Chinese Data and a Slew of Japanese Statistical Releases

June 8, 2016

Commodities, commodity-sensitive currencies like the kiwi and rand and other emerging market currencies like the won experienced another strong session.  West Texas Intermediate crude oil is trading marginally above $51 per barrel versus a February low of $26.05.  Gold advanced 0.9% to $1,258.7 per ounce, and copper jumped over 2%.

Eurozone sovereign debt yields are under some downward pressure as the ECB commenced its program of corporate investment-grade bond purchases.  The Japanese 10-year JGB and British 10-year gilts are steady.

Share prices in the Pacific Rim advanced 0.9% in Japan, 0.8% in South Korea, 0.5% in Singapore, 0.4% in Taiwan and Indonesia but held flat in Australia.  European equities lost ground on profit-taking after their recent run up. Losses so far today amount to 0.7% in Greece, 0.6% in Switzerland, 0.5% in Spain, 0.4% in Germany, 0.3% in France, and 0.2% in Italy.  The British Ftse has edged 0.1% higher.

The dollar declined overnight by 0.5% against the loonie and kiwi, 0.4% relative to the yen and Swissie, 0.3% versus the euro, 0.2% vis-a-vis sterling and 0.1% against the yen and Aussie dollar.

The National Bank of Poland kept its key interest rate unchanged at 1.5%, its level since a 50-basis point reduction in March 2015.

China’s $49.98 billion trade surplus in May was smaller than forecast because of an on-year dip in imports of only 0.4% following a 10.9% plunge recorded in the year to April.  Exports fell 4.1% on year.  It was the first time in three months that exports fell more sharply than imports and the smallest import decline in well over a year.

Japanese real GDP growth in 1Q was revised upward to 1.9% seasonally adjusted at an annual rate (saar) from the prior quarter compared to 1.7% reported earlier.  Personal consumption, up 2.6% saar accounted for three-fourths of all GDP growth.  Residential spending, inventories, and non-residential investment exerted a drag of 0.9 percentage points (ppts) combined on GDP growth, offset by positive contributions to GDP of 0.7 ppts from net foreign demand and 0.5 ppts from public expenditures.  The GDP price deflator rose 0.9% on year.  Real and nominal GDP were 0.1% and 0.9% greater than in the first quarter of 2015.

Japan’s current account surplus of JPY 1.879 trillion in April was well above its year-earlier level of JPY 1.326 tillion, but the seasonally adjusted current account surplus of JPY 1.625 trillion was down from March’s surplus of JPY 1.894 trillion.

Japanese customs trade in May 1-20 generated a JPY 575 billion deficit versus a JPY 745 billion deficit a year before.

Stock and bond transactions in Japan during May generated a 1.284 trillion yen net capital outflow.

Japan had 7.3% fewer bankruptcies last month than in May 2015, similar to the 7.1% on-year drop in April but much less than March’s drop of 13.2%.

Disappointingly low on-year growth in Japanese bank lending of 2.2% in April and May was the same as in the first quarter.

Japan’s economy watchers index fell another 0.5 points to 43.0 in May, lowest since November 2014, but the outlook economy watchers index rose to a 3-month high of 47.3.

Swiss consumer prices fell 0.4% on year in May, same as the negative pace in April.

French business sentiment in manufacturing unexpectedly dropped two points to 99 in May, but the services sentiment index according to the Bank of France rose two points to a reading of 98.  Nonetheless, monetary officials reduced their forecast for second-quarter French GDP growth to just 0.2% from 0.3% assumed earlier.

British industrial production data for April revealed an unexpectedly sharp 2.0% rebound and a 12-month 1.6% rate of increase.  Factory output growth of 2.3% on month paced the improvement.

South African real GDP contracted 1.2% on quarter at an annualized rate in 1Q16 and was also 0.2% lower than in the first quarter of 2015.

Turkish industrial production sank 1.1% in April and was just 0.7% higher than a year earlier.

Manufacturing activity in New Zealand dropped 1.2% last quarter, a worse-than-forecast result.

Australian home loans recovered 1.7% on month in April after dropping 0.7% in March.

Brazilian consumer price inflation stayed at 9.3% in May.

Canadian housing starts dipped 1.5% to 188.6K last month.  Permits slid 0.3%.

U.S. mortgage applications rose 9.3% last week, more than reversing a 4.1% drop in the previous week.

The Central Bank of Brazil is expected to leave its Selic interest rate unchanged after today’s monetary policy review.

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



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