in Japan, 0.8% in South Korea, 0.4% in Australia, 0.3% in India, Indonesia, Taiwan and Hong Kong and 0.2% in New Zealand.  The Shanghai Composite index is flat, however.  Equities in Europe have thus far advanced 3.6% in Greece, 1.7% in Italy, 0.4% in Spain, 0.6% in France and Germany and 0.5% in Great Britain.

The ten-year German bund edged up a basis point to 0.13%, while its British and Japanese counterparts are unchanged.

Following a sharp drop on Monday, West Texas Intermediate crude oil has recovered 0.8% to $43.78 per barrel today.  Comex gold is unchanged at $1,267.10 per troy ounce.

Several economies reported disappointing industrial production for March.  Output in Germany dropped 2.5% on month, slashing the 12-month increase to 0.3% from 2.0%.  But production in 1Q surpassed the 4Q15 level by an encouraging 1.8%, nonetheless.

French industrial production slid 0.3% in March because of a 0.9% drop in factory output.  Industrial production sank 0.6% between 4Q15 and 1Q16.  The Bank of France’s latest business sentiment estimation failed to reflect further improvement in April.  Measures for manufacturing, services and construction all remained unchanged from readings in March.  The central bank projects slower second-quarter GDP growth of 0.3%. 

Italian industrial production held unchanged in March after dropping 0.7% in February but posted a 0.7% 1Q over 4Q15 advance.

Dutch factory output slumped 2.4% in March, while Finnish and Norwegian industrial production that month dropped 1.7% and 1.3%, respectively.

Greek production posted a 4.0% on-year decline in March after dropping 2.5% in February.

The German current account surplus spiked upward to EUR 30.4 billion in March from EUR 21.1 billion in February as merchandise trade exports climbed 1.9% while imports fell 2.3% on month.  The first-quarter surplus of EUR 65.7 billion was 13% wider than a year earlier due to a larger 4.3% drop in imports versus a 0.5% fall in exports.

Great Britain recorded another large trade deficit in March.  For goods only, such equaled GBP 11.2 billion after GBP 11.4 billion in February.  The goods and services deficit in the first quarter was GBP 13.3 billion compared to GBP 10.8 billion a year earlier.

British same-store sales were 0.9% smaller in April than a year earlier.  March had seen a 0.7% on-year decline.

Turkey’s current account deficit unexpectedly nearly doubled to $3.677 billion in March from $1.969 billion in February.

Swiss seasonally adjusted unemployment edged up 0.1 percentage point to 3.5% in April.

Chinese CPI inflation held steady at 2.3% last month, and PPI deflation shrunk further to 3.4% from on-year declines of 4.3% in March, 4.9% in February, 5.3% in January and 5.9% in 4Q15.

Chinese foreign direct investment grew 6.0% in the year to April, down from a 7.8% 12-month increase in March.

In the year to April, Norwegian consumer prices increased 3.2%, but its producer prices sank 14.3%.  Hungarian consumer prices edged up just 0.2%, while Greek consumer prices were 1.3% lower.  Danish consumer prices were unchanged from their April 2015 level, while the Czech CPI went up 0.6%.  Cypriot consumer prices fell 2.1% on year.

The NFIB measure of U.S. small business sentiment improved to a 3-month high of 93.6 last month versus 92.6 in March and 92.9 in February but remained below last October’s recent high of 96.1.  The Labor Department monthly JOLTS index of job hirings and separations gets released today as well.  N.Y. Fed President Dudley in overnight remarks defended the monetary policy status quo.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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